In a week that saw cryptocurrencies take a wild ride, Meebits, TOR and XCOPY all landed big NFT sales. Despite the DeFi side of things taking a pounding after Elon Musk’s SNL performance and Tesla’s abandoning of Bitcoin, NFTs powered ahead. Maybe with a bit too much power.
Gas Prices Skyrocket
The United States isn’t the only place with a gas problem right now. Over the last week, Ethereum gas prices have topped $200USD for even basic transactions. That, in turn, forced the volume of NFT sales down for the first time in recent memory, as investors waited for better conditions.
Although gas prices have stabilized somewhat, the 45% decline in activity was brutal. This indicates Ethereum’s gas fees will continue to be a problem into the future. If the cost of transactions exceeds the value of the NFTs being sold, fewer people will have the stomach to participate.
NFT Sales, Big and (Not So) Small
Larva Labs continues to dominate the NFT sales space. Their Meebit #10761 sold for a whopping $2.69M, while Meebit #19729 cleared $1.01M. Larva Labs is no stranger to success, of course, as the creators of the ubiquitous CryptoPunks collection.
Meanwhile, a fundraiser for the TOR Project — dedicated to protecting privacy online — brought in over $2.05M at Foundation. The work, entitled Dreaming at Dusk, was sold to PleasrDAO, who has a history of investing in charitable NFTs.
And in case you’d forgotten about the permanence of NFTs, a series of three-year-old works by XCOPY just sold for over $390,000 a piece. These are “deep cuts” pulled from the catalogue by a savvy investor. Although crypto may seem like a fad sometimes, these are long-term investments with serious growth potential.
Marketplace Ups and Downs
Tied into the Ethereum gas fiasco are the NFT marketplace rankings over the last seven days (as calculated by DappRadar). Of particular note is the drop in volume for any marketplace dealing primarily with ETH — OpenSea fell over 76%. Compared to AtomicMarket, which uses Wax, or Axie Infinity, which uses Ronin, the Ethereum-based marketplaces took a beating.
The solution to this problem isn’t obvious. As NFTs become more popular, network congestion is bound to increase, which will push gas prices higher and stifle sales. Ethereum’s big “merge” to its Proof-of-Stake system could still be over a year away, so it seems we are very quickly reaching a pinch point.
Thankfully, NFT sales aren’t solely dependent on a single crypto base. As other altcoin marketplaces emerge (or sites like OpenSea accept Tezos, for instance) the needed diversity will return. Let’s just hope it happens in time.