A recent study conducted by crypto-gambling site dappGambl has revealed some surprising findings about the current state of the Non-Fungible Tokens (NFTs) market. According to the research, a staggering 95% of NFTs are now considered “worthless.”
NFTs gained significant popularity and value during the cryptocurrency boom, with trading volume reaching nearly $2.8 billion per month in August 2021. These digital assets were seen as high-risk, high-reward investments during the crypto bubble. However, while major cryptocurrencies have maintained respectable valuations, NFT valuations have suffered a significant crash. Recent data shows that the weekly trading volume for NFTs is only $80 million.
To conduct the study, dappGambl analyzed 73,257 NFT collections sourced from NFT Scan. The most shocking conclusion drawn from the research is that the majority of NFTs currently hold no market value. In fact, around 69,795 NFT collections are considered “worthless” as they have a market value of zero ETH.
Further analysis of the NFT market revealed that 79% of all NFT collections have unsold tokens. This suggests a significant imbalance between the creation and demand for NFTs at the moment. The lack of clear use cases, compelling narratives, or genuine artistic value makes both new and established collections unattractive to investors.
The research also shed light on the environmental impact of NFT creation. Minting NFTs relies on blockchain technology and has been associated with high power consumption, similar to ETH and BTC mining. The study estimated that a purported 195,699 NFT collections with no owners or market share would have required 27,789,258 kWh to mint, resulting in approximately 16,243 metric tons of CO2 emissions.
Despite the discouraging findings, dappGambl believes that NFTs still have a place in the future. During the current downturn, the source suggests that NFTs need to be historically relevant, genuine art, or offer real utility to regain value. While opinions and interpretations may vary, establishing these criteria could provide a better framework for assessing the worth of NFTs compared to the speculative frenzy of mid-2021.
In summary, the research conducted by dappGambl raises concerns about the current state of the NFT market. The majority of NFTs are considered worthless, with low trading volumes and a lack of demand. Additionally, the environmental impact of NFT creation highlights the need for more sustainable practices within the industry. Moving forward, it will be interesting to see how the market evolves and if NFTs can regain their value and credibility.
