NFT Trading Is Ice Cold But Developers Are Still Hot for Web3

New reports were released that point to a major slowdown in NFT trading. Still, developers continue to deploy millions of smart contracts across EVM-compatible chains, pointing to interest in finding broader use cases for blockchain tokens.

Meanwhile, Etihad Airways announced plans to launch a Web3 loyalty program that will let its community of frequent fliers stake NFTs for miles. Plus, the team behind the Ordinals protocol is launching a non-profit to keep its development “clean” from corporate influence.

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Non-fungible trading woes: It’s been a no-good, very bad month for NFT trading, according to two new reports.

  • NFT trading volume is down: According to a new report from Web3 developer platform Alchemy, NFT trading volume fell 41% in the second quarter of 2023. Blake Tandowsky, growth analyst at Alchemy, told CoinDesk that whale NFT trading volumes peaked in Q2 2022, but as time went on, new entrants began to taper off. He suggested that NFTs need to figure out new use cases beyond their original JPEG iteration.

  • NFT sales have slowed: Another report from analytics firm DappRadar that sales of NFTs dropped by nearly half from January to July. In addition, the floor prices of blue chip collections like Bored Ape Yacht Club and Azuki sunk to two-year lows, indicating waning interest among traders to pay top dollar for the collections.

  • Silver linings? Polygon NFTs are still crushing and dominated a decent share of all trades in July. Meanwhile, Web3 developers are unperturbed by the gloomy numbers and continue to deploy millions of smart contracts across EVM-compatible chains, pointing to steady interest in decentralized apps and broader Web3 use cases.

High stakes: Etihad Airways, which has been steadily releasing NFTs through its EY-ZERO1 collection, has announced plans to launch a new Web3 loyalty program called “Horizon Club.” Holders of its NFTs already have access to a number of perks, including Etihad Guest Silver Tier Status, priority check-in and lounge access. But beginning in September, the loyalty program will allow EY-ZERO1 collectors to stake their NFTs for miles that can be redeemed for flights, upgrades and other perks.

  • Web3 loyalty programs are booming: Many major brands, including Starbucks, have recently adopted loyalty programs that incorporate blockchain technology and NFT rewards. The aviation industry has been slower to adopt these programs, though a number of airlines have started to embrace NFT ticketing and metaverse travel experiences.

Funding for Ordinals: Ordinals, the protocol that allows NFTs to be added to the Bitcoin blockchain, is establishing a non-profit organization to ensure that its developers get compensated for their work in a way that does not compromise their neutrality. Inscriptions on Bitcoin’s mainnet were first introduced by programmer Casey Rodarmor in January and paved the way for Bitcoin NFTs, though the development of the technology was mostly funded privately by Rodarmor and gifted contributions to the core developers.

  • Keeping Ordinals free of corporate influence: The Open Ordinals Institute, a registered 501(c)(3), will collect donations in bitcoin and share progress on the protocol development. “Given Ordinals’ unprecedented pace of adoption and real-world implications for various crypto-economies, we believe it is crucial to fund a strong team of non-corporate funded developers to ensure the security and neutrality of this open-source protocol,” said Erin Redwin, Open Ordinals Institute board member.

  • NFTs as an area of growth: Redwin said that the non-profit is interested in growing the newly-discovered utility of Bitcoin-based NFTs. “Companies across Web3 ecosystems – including Ethereum, Solana, Stacks and others – are quickly building Ordinals infrastructure after previously believing NFT-functionality ‘wasn’t possible’ on native Bitcoin,” he said.

CoinDesk - Unknown
(CryptoPunks)

Who: Larva Labs’ CryptoPunks (now owned by Yuga Labs)

What: CryptoPunks, one of the earliest NFT projects on Ethereum and also one of the most popular collections of all time, experienced a number of high-profile trades this week, including one from prolific NFT artist Beeple. His first profile-picture (PFP) NFT purchase, the clownish Punk #4953 set the stage for other high-value buys, including Punks #6634, which sold for 235 ETH (about $432,000) and Punk #3307, which sold for 500 ETH (about $915,000).

How: While the broader NFT market is down, and it’s rarer to see big money trades happen as often as they used to, the latest CryptoPunks pump is a positive sign that an NFT renaissance may be in our future. Plus, it boosts morale to see well-known figures like Beeple get involved in particular NFT communities – he even announced plans to host a Punks meetup at his Charleston studio in September.

Gucci’s got the goods: Holders of the 2,896 Gucci Vault Material NFTs, released by the luxury house in March, can soon exchange their NFTs for a wallet or bag.

Tee time: Web3 golf community LinksDAO has launched a number of new membership options as it renovates its newly-purchased Spey Bay Golf Course in Scotland.

King of the jungle: Bored Ape parent company Yuga Labs will acquire metaverse-focused Roar Studios to build out its vision for Otherside.

NFT Now – or never: NFT publication NFT Now has laid off staff in response to “over-hiring.”

Grand Prix NFT: Crypto exchange Kraken is crowdsourcing NFTs that it plans to put on the back of a British F1 race car during the U.S. Grand Prix this October.

Are celeb ads back?: Comedian and actor Adam DeVine is the face of Bitget’s weird new campaign which recalls other ill-fated ads from celebs like Matt Damon.

Imagine you want to buy an Andy Warhol artwork. Most of us can’t afford to fork over record-breaking sums like $195 million for a Marilyn painting or even $850,000 for a mere print of Queen Elizabeth. Many people want to buy art either for pleasure or as an investment but are priced out. But what if you could buy “shares” of an artwork like you can buy fractions of a publicly traded company? That’s the idea behind the tokenization of real-world assets.

Edited by Toby Leah Bochan.

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