Analysts reveal how popular unique NFT tokens will become in 2021

January 28, 2022 by cryptobreak

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The biggest sensation in the crypto industry last year was the field of unique tokens. The NFT hype grew so fast that a huge number of global celebrities and brands have now joined it. Experts at analytics platform Nansen summed up the results of the hype. According to their information, by the end of last year the NFT transaction volume exceeded 4.6 million or $17 billion.

Note that the popularity of NFT tokens is at its peak even now. Judging by the popularity of the corresponding query on Google around the world, people are more interested in unique blockchain-based tokens today than ever before.

Popularity of Google query about NFT tokens

Major cryptocurrency trend

Nansen points out that its peak of trader activity in the area of unique tokens was in May and August 2021. The last month was particularly strong, with a huge increase in the popularity of NFT collections like the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club. On one day alone – August 29 – trading volumes with unique tokens jumped above 132,000 ETH or more than $422 million.

NFT trading volumes in 2021

We checked the current data: NFT's performance in 2022 isn't far behind either. In particular, the trading volume figure in mid-January set a record. For the week it was the equivalent of 2.37 billion dollars. At the same time, the previous high from August 2021 was only 1.08 billion.

Trading volumes of unique NFT tokens

Nansen CEO Alex Swanewick shared his thoughts on the reasons for the growth of the NFT sector in an interview with Decrypt. Here’s his rejoinder.

It’s hard to single out a single event that led to the growth of the haip around NFT. Was it the popularity of the Axie Infinity project in the play-to-earn trend? Or OpenSea’s record-breaking trading of pictures in the form of NFT? Or perhaps the purchases of BAYC by famous stars? It was a massive movement with a lot of projects that played an important part in it.

The explosive growth of NFT has also been associated with a surge in the use of gas for a leading trading platform in the field called OpenSea. According to Nansen experts, the trading platform surpassed popular decentralised exchange Uniswap in terms of altcoin network resource consumption in September and October.

As a reminder, gas is needed to conduct transactions on the various cryptocurrency networks and Etherium in particular. It is essentially a fee to perform the calculations required to add a transaction to the network.

Profits of the largest NFT traders in 2021 were $185 million

Most NFTs are still predominantly created on the Ethereum blockchain, which means that issuing and transmitting such tokens is now quite expensive. This is due to the cryptocurrency’s too low bandwidth, which is limited to around 13-15 transactions per second. At the same time, other networks like Avalanche, Fantom and Solana offer cheaper alternatives with low fees. Because of this, the frequency of smart contracts deployed on the ETH blockchain dropped sharply in the second half of 2021, from 2.7 million in June to just 300,000 in October.

Earlier this year, NFT appeared in test mode on Twitter: users can now confirm that their avatars are indeed unique images associated with tokens on their wallet. Something similar may soon appear on Reddit, one of the most popular social platforms after Twitter.

Rumours of NFT integration into Reddit spread after a statement from programmer Nim Mauji, who spotted an ad banner in the platform’s code with the following content. Here’s his quote, cited by Decrypt.

Your NFTs can now become your avatar. Unique tokens can be assigned as an image to a Reddit account.

Promotional banner with NFTs on Reddit

While there aren’t many details about the news, Reddit representatives have already confirmed its authenticity. According to them, the new feature is “at a very early stage of testing and is not yet available to public users on the site.” Here’s how Reddit speaker Tim Ratschmidt commented.

We’re always exploring ways to provide value to users and communities on Reddit. We are currently testing the ability to use NFT as profile images or avatars and confirm token ownership.

Reddit platform logo

We think the current popularity of NFT tokens, given the not-so-best conditions in the coin market, speaks volumes. From the looks of it, in the event of a possible niche u-turn towards growth, this area could show quite a few records. In addition, there are likely to be new uses for NFT. So there will clearly be more participants in the cryptocurrency industry because of this.

What do you think about it? Share your opinion in our Millionaire Crypto Chat. There, we’ll talk about other topics that affect the world of decentralised assets.