NFTs have become the biggest crypto on-ramp for countries in Central and Southern Asia, as well as Oceania, according to a report from Chainalysis on Wednesday.
The blockchain analytics firm noted that, in Q2 2022, 58% of web traffic from these countries to crypto services was NFT-related.
NFTs are unique blockchain-based tokens that are used to represent ownership over other digital or physical items. These tokens are frequently traded as speculative collectible items, but may also provide additional functionality and benefits to their holders.
The market for NFTs exploded within the last two years. Sales for these digital assets reached $23 billion in 2021 and are on pace to break that record this year, even though the NFT market has cooled in the second half of 2022. NFT collections like CryptoPunks and Bored Apes have helped make digital collectibles mainstream—and, according to Chainalysis, the NFT boom has been particularly impactful in broadening crypto adoption in Central and Southern Asia.
The analytics firm noted that another 21% of traffic to crypto services was related to play-to-earn blockchain games, which reward players with cryptocurrencies and often integrate NFTs into their gameplay. Chainalysis suspects that the correlation is likely no coincidence.
How the Ethereum Merge Ends the Environmental Debate About NFTs
“For countries with high web traffic to NFT marketplaces—especially Thailand, Vietnam, and the Philippines—a large portion of that NFT-related traffic may therefore come from players of blockchain games,” the report said.
Blockchain games like Axie Infinity have been particularly popular in the Philippines, though these games have seen a considerable drop in users in recent months as crypto prices have collapsed. In terms of crypto adoption in the region, the Philippines is second only to Vietnam.
Axie Infinity NFT Sales Rising Amid ‘Play-and-Earn’ Transition
Overall, Chainalysis found that citizens in the region received a total of $932 billion in cryptocurrency value from July 2021 to June 2022. That makes it the third-largest crypto market that the company has indexed.
Besides NFTs and play-to-earn games, cryptocurrency is also growing popular as a remittance tool in these regions, according to the firm. “Pakistan, India, and Bangladesh each have $20+ billion remittance markets, and blockchain-based payment providers are beginning to disrupt traditional intermediaries.” the report noted.
Consistent with the popularity of remittance payments and NFTs, the two most actively traded crypto assets in these countries are stablecoins, Ethereum, and Wrapped Ethereum.