OpenSea saw their trading volume drop 13% to $303 million, the lowest level since June 2021, as other NFT marketplaces take a slice of its revenue.
The secondary NFT marketplace is experiencing low volumes despite onboarding collections from Ethereum layer-two solution Arbitrum in September 2022.
OpenSea and major NFT repositories affected
The trading volume of OpenSea is down 94% Since reaching an all-time high of $4.86 billion in January 2022. Data from Dune Analytics also shows a nearly 86% drop in ETH trading volume since the start of the year. OpenSea supports NFTs from several blockchains including Ethereum, Solana, Avalanche and Klatyn. Layer-two solution Arbitrum recently announced that its NFTs will be listed on OpenSE.
Transaction data from DappRadar also shows a sharp decline in secondary market NFT transactions from over $406 million in May 2022 to $7.63 million at press time, a 98% drop.
The price floor for the Bored Ape Yacht Club NFT collection, the NFT collection with the highest selling volume ever, has dropped from a peak of 144.9 ETH on May 1, 2022 to 64.7739 ETH at press time. Another popular NFT collectible, Cryptopunks, has seen its price floor drop from 122 ETH to 100 ETH on August 30, 2021.
Blame the market?
This downtrend is in line with a new Activate Technologies report which suggests that the hype phase for NFTs is over. The number of adults 18 years of age or older purchasing NFTs declined from 76% in 2021 to 51% in 2022. This data is supported by a recent report from Binance Research, which suggests that the decline in OpenC users is a symptom of a wider decline in the cryptocurrency. market, which prompted investors to settle for riskier and more speculative asset classes.
NFT analyst NFTkek said the number of NFTs had decreased over the past month, suggesting that NFT artists are creating fewer collections.
OpenSea also faces growing threats from multi-chain markets such as Magic Eden. Magic Eden started out as a marketplace for NFTs installed on Solana. Since then it has expanded its product offering. Its range includes Ethereum NFT collections such as ArtBlocks, Otherside for Otherside, Bored Ape Yacht Club and Cryptopunks. Popular social media site Reddit has also seen an explosion of interest in its NFT collection, with users creating 3 million wallets.
While challenging for marketplaces like OpenSea, multichain listings benefit the end user. This is because NFTs have the potential to be traded across different blockchains, improving the liquidity of NFTs and potentially increasing their value. Users can turn to other blockchains in the market that offer lower fees than the Ethereum network.
At press time, Cryptopunks had the highest Ethereum NFT trading volume on Magic Eden at 881,800 ETH.
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