NFTs Almost Completely Worthless, Crypto Researchers Find – Rolling Stone
NFTs, or non-fungible tokens, were once hailed as a groundbreaking innovation in crypto and digital art. However, a new report from dappGambl, a community of experts in finance and blockchain technology, reveals that the vast majority of NFTs are now considered worthless.
The report, titled “Dead NFTs: The Evolving Landscape of the NFT Market,” analyzed 73,257 NFT collections and found that 69,795 of them have a market cap of zero Ether (ETH), the second most popular cryptocurrency. This means that 95 percent of NFTs would not fetch any value at all – a stark contrast to the $17 billion trading volume they reached during the frenzied bull market in 2021. The study estimates that there are approximately 23 million investors who own these tokens that have no practical use or value.
One of the major reasons for the decline in NFTs’ value is the oversupply in the market. According to the study, only 21 percent of the collections included in the analysis can claim full ownership, leaving around 80 percent unsold. Buyers have become more discerning, seeking NFTs with clear use cases, compelling narratives, and genuine artistic value. Projects that lack these attributes are finding it increasingly difficult to attract attention and sales.
While there were headlines about NFTs selling for millions of dollars during their peak, these exorbitant prices are now rare. Less than one percent of NFTs are listed for more than $6,000, and the majority of the most expensive collections are priced between $5 and $100. Furthermore, almost 20 percent of the top collections have a floor price of zero. The report highlights that these prices often reflect wishful thinking from sellers rather than any genuine demand for the NFTs.
Despite the current state of NFTs, the researchers suggest that the assets may still have a future if they evolve in a way that gives them a specific function. For example, NFTs could serve as passes for special event access or virtual items to be bought and traded in video games. However, this would not address the environmental concerns associated with NFTs.
The environmental impact of NFTs became a major controversy as their popularity soared. Minting NFTs on the blockchain requires energy, and their trading relies on cryptocurrencies that have a significant carbon footprint. The “Dead NFTs” report reveals that the carbon emissions from nearly 200,000 NFT collections with no apparent owners or market share were equivalent to the annual output from 2,048 houses or 3,531 cars.
Despite the environmental concerns, if NFTs experience a modest comeback, it is likely that climate considerations will be brushed aside once again. The hype cycle often overrides such concerns.
