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The NFT market has fallen so far that fees in Ethereum are now back at 2020 levels

06 Jul, 2022
NFT market fell

For smart-contract-supporting blockchains, the main driving force for the past couple of years has been decentralised finance (DeFi) and non-fungible tokens (NFTs). In 2021 alone, each of these segments of the cryptocurrency market grew by an order of magnitude as DeFi rose to $180 billion, and the NFT sector to $25 billion.

Image source: defillama.com

However, the crisis of this year led to a large-scale exit of investors not only from the financial, but also from the cultural sector. NFT's daily turnover decreased to 16 thousand tokens (or $13 million) — levels unseen since June of last year.

Image source: nonfungible.com

A bright spot among the statistics is the release in May of a new collection from Yuga Labs, whose bored monkeys continue to hold the top monthly rating with a turnover of $58 million in June. Three weeks ago, one of the pictures sold for 1024 ETH or $1.17 million. For the time being, the Bored Ape Yacht Club collection boasts a turnover of $2 billion and third place in the overall standings after Axie cryptopanks and animals.

Image source: dappradar.com

The release of a new collection complete with land plots in the Otherside metaverse led to a short-term surge in commissions on the Ethereum network in May, but the downtrend has now resumed and transactions now cost less than $3. This is the same level as August 2020.

Image source: bitinfocharts.com

More than 90% of all NFTs are minted on Ethereum, and Yuga Labs previously noted that it will continue to use only this network for its collections. The advantage of Ethereum over younger and faster competitors is in its extremely high levels of security and stability. For example, in Solana, you will pay less than a cent for commission, but at the same time, the network has gone down seven times over the past 10 months, with transactions completely ceasing.

Image source: StormGain crypto exchange

Declining interest in NFT and DeFi makes Ethereum less in demand. On the one hand, this is leading to lower commission. But on the other hand, the coin is also becoming less of an attractive investment compared to Bitcoin.

StormGain Analysis Team

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