The NFT market is down a lot, but the year ended almost on par with 2021 because it started out so well.
Even though sales and prices have been going down for months, the total number of NFTs sold last year was almost as high as it was in 2021, according to data from DappRadar. The NFT market had a busy start to 2022, which boosted the total at the end of the year and helped make up for a few slow months.
DappRadar told Decrypt that the natural trading volume of NFTs on blockchain platforms and marketplaces was about $24.7 billion in 2022. That’s a slight drop from the total of $25.1 billion in 2021, when the NFT market saw a surge in activity and interest as tokenized collectibles grew beyond a niche interest.
The “organic” data on DappRadar doesn’t include trades that are thought to be wash trades or that have been manipulated in some way.
Wash trading happens when traders sell their own NFTs back and forth between their own wallets at inflated prices. This is often done to try to game a token rewards model on a marketplace. Wash trading worth billions of dollars was left out of the data. This was seen at marketplaces like LooksRare and X2Y2, which gave tokens as an incentive to trade.
Even though trading volume was mostly flat for the year, DappRadar saw a huge rise in the number of NFTs that were traded. In 2022, the analytics company kept track of about 101 million NFT trades, compared to about 58.6 million NFT trades in 2021. In other words, as the prices of crypto and NFTs fell, more NFTs were traded at lower USD values.
NFTs in 2022
Over the course of the year, the crypto market lost a lot of value, and the losses sped up in May when Terra’s LUNA and UST went down. The collapse of the cryptocurrency exchange FTX and the ripple effect it had on the industry made the so-called crypto winter even worse. This had a further effect on the prices of crypto.
Throughout the year, the NFT market moved in a similar way. Sales went up in January because the momentum from 2021 carried over into the new year. The biggest marketplace, OpenSea, had a record month with $5 billion worth of trades.
After that, trading volume went down for a few months, but the huge launch of NFT land plots for Yuga Labs’ Otherside, a Bored Ape Yacht Club-themed metaverse game, in late April boosted the market and drove OpenSea to a single-day trading volume record. At that point, it looked like the number of NFTs sold in 2022 could easily beat that of 2021.
But that rise didn’t last. As the prices of cryptos fell in May, NFT trading also slowed down, which caused prices to drop sharply. According to DappRadar, monthly volume dropped from almost $3.3 billion in May to just over $1 billion in June, but it hasn’t been above $1 billion since then.
The NFT market ended 2022 with less of a bang than it did at the beginning of the year. But overall trading volume went up a little bit from November, and the number of NFTs sold in December went back up after dropping the month before.
DappRadar says that there were nearly $684 million worth of organic trades on the NFT market in December. This is more than the adjusted total of over $662 million for November. During the month, about 6.7 million NFTs were sold, which is more than the 4.8 million sold in November and the 6.1 million sold in October.
DappRadar says that in December, OpenSea was still the best place to trade organic NFTs, with over $297 million worth of trades. That’s more than in November, when it was about $259 million. Blur, a newer competitor that encouraged NFT trades by promising token rewards in the future, went from having about $115 million in November to almost $177 million in December.
The Solana blockchain kept going up and down, dropping from $95 million in November to nearly $70 million. It had dropped to $67 million in October before, after a hot September when the release of y00ts led to nearly $134 million in NFT sales. Due to the FTX crash, the value of SOL dropped sharply in November and December.
Flow, the blockchain platform behind NBA Top Shot and NFL All Day, halted the bleeding after two consecutive months of reductions of 50% or more. December NFT sales for Flow were around $6.8 million, down from approximately $7.4 million in November.
And Top Shot experienced its first minor month-over-month increase following months of reductions, with NFT sales increasing to $2,2 million in December (according to CryptoSlam) from less than $2,1 million in November. The FLOW token established a new all-time low price earlier this week following a steady decline in NFT platform activity.