The Multichain NFT Market

The NFT market officially surpassed $10 billion in secondary sales combined across a variety of categories including gaming, PFPs (profile pics), sports, and collectibles.

The burgeoning NFT multichain future is rapidly approaching. Three Layer-1 blockchains possess secondary volumes of over $100 million and Ethereum leads all blockchains and Layer-2s with over $6 billion in secondary NFT sales. The next closest is Axie Infinity’s Ronin sidechain with over $2 billion in sales followed by Flow with over $700 million in volume.

Secondary sales – sales between individuals (not from platform to individual) – are an excellent representation of the health of the NFT market since it displays the appetite for demand. The total NFT sales number across all blockchains (e.g. including Tezos, Solana) and including primary sales, fractional sales, and platforms like OpenSea likely falls in the $20-30 billion range, potentially higher. 

While the NFT market has fallen since its August high, volumes continue to remain strong as users (and speculators) flock to new NFT projects.

To date, the NFT market has experienced several local peaks. NFT volumes first started to rise at the end of December with the growth of crypto art. However, February marked the first local peak in non-platform issued art (i.e. SuperRare, Nifty Gateway) predominantly led by Flow’s flagship collection, NBA Top Shot. The end of April/early May marked another local peak, partially facilitated by the unprecedented growth of Bored Ape Yacht Club and various other NFT avatar/PFP (profile pic) projects. 

While each of these local peaks seemed toppy, August NFT volumes crushed all previous expectations as Axie Infinity trading ballooned with the help of Axie’s Ronin sidechain. Additionally, the launch of projects like Loot and the explosive growth of Art Blocks curated projects helped propel the NFT secondary sales market. 

The history of NFTs is largely a tale of Ethereum, however, blockchains like Flow and Axie’s Ronin have started to obtain stronger shares of the NFT market. Ethereum’s NFT market dominance reached an all-time low in Feb 2021 when Flow’s NBA Top Shot encapsulated much of the market. Perhaps Dapper Lab’s new partnership with the NFL to launch a similar football collectibles project will stimulate a resurgence on Flow NFT dominance.

Polygon experienced initial NFT growth mostly resulting from horse racing game, Zed Run. Even amidst high fees, Ethereum has regained its NFT dominance. While other blockchains like Solana and Flow will certainly continue to build robust NFT ecosystems, Ethereum Layer-2s might help secure greater NFT growth for Ethereum.

While much of the NFT market is inherently speculative, the growth of all assets requires speculation and the public nature of crypto makes capital readily available for individuals, creators, and developers who are willing to build unique NFT protocols and products. Investors will find success across a wide variety of NFT protocols and applications. 

Over the past twelve months, the NFT landscape evolved from a small ecosystem with a few hundred million in sales volume to a multichain ecosystem. While the pace at which the NFT market proceeds to grow is uncertain, the continued expansion of NFTs is inevitable.