It shows the buzz that the Non-Fungible Token (NFT) market has generated and how OpenSea has dominated this field for the past few months as it now makes up for more than 95% of the total NFT transaction volume.
In July, OpenSea was valued at $ 1.5 billion, but as interest in NFTs increases, the valuation keeps increasing. Why is OpenSea recording huge transactions in 2021?
What are NFTs?
NFTs are data stored in a digital ledger that represents a physical object, a music album, or digital art. NFTs also known as non-fungible tokens are a unit of data stored on a ledger that certifies that object to be unique. NFTs cannot be replicated and are not interchangeable.
Why is OpenSea Recording Such Huge Numbers?
Founded in 2017, OpenSea started with a Series A funding round of $23 million and a Series B funding round of $100 million. Since its inception, the company has seen large numbers of users and transactions as the craze for NFT doesn’t seem to be waning anytime soon.
With the resurgence of NFTs, OpenSea has become an integral part of the recent success of non-fungible tokens. The currently most popular NFT series are CryptoPunks and Bored Ape Yacht Club (BAYC), which are now known as “blue-chip” projects in the NFT space.
They are still very sought after and both have posted incredible monthly transactions of 215,000 ETH and 90,000 ETH, respectively. The base price of CryptoPunks is now 120 ETH and BAYC is now 25 ETH.
CryptoPunks has benefited from the recent interest of Chinese investors. Among Chinese investors, NFT is more of a status symbol, and the competition for as many rare NFTs as possible continues to heat up.
Recently, NBA superstar Steph Curry bought a non-fungible token based on Ethereum from the Boring Yacht Club for around $180,000. According to the Boring Ape Yacht Club on the NFT auction platform OpenSea, the two-time MVP bought NFT on August 28 for 55 ethers.
On August 23, Visa announced that it had purchased CryptoPunk NFT for about $150,000. Cuy Sheffield, Head of Cryptocurrency at Visa, said the main reason for the purchase was to gain first-hand experience by working with its partner Anchorage Digital.
OpenSea’s performance versus competitors, Rarible outperformed OpenSea in 2020 after making more than $24 million in NFT sales. In a fast run through 2021, OpenSea now sells 150 times the volume of Rarible. Despite the slump in the leaderboard, Rarible’s daily volume has almost quadrupled since 2020.
According to data from Dune Analytics, another NFT marketplace SupeRare processed around $6 million in transactions over the past year. Despite these numbers, OpenSea still takes the lead, and this begs the question if OpenSea can maintain its dominance in the NFT market.
Potential of NFTs in Digital Art
As more brands keep investing in NFTs, there’s no telling when this hype will end. But why are NFTs so valuable today especially in the digital art ecosystem?
For a long time, digital art was underestimated, mainly because it is freely available. To help artists create financial value for their work, NFT adds the key factor of scarcity.
Some collectors are more likely to yearn for the “real” work when they know that the original version of something exists. NFT has countless other uses, including licenses and certifications, game elements or items, land, or other items in the virtual world, and verifying ownership of physical items such as luxury goods and accessories.
Items that previously required physical certificates of authenticity that could be lost or destroyed can now choose permanent online verification based on blockchain, and systems such as QR codes can be implemented to verify authenticity via normal smartphones. It also allows potential buyers to see the owner’s history and the purchase price of the item instead of just relying on the seller’s words. As NFTs help preserve ownership and originality, their value in the digital space will keep increasing.