In June 2022, the transaction amount in the global NFT market was only US $1.04 billion, down 74% month on month From The Block

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The “middle road collapse” of global NFT transactions is still spreading. In June this year, according to the latest data from the encrypted data media the block, the global NFT market was gloomy. The transaction amount in June was only $1.04 billion, down 74% from $4 billion in May, the largest decline in global NFT transactions so far.

As of July 25, the global NFT transaction amount counted in July was only $380million, and the decline may continue.

Source: the block

This is closely related to the shock of cryptocurrency circle.

From May to June this year, cryptocurrency ushered in what insiders call the “Lehman crisis” in the currency circle. “Thunder explosion” events include: the collapse of South Korea’s stable currency terra, “the flash collapse of the currency circle Moutai” Luna, the suspension of account withdrawals by crypto lending company Celsius for bankruptcy, and the bankruptcy liquidation of crypto hedge fund Sanjian capital.

With the turmoil in the currency circle, commercial companies have become more cautious about NFT.

On July 20, my world, the world’s largest sandbox game, announced that it would update its user policy to prohibit players from integrating blockchain technology into servers and games to create game related NFT assets. The statement pointed out that NFT digital assets have digital ownership, which is inconsistent with the value of creative inclusion of the game itself, and that “speculation around NFT will divert players’ attention to hyping huge profits.”

Under the cold winter, NFT may be experiencing the biggest crisis since its birth.

The “bear market” in the currency circle and the decline of encrypted investment

Cryptocurrency continued to fall under the continuous explosion. Investment projects related to cryptocurrencies are inevitably implicated. On July 21, Tesla, a high-profile currency speculator, issued its financial report for the second quarter of this year, in which it sold bitcoin for a “blood exchange”.

According to Tesla, the company sold about 75% of bitcoin to obtain $936million in cash. The selling price of this batch of bitcoin was $28888, a discount of 9% compared with the average purchase price of $31620. Tesla CEO musk said that this is to improve the cash situation under the epidemic. Tesla is still open to increasing its holdings of bitcoin in the future, and has not sold dog coins.

Figure source: Ying Weicai

According to Yingwei’s financial data, in July, the price of bitcoin, the world’s largest cryptocurrency, was $21051, with a decrease of about 4% in seven days. As can be seen from the price trend chart, it has been falling since the end of March.

According to coinmarketcap data, from November last year to June this year, the total market value of cryptocurrency market decreased from $3trillion to $844billion, a decrease of more than 70%, and $2.16 trillion evaporated out of thin air. Among them, bitcoin, the largest cryptocurrency, fell 56.13% and Ethereum fell 98.31%.

At present, Ethereum is one of the most mainstream transaction currencies in NFT transactions, and NFT transaction related institutions are also affected.

As the largest NFT trading platform at present, Devin finzer, CEO of opensea, recently announced that due to the sharp decline in cryptocurrencies held by the company, the company will cut 20% of its staff. According to the current trading volume, this layoff action will maintain opensea’s operation for at least five years. Previously, coinbase, a cryptocurrency exchange, also announced a layoff of 18%.

In mid June, Bill Gates attacked NFT and cryptocurrency in a speech on climate change. He said he was not interested in the crypto economy because these were 100% based on the “greater fool theory”, that is, enough investors were willing to pay for these overvalued assets.

NFT shrinks and depreciates, and the star halo fades

In January this year, with the influx of emerging trading platforms such as looksrare, the global trading volume of NFT market reached US $16.6 billion, a nearly five fold increase month on month. But in the following six months, NFT trading volume continued to decline.

On the official website of opensea, the current floor price of the phantom bear series NFT held by Jay Chou is 0.44eth (ether). After its release on January 1 this year, the series reached a high price of 8eth in a short time, which was equivalent to RMB 192000 at that time. With the devaluation of Ethereum and the decline of floor price, the current NFT value of this series has fallen to 4223 yuan.

Interestingly, although it is foreseeable that Jay Chou will not sell his phantom bear, many people continue to bid for the phantom bear 10000 held by Zhou on opensea, and the current maximum bid is only 0.34eth, 22% lower than the floor price of the series. Phantom bear 9999, which once sold at a record high price with 148eth, is currently offered only 0.33eth by opensea players. The market shows that most buyers are unwilling to buy the “phantom bear” series NFT above the average market price, and a considerable number of high price phantom bears have no “takeover”.

The reporter of it times found that the transaction prices of the series of transactions completed in the past week were around 0.5eth.

“The decline of cryptocurrency makes people more cautious about NFT investment, and the market is also reflecting on the real value of NFT. Last year, the halo effect brought by various stars and institutions disappeared, and the space for speculation is narrowing.” An investor who pays attention to NFT told the IT times.

Another obvious example is the “world’s first twitter” NFT launched by twitter founder Jack Dorsey in March last year. At the beginning of the sale, the auction price soared from $5 to $2.9 million. In April this year, when the buyer came up with the NFT again for auction, only seven quotations were received in the first round, with the highest price of $277.

At present, this NFT is also put on opensea for sale. The page shows that the seller hopes to have a transaction price of 15eth, equivalent to about $21547, but there is still no bid. “The impact of the cryptocurrency crash on the NFT industry has certain commonalities. From the macro environment, the cryptocurrency crash has disturbed NFT market confidence. From the perspective of users, due to the current immature NFT market, there is a lot of coincidence between its user groups and cryptocurrency players. When they see the deterioration of the hype environment, these users will accelerate their escape.” Suxiaorui, senior analyst of Analysys financial industry, said.

According to the data of encryption agency dapprad, the top two IP “encryption punk” and “boring ape” in the NFT market for a long time did not escape the decline, and the trading volume fell by 12.52% and 23.82% respectively.

Web3.0 domain name: hype or future business card?

The reporter of it times noticed that in the winter of encryption, ENS (Ethereum domain name service), which also trades on the NFT trading platform, is “outstanding” and is pursued by many famous people.

Cryptogram data shows that, contrary to the trend of most NFTs, the overall transaction amount of ENS has continued to rise in recent months. At present, the transaction amount of ENS ranks seventh in the NFT market, but the growth rate in the past month ranks first among the top 10, with 192.89%.

Previously, on July 4, the ENS domain name “000.eth” hit the second highest transaction record of ENS domain name with a transaction price of 300eth, causing controversy. According to media statistics, on July 3, the transaction amount of ENS domain name exceeded US $3.26 million, ranking first in the NFT market.

Ens, whose full name is Ethereum name service, is a decentralized domain name service provider of Ethereum. In today’s Internet, we are used to using URLs ending in “.Com”.Org “. In fact, these URLs are converted by DNS, the domain name service provider, which converts the original decimal IP address into understandable numbers and letters. Similarly, the function of ENS is to convert the 42 bit Ethereum address into a website ending in “.Eth”, which solves the readability problem of the address on the complex chain. Personal blockchain addresses can be bound to blockchain wallets, social accounts, NFT, etc. as business cards in the “Web3.0” era, they may be more practical than NFT.

The reporter of the IT times noticed that caiwensheng, who made his fortune by buying and selling domain names in the Web2.0 era, and Zhu Xiaohu, the investor, all have their own ENS domain names: “longling.eth” and “allenzhu.eth”. Many commercial companies have also changed their twitter names to ens domain names, such as Puma “puma.eth”, Budweiser beer “beer.eth” and Samsung “samsung.eth”.

It is worth noting that “don’t put eggs in one basket”. Similarly, Web3.0 domain names do not have to be established on the Ethernet, such as Solana’s “.Sol” domain name, CELO’s “.Nom” domain name, etc. At present, many giants of ENS domain name have entered the “shopping”, and the 3-digit and 4-digit digital domain names have been highly sought after, and there is no lack of hype risk under the halo effect.

“As a global open network, the resource access of the traditional Internet depends on the centrally managed domain name system (DNS). DNS, as the most fundamental infrastructure of the Internet, although it has been systematically expanded and optimized from IPv4 to IPv6, it may still be controlled.” Yao Qian, director of the science and technology regulatory bureau of the CSRC, once pointed out with ENS as an example that Web3.0, as a new decentralized value Internet, needs a new decentralized DNS root domain name governance system.

On July 13, Shanghai issued the “14th five year plan” for the development of Shanghai’s digital economy, which clearly pointed out that Shanghai will support leading enterprises to explore the construction of NFT trading platforms, and promote the digitization of NFT and other assets, the global circulation of digital IP, and the protection of digital rights, and other related formats to take the lead in Shanghai. One day, NFT transactions will be launched in China, and Web3.0 domain names may also become a necessary part.

The block: research shows that the United States and Japan have become the main channel for global cryptocurrency transactions. Chain: NFT sales fell to a 12-month low in June 2022. NFT sales exceeded $2billion in Q1 2021, with a 20 fold increase month on month. The survey found that most game developers are not interested in NFT. In the first half of 2021, the total sales of NFT digital art reached $2.5 billion. In 2021, the 12 technology hot words metauniverse Web 3 and NFT on the list GDC: nearly 30% of game studios are interested in NFT and cryptocurrency. Chainalysis: in 2021, the global NFT market size exceeded $26.9 billion. Reddit co-founder: NFT games will occupy 90% of the market in five years. Dappradar: the total sales of NFT in 2021 is about $25billion. NFT house: the survey shows that 30% of netizens know NFT, but only 2.8% of the owners. Overview of NFT industry in 2021: the digital right value of culture and social networking (with download) Google: only 16% of mobile game players want to play the game “Forbes” developed on the basis of NFT: musk paid 71billion yuan in 2020, becoming the highest paid CEO in the world. Goldman Sachs Group: the holdings of encrypted assets account for only 0.3% of the net assets of U.S. residents. The shrinkage of cryptocurrency has little impact on the U.S. economy

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