Data demonstrates that the dominance of NFT trading on Ethereum has dropped to 8.3% when market interest remains low.
NFT Dominance on Ethereum Decrease As Stablecoins Acquire Share
According to data from on-chain analytics startup glassnode, the proportion of non-fungible tokens in total ETH transactions was between 18% and 22% in the first half of 2022. “Dominance” refers to the proportion of total Ethereum blockchain transactions occupied by a specific token type.
As a result of its smart contracts, ETH is a network that hosts a vast ecosystem of applications. Stable coins, NFTs, decentralized finance (DeFi) applications, and ERC20 tokens are some of the most common structures on the chain.
The following chart demonstrates how the dominance of two of these applications, non-fungible tokens and stable coins, has evolved over time:
As illustrated in the graph above, non-fungible tokens flourished on the Ethereum blockchain over the first half of this year, accounting for roughly 18% to 22% of all network transactions. The dominance of all stablecoins on the blockchain fluctuated around 10% throughout the same time frame. Starting in the second half of 2022, however, the formerly growing non-fungible token market starts to experience a change.
As a result of a long and deep bear market in the sector as a whole, investors became less interested in NFTs. This was reflected in a sharp drop in the dominance of these tokens on the Ethereum blockchain. With this drop in the number of digital collectibles-related transfers on the network, these tokens now have only 8.3% of the share of the market.
While NFTs were experiencing a downtrend, stablecoins were largely steady and rose until the FTX crash, resulting in larger market domination across all stablecoins. Stablecoins now account for around 12.5% of all Ethereum transactions, surpassing the dominance of non-fungible tokens in the market.