The full text is relatively long and is split into three parts for release. This article is the second part. For details on the first part, please see: NFT 2024 Annual Report (1): Ecological Overview and Market Performance.
Chapter 3 Micro Trends
Floor price distribution
The data shows that the majority of NFTs (1,727) have a base price between 0 and 0.01Ξ, accounting for more than 35% of the total, with the number of NFTs in each range steadily decreasing as the price range increases.
NFTs priced between 0.01 and 0.1 Ξ accounted for an additional 23% (1,274), while the mid-price range between 0.1 and 1.0Ξ accounted for another 14% (302).
Only a tiny fraction of NFTs are priced above 1.0 Ξ, with 53 of them (just over 1%) in the 1.0 to 2.0 Ξ range.
The distribution decreases further as the price range increases, with only 33 NFTs (0.7%) having a base price from 2.0 to 3.0 Ξ, 18 (0.4%) ranging from 3.0 to 4.0 Ξ, and only 7 (0.1%) having a price range More than 6.0 Ξ.
At the top, only 3 NFTs (0.06%) have floor prices above 100.0 Ξ, and overall, the distribution is skewed towards low-priced NFTs (below 0.1 Ξ), which make up over 58% of the sample.
In comparison, base prices in the mid-range price range are relatively scarce, while high-priced 100.0+ Ξ pieces are very rare.
Digging further into the NFT floor price distribution data reveals several noteworthy trends:
Distribution highly skewed toward the high end - low-priced NFTs (less than 0.1 Ξ) dominate the market, accounting for 58% of the sample, with higher price tiers declining exponentially, with only 1% of NFTs priced above 1 Ξ, which Demonstrates that there are few outstanding works of high value on the market, compared with the abundance of low-value works;
The scarcity of mid-level products - NFTs with base prices between 0.1 Ξ and 1 Ξ account for only 14% of the data. This relative scarcity of "mid-market" priced NFTs indicates that pricing currently tends to be very low-end or very high-end;
There is almost no ultra-high-end market - only 0.06% of NFTs have a floor price above 100 Ξ, highlighting the overall lack of works that demonstrate the characteristics and value of "blue chip" crypto art, with reports indicating that the historical "blue chip" threshold starts from approximately 25 Ξ .
Overall, this distribution highlights an NFT market that favors inexpensive speculative play, while mid-tier and high-value collectibles remain scarce. As the market matures, we may see a more balanced distribution of price tiers, which Signaling increased market health and diversity.
Project release
As of January 1, 2022, the total number of high-quality NFT collections issued was 1,239, and this cumulative count has grown steadily throughout 2022, with the year-end total reaching 4,856 collections, with 3,617 new collections issued throughout the year.
March 2023 was the fastest growing month, with 1,215 new projects launched that month, a 329% increase from February’s number.
Platforms like OpenSea lower the barrier to launch new collections by providing templated minting and a one-stop marketplace. This democratizing approach empowers more creators, but also leads to the emergence of low-quality speculative projects.
The average monthly minted collections accounted for 8.4% of the annual total, with March and November seeing the highest launch rates at 9.45%, and the first quarter was particularly strong with an average of 9.15% minted from January to March. .
The first half of the year saw a gradual decline in the number of new collections launched each quarter: the average launch volume from July to September in the third quarter was 8.24%, however, the peak launch volume coincides with seasonal events (such as the winter-spring transition in the first quarter) There is a loose correlation, and overall, the 8.4% average points to a steady and consistent flow of new collections being launched every month in 2023.
Market capitalization and trading volume distribution
The data shows that collections with market caps below Ξ100 make up the largest share, with 5,662 items accounting for nearly 90% of the total NFT collections.
At the same time, mid-range collectibles with market capitalization between 100 Ξ and 10K Ξ accounted for 9.8% of the sample. There were a total of 1,070 projects in this range, and only 43 collectibles, accounting for 0.7% of the total, reached 10K Ξ and above. High market capitalization.
This distribution indicates that high-valued collectibles are more scarce. The relative scarcity of large-cap collectibles indicates that the market has not yet consolidated. There are currently few clear "category leaders," which is to be expected in an emerging market. As the industry evolves, the market is likely to focus on fewer high-value collectibles, with the mid-tier market representing a potential area of growth in the coming years.
Liquidity distribution
NFT liquidity refers to the ability to sell NFTs smoothly at a reasonable price. When liquidity is insufficient, some NFTs must reduce their prices to sell quickly.
NFT liquidity is closely tied to the market, with trading volume and trader activity used to measure liquidity trends. We can conclude that the market is most liquid in January and April, becomes less liquid in May, and reaches its lowest point in September.
How much revenue can royalties bring in?
Royalty Allocation
Judging from the royalty data for the top Ethereum NFT collections of 2023, the market is still looking to find stability in a cycle of extreme hype and decline.
Blue-chip projects like Bored Ape Yacht Clu and Mutant Ape Yacht Club performed strongly in the first half of 2023, with Bored Ape Yacht Clu generating more than $10 million in royalty revenue during its best revenue day in June.
However, summer brought cooling, with Bored Ape Yacht Clu dropping from daily revenue of $18.7 million on June 23 to just $3.5 million on July 9.
The Bored Ape Yacht Clu picked up in the fall, peaking at $9.6 million in royalties during the Otherside metaverse land sale on Nov. 4, but November's hype quickly faded, with just under $1 million in revenue in December.
For the full year, Bored Ape Yacht Clu topped the royalty revenue charts in 10 out of 12 months, with Mutant Ape Yacht Club following a similar boom-and-bust pattern.
Azuki, meanwhile, maintained higher royalty revenue throughout the year, fluctuating between $2 million and $15 million each month, indicating a more stable floor.
Moonbirds has also shown strength as an emerging blue-chip project, ranking among the top 5 projects for eight consecutive months in the second half of 2023 and generating $2 million in revenue in October.
We can see that OpenSea continues to be the dominant NFT market in terms of total royalties distributed across top collectibles. Specifically, OpenSea allocated 17,696 ETH in royalties to Bored Ape Yacht Club and 18,434 ETH to Otherside. Royalties are much higher than other markets.
In the blue-chip NFT collection space, OpenSea has maintained a leading position, while Blur has found its niche in the middle tier and emerging projects, with royalty data showing a growing number of collections in addition to the top collectibles by market capitalization and sales activity. Products are starting to come together on Blur.
As the market develops further in 2024, increased utility around gaming, the Metaverse, and Web3 applications may help stabilize the floor price and smooth out some of the volatility, attracting more mainstream users, but the data suggests that the NFT industry is moving towards more stability There is still room for improvement on the long-term growth path.
Royalty revenue to fall in 2023
Chapter 4 Global Impact
NFT search interest
We can get a glimpse of global netizens' attention to NFT from Google's search volume, and can use Google Trends to monitor the keywords "NFT", "ETH" and "BTC". From the beginning of the year to April, NFT maintained a stable performance compared with Ethereum. Consistently leading the way.
However, there is a clear shift in this trend starting in May and continuing into October, during which NFT search interest moved closer to Ethereum, indicating a similar level of public curiosity and engagement with both digital assets. .
In contrast, Bitcoin (BTC) search volumes have seen significant fluctuations throughout the year, however, a clear shift has been observed starting in October with an explosion of search interest.
This surge can be attributed to innovations like Ordinals bringing new attention and excitement to the Bitcoin space. Ordinals are a new concept that combines NFT-like elements with the Bitcoin blockchain and seems to inspire Public interest has pushed Bitcoin searches to new highs.
Ordinals became the hottest topic
Analysis of the top 10 topics and queries related to “NFT”, “ETH” and “BTC” shows some interesting phenomena. As with innovative NFT products such as Bitcoin and Solana NFT Marketplace, Ordinals are on Bitcoin and Areas such as Tensor and Solana's NFT market are increasingly attracting the attention of investors and market participants.
The NFT space is broadening its scope and diversifying on various blockchain networks in addition to Ethereum, thereby expanding its influence in the digital asset market.
Among the topics most relevant to NFT searches, we found that queries similar to those in 2022 such as "NFT meaning", "What is NFT" and "OpenSea" are still at the top. In 2023, we saw similar queries like Blur The rise of new trading platforms, but the influence of OpenSea cannot be ignored.
Looking back at 2023, ETH’s search volume was mainly focused on its upgrade. Ethereum’s Shanghai upgrade allowed stakers and validators to withdraw assets from the beacon chain, given that staked Ether tokens accounted for approximately seven-sevenths of the total supply. One, equivalent to nearly 16 million coins, this development is of great significance.
In 2023, global interest in BTC surged, and related search queries showed significant growth, especially terms related to buying BTC, such as "coinsbit buy btc", which showed the growth of consumers' willingness to invest, and other rising queries Demonstrates strong interest in market trends and specific platforms.
Data shows that global interest and curiosity in digital currencies continues to grow, with regions in Africa, North America, and Asia showing considerable interest and investment in cryptocurrencies, although relative to the previous year. China dropped two spots in the rankings without a significant drop in search volume, indicating continued global interest in cryptocurrencies.
Regarding NFTs, the pattern of search interest observed highlights the growing global awareness and participation in the NFT market. Interest in NFTs is prominent in major Chinese cities such as Hangzhou and Shanghai, reflecting China’s growing participation in this field and its global presence in NFTs. Across the board, cities in Asia continue to make significant contributions to search volumes, reinforcing the region as a key driver of NFT market growth.
The number of potential buyers and sellers is balanced
After entering a quiet wait-and-see period last year, the trading market this year has remained less volatile, with initially slightly higher searches for buying NFTs than for selling NFTs, indicating good market entry.
However, over time, search interest in selling NFTs occasionally exceeded search interest in buying NFTs, and the search trends for "buy NFTs" and "sell NFTs" were closely linked, indicating an active market with participants actively involved in buying and selling.
Brand overview
Luxury fashion brands like Louis Vuitton, Dolce & Gabbana, and Burberry are releasing exclusive NFT collections that combine digital and physical ownership of high-end fashion items, with a focus on providing real-world utility and exclusivity.
Large consumer brands such as Coca-Cola, Budweiser, McDonald's, Pizza Hut, and others engage fans and communities primarily through free, promotional NFT campaigns, which are smaller in scale.
Sports teams and organizations like the Chicago Bulls, Golden State Warriors, MLB, and more are launching NFT collectibles that have the appeal of iconic moments and memorabilia from games and championships.
Car brands such as Lamborghini, Citroën, Mercedes and others offer NFTs, providing digital ownership and experience of branded cars, where digital assets are merged with desirable physical products.
Media brands such as CNN, TIME, Rolling Stone, and the Associated Press are testing different news and photojournalism packages as NFTs, but ethical questions about benefiting from human suffering are also emerging.
Persistence features on offer include discounts, exclusive products, VIP events and access to Metaverse spaces, with scarcity and collectible value also among the driving factors.
In summary, premium brands are leading Web2 adoption of NFTs, leveraging digital exclusivity and real-world utility as key incentives, and mass brands are experimenting with community engagement.
NFT Adoption Trends
Take advantage of exclusivity and scarcity to set high prices;
Provide real-world utility like product visits or VIP events;
Build a loyal community of digital fans and collectors;
Digitized physical assets such as cars and fashion items;
Dynamic NFTs that evolve based on external factors such as sports performance.
Chapter 5 NFT Financing Trends
Crypto Financing Trends
Crypto funding trends for 2023 indicate a challenging year for many projects, with analysis showing that total funds raised fell by approximately 80% compared to 2022.
The data shows that 2023 shows a "smile curve" pattern, gradually declining after March and then recovering slightly in November.
Specifically, the total amount raised in March 2023 hit a monthly high of $1.37 billion, compared with a low of $370 million in August. November's total partially rebounded to $1.67 billion, but still Well below 2022 levels.
Ongoing macroeconomic uncertainty, coupled with crypto market volatility, has dampened investor appetite for risk, and high-profile failures by crypto companies in 2022 have led to more cautious assessments of projects’ viability and use cases.
However, part of November’s rally suggests some renewed optimism and a willingness to invest at discounted valuations, and good projects with strong fundamentals may be able to capitalize on market weakness to grow, with total funding raised set for crypto as macro conditions evolve in 2024 Investor sentiment and risk tolerance in the sector provide clues.
DWF Labs and Coinbase Ventures led crypto trading activity in 2023, participating in 42 transactions each.
Hashkey Capital and Polygon Ventures also rank higher on the list, completing 41 and 40 deals respectively, with the top 10 most active crypto investors in 2023 participating in more than 30 deals annually.
Polygon Ventures led gaming crypto (GameFi) deals in 2023 with 13 rounds, consistent with investor interest in the category - games and NFTs have historically attracted large amounts of capital.
For example, over the past 3 years, Animoca Brands has emerged as the most active backer, investing in 123 GameFi and 58 NFTs.
GameFi and social
GameFi and NFT funding peaked in late 2021 and early 2022, with over 50 rounds in each category in April 2022, however, trading volumes have declined since then.
On the contrary, transaction volume in the social crypto (SocialFi) space continues to be stable from 2022, with an average of 10-15 transaction rounds per month.
In terms of the size of funds raised, GameFi deals totaled $133 million in March 2023, compared to $204 million for SocialFi in the same month, however, these amounts are dwarfed by the $2.49 billion raised for GameFi alone in April 2022.
The GameFi and NFT space has weakened somewhat in 2023 as speculation cools and the market consolidates, however, the relatively steady pace of SocialFi trading means proponents remain bullish on the fundamentals of the space.
Regional funds by category
The United States leads the total number of global crypto funding transactions, followed by crypto-friendly jurisdiction Singapore, with China also witnessing significant funding activity and ranking high in total transaction volume.
Chapter 6 Top Sales
game
NFT games are launched on the blockchain using the NFT standard, which is a combination of traditional and innovative game mechanisms. Users can obtain in-game assets such as weapons, characters, etc. by owning the corresponding NFT.
Collection
Projects whose main function is to issue tokens for collections, which can become part of a system containing gamification elements or interactions between collectives or a series of interactions between collectors and players.
PFP（Profile Picture）
Algorithmically generated digital images, presented in a "profile picture" format, most of which are cartoon or pixelated character avatars, can be used by owners of NFT avatars as digital profile photos in games and applications because They can digitally represent real-world assets.
Art
This category refers to handmade and generative art collectibles that are made, sold, or generated in the form of NFTs.
original universe
Shared virtual world environments that people can access via the Internet, computers, virtual reality headsets, and even smartphones, these parallel digital universes offer users a range of unique experiences, with advanced architecture for secure and easy creation of digital assets and Digital identity.
DeFi (decentralized finance)
Software systems written on the blockchain allow buyers, sellers, lenders and borrowers to interact point-to-point without the involvement of financial intermediaries. This may be the most widely used area of smart contracts.
IP (Intellectual Property)
NFTs issued by some brands and celebrities.
social contact
NFT designed specifically for social media personalities who want to create digital collectibles of their likeness.
music
Music NFTs can vary depending on what the crypto-musician decides to include in them, including traditional playable media files, concert or music event tickets, artwork or creator attribution, collectible fragments of albums, and more.
Practicality
Utility NFTs are NFTs that carry some underlying utility function or application. This category includes a variety of projects where the NFT itself does not necessarily have gaming or artistic functions. In other use cases, utility can be the ability to grant access to its owner. Or NFT assets with specific rights, such as domain names.
Top 10 sales per category
game
PFP (avatar)
Art
land
DeFi (decentralized finance)
IP (Intellectual Property)
domain name
social contact
music
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