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- 1 The ever-flourishing NFT market has now lost 95% of its value as per a recent report.
- 2 Most NFTs are now left with negligible value.
The trend of non-fungible tokens (NFTs) is looking bleak and becoming weak with every passing day. Once attaining unprecedented heights during the global cryptocurrency market’s bull run, the current situation of the digital asset class suggests that the golden days are gone. A recent study shows that about 95% of all the existing NFT collections have zero value.
According to the research done by crypto gambling platform dappGambl, which analyzed over 73,000 NFT collections, found that a majority of them are left with negligible value. Eventually, other than a small number of people out of a whopping 23 Million, NFT users are in no profits over their investment.
The research found that out of 73,257 NFT collections, about 69,795 collections hold zero dollars in market capitalization.
An NFT collection could possess a number of digital assets from some hundreds to several thousands. Each entity in the collection holds different traits and floor prices are decided depending upon the demand.
It also brought forward that only 21% of the existing NFT collections were traded, the rest were never sold.
Among the top trading NFT collections, at least 18% of them had no floor price, i.e. no minimum trading price. About 41% of them have floor prices between $5 and $100. Only a handful, less than 1% of the collections have a minimum trading value of over $6,000.
On the other hand, the floor price is not the metric to suggest the health of the once-budding digital asset market. The report highlighted an instance of a collection to showcase the bleak condition of the NFT market where a project with $13 Million in floor price had an all-time sales of only $18.
Regardless of Value Decline, Energy Consumption is High
Cryptocurrencies and their closely linked NFTs rely on computing power, which in turn, demands energy. The energy expended on these digital assets should ideally be justified by their value. However, as the NFT market faces a downturn, questions arise about whether energy consumption is warranted or not.
Unlike cryptocurrencies that are mined through energy-intensive processes, NFTs are registered on blockchains differently. However, they still contribute to carbon emissions due to the energy required for their creation and blockchain maintenance.
In its report, dappGambl analyzed 73,000 NFT collections and identified an additional 195,699 NFT collections that appear to have no owners or market presence.
According to dappGambl, the energy needed to mint the NFTs within those collections amounts to 27,789,258 kilowatt-hours (kWh) of energy, equivalent to approximately 16,243 metric tons of CO2 emissions. Information on the energy cost of minting a single NFT can be found easily on the internet.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
