NFT transactions skyrocketed to record highs this year as the sector sees strong engagement from existing traders.
The non-fungible token (NFT) market is witnessing a strong rebound in activity this year, as sales volume has reached levels unseen since 2022, according to a new report from DappRadar.
While overall trading volumes remain relatively subdued due to lower average prices, the number of transactions has surged sharply throughout 2025.
From Slump to Surge
In the first quarter, 7 million NFT sales were recorded, rising to 12.5 million in the second quarter. The momentum accelerated further in Q3, with over 18.1 million NFTs sold, representing a 45% jump from the previous quarter, and generating $1.6 billion in trading volume.
Despite this surge in transaction counts, DappRadar stated that actual user adoption remains modest. The number of unique wallets trading NFTs rose from 1.66 million in Q1 to 2.14 million in Q3, a comparatively smaller increase than the spike in sales. This means that individual wallets are trading more NFTs on average, jumping from roughly 4.2 per wallet in Q1 to 8.4 in Q3, which indicates that existing participants are becoming more active rather than new users entering the market.
Among NFT categories, gaming has been the notable laggard. DappRadar reported a 17% drop in trading volume and a steep 32% decline in the number of gaming-related NFT transactions over the past quarter.
On the other hand, the sports NFT sector has seen an impressive revival, as trading volume of this cohort was up by 337% to $71 million while sales count soared 143% to 4.1 million. The surge is largely attributed to Sorare, the fantasy sports platform offering digital collectibles across football, basketball, and baseball. The platform’s success, buoyed by the launch of new sports seasons, has helped offset weakness in other sectors.
Airdrops and OG NFTs
The recent uptick can also be linked to strategic campaigns and revived interest in older projects. A major contributor has been OpenSea’s campaign ahead of its anticipated token launch, which rewarded active traders and incentivized frequent transactions. This initiative encouraged users to trade lower-value NFTs to qualify for rewards and boosted the platform’s overall activity.
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As a result, OpenSea’s sales count climbed 29% in Q3 to 9.27 million assets sold.
Simultaneously, profile picture (PFP) collections have regained prominence, led by blue-chip projects like CryptoPunks, Bored Ape Yacht Club (BAYC), Moonbirds, and Pudgy Penguins. Trading volume for PFPs rose 187% quarter over quarter to $544 million, amidst renewed collector confidence.
Adding to the resurgence, Yuga Labs streamlined its portfolio to focus on BAYC, Mutant Ape Yacht Club (MAYC), and Otherside during the same period. Meanwhile, Moonbirds, now under Orange Cap Games, has emerged as Q3’s standout revival, recording 8,311 NFT sales worth $88 million, owing to the fresh momentum building around its upcoming BIRB token launch on Solana.
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OpenSea, one of the most prominent NFT marketplaces, has experienced a significant downturn in its overall business operations due to several factors, including low engagements in the sector.
Over the past few months, some top employees have left the company to work elsewhere as the firm’s troubles continued to pile up. With a significant reduction in the existing workforce and other concerns, the future of the once-giant NFT marketplace is now uncertain, raising concerns about its long-term viability.
OpenSea Losing Its Executives
Four OpenSea executives have resigned over the past three months from OpenSea. These include the former COO, Shiva Rajaraman, the former head of business and corporate development, Jeremy Fine, and the lead lawyer, Karen Kreuzkamp. The firm’s former vice president of finance, Justin Jow, also left earlier this year.
Following their departure, they have secured employment in other prominent companies, as revealed on their LinkedIn pages. Rajaraman, for example, currently works at Uber. Fine joined the Growth and Product Partnerships at OpenAI. Jow secured a job at Scale AI. Kreuzkamp was employed at Tools for Humanity, the firm behind the iris-scanning crypto project, Worldcoin.
In addition to these four, one of OpenSea’s engineers, 0age, left the NFT marketplace for Uniswap, the Ethereum-based decentralized exchange.
Challenges Facing OpenSea
Although the NFT market played a key role in driving the 2021 bull run, engagements with the sector have drastically declined over the past two years. Like every other NFT platform, OpenSea faced a noticeable downtrend in market activities, resulting in reduced revenue for finance operations.
On the other hand, new competitors like Blur and Magic Eden have taken the spotlight. These platforms provide lower fees and new features, attracting more users and creators. OpenSea now faces the challenge of reclaiming its lead in a crowded and competitive space.
Additionally, the firm is experiencing increased legal and regulatory scrutiny, including an investigation by the United States Securities and Exchange Commission (SEC) into whether the NFTs on its platform are unregistered securities.
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Analysts at Scam Sniffer say bad actors stole $55 million worth of crypto and created over 11,000 phishing websites in January alone.
In an X thread on Feb. 9, Scam Sniffer revealed a trend observed in January, noting a rise in phishing attacks coinciding with heightened activity within crypto communities following a series of airdrops in the previous month.
🚨 ScamSniffer’s January Phishing Report 🚨
🧵 1/6
in January, over $55M was stolen in phishing scams across EVM chains. Top 7 victims lost $17M! pic.twitter.com/Fq0tulYkVB
— Scam Sniffer | Web3 Anti-Scam (@realScamSniffer) February 9, 2024
According to the data, scammers created over 11,400 phishing websites in January, impersonating Manta Network, Frame, SatoshiVM, AltLayer, Dymension, zkSync, Pyth, OpenSea, Optimism, Blast, and others. Apparently, their efforts paid off as cybercriminals pilfered nearly $55 million worth of crypto across Ethereum Virtual Machine-based networks, with the top seven victims losing $17 million.
“The majority of the thefts occurred on the Ethereum mainnet, followed by Arbitrum, BNB, Optimism, and Polygon.”
Scam Sniffer
As per Scam Sniffer, a common method employed by hackers involved exploiting the ERC-20 Permit function, deceiving users into unwittingly transferring funds from their non-custodial wallets under the guise of legitimate operations.
Total crypto victims in January 2024 | Source: Dune
Additionally, perpetrators increasingly leveraged the increaseAllowance function, enabling them to manipulate token allowances granted to malicious smart contracts. Many people fell for scams because cybercriminals were actively posting fake comments on X pretending to be real projects like Optimism and zKSync, underscoring the persistent threat posed by fraudulent online presences.
As crypto.news previously reported, illicit crypto addresses received over $24 billion worth of crypto in 2023, down from an estimated $39.6 billion in 2022. According to Chainalysis data, there has been a transition in the types of assets involved in crypto crime, with stablecoins now constituting the majority of illicit transaction volume.
OpenSea chief executive officer Devin Finzer has disclosed that the New York-based marketplace for non-fungible tokens (NFTs) is open to M&A opportunities.
In an interview with DLNews, Finzer revealed that OpenSea has been charting new waters, openly expressing interest in acquiring and potentially being acquired, amid the fluctuating fortunes of the NFT world.
According to DL News, OpenSea CEO Devin Finzer revealed that OpenSea has received acquisition intentions and remains open to potential acquisitions, but did not specify when and who would acquire it, and said that OpenSea is not actively looking for acquirers at present.…
“We think that if the right partnership comes along, then that’s something we should certainly consider,” Finzer said in the interview.
However, while acknowledging that OpenSea is receptive to such prospects, Finzer did not provide details on the timing or the interested parties. He also emphasized that currently, OpenSea is not pursuing an active search for buyers.
In the interview, Finzer conveyed an agile strategy for navigating the uncertain tides of the digital collectibles space, indicating that OpenSea is ready to embrace partnerships that align with its vision for the future.
The sharp decline in trading volumes witnessed in 2023 has challenged the NFT marketplace’s dominance, bringing it down from a peak that encapsulated 90% of the market to a mere $171 million.
And while relatively newer platforms like Blur have surged ahead with aggressive tactics and token airdrops, Finzer insisted that OpenSea still maintains a stronghold on user safety, having weeded out fraudulent collections to protect its community.
OpenSea maintains positive outlook
The disruption of the NFT market hasn’t dampened Finzer’s outlook, which he says remains focused on developing OpenSea into a brand synonymous with trust and user protection, even amidst potential consolidation in the industry.
Earlier in the month, Finzer doubled down on the potential of NFTs. In a dialogue with Bloomberg, he expressed OpenSea’s vision to unearth the most compelling applications for non-fungible tokens, even as market metrics appear to wane.
At the time, tracking sources such as DappRadar pinpointed that OpenSea’s trading volumes had been hovering around $3.5 million. Blur had edged out the competition with trading volumes of $20.8 million, followed by OKX NFT at $4.4 million.
Even then, Finzer emphasized that OpenSea’s forward-looking strategy was not anchored to the fleeting trends of the NFT market’s dynamics, claiming that trading volumes don’t always paint the full picture due to promotional tokens used by other platforms to spur trading.
According to him, OpenSea is not sitting idly by in the face of decreasing trading volumes but instead is innovating with “OpenSea 2.0,” which promises a bespoke user experience by tuning its interface to cater to specific needs—such as visualizing ticket NFTs in a calendar format.
Moreover, the platform is taking proactive steps to fortify its defenses against fraud by enhancing the detection of counterfeit NFT collections and malicious web addresses, aiming to shield its patrons from digital asset theft. The official debut date for this upgraded version remains under wraps for the moment.
As the year draws to a close, we do an NFT market analysis, mapping its trajectory and comparing it with the predictions experts have laid out for 2024.
2023 was not the best year to be a non-fungible token (NFT) holder or trader. Following nearly two years of unprecedented growth, a liquidity plunge hit the NFT market in Q4 2022, persisting into mid-2023.
It caused the floor prices of at least 95% of NFT projects to crash near zero levels, as revealed by a dappGambl report from September.
To stress the gravity of the situation, the report indicated that nearly 80% of all NFT tokens remained unsold as there was virtually no demand to keep up with the supply.
Furthermore, per dappGambl, less than 1% of nearly 9,000 top NFT collections it surveyed had a value north of $6,000. About 41% were priced between $5 and $100, while 18% were worthless, with a floor price of 0 Ether (ETH).
Dead NFTs | Source: dappGambl report
NFT market analysis for 2023
Despite the decline in the broader crypto market, NFT trading volumes increased sharply in Q1 2023. The improved numbers came from zero-fee incentives, airdrops from the Blur NFT marketplace, and its royalty wars with OpenSea.
During that early part of the year, NFT token transactions reached $4.7 billion, with Ethereum dominating the market, registering $514 million in trades in one month alone.
The network also accounted for at least 50% of total NFT transactions in 2023, with average monthly transaction volumes of between 1 and 2 million per data from CryptoSlam.
Meanwhile, Solana (SOL) experienced a dip in its NFT market size as it struggled with the fallout from the FTX bankruptcy and a series of downtimes and glitches that affected it in 2022.
However, after attaining a high of 74,550 ETH in mid-February, trading volumes across NFT blockchains decreased gradually, with NFT coin holders reaching year-low levels by April, per data from NFTGo.
Q1 2023 also saw the resurgence of the NFT lending market. Players in the space disbursed more than $25 million in the first three months of the year, with platforms like ParaSpace becoming the most prominent, while NFTFi accrued the highest number of NFT lending users.
One of the main talking points of the 2023 NFT landscape was Bitcoin’s (BTC) unique take on non-fungible tokens. The so-called Bitcoin Ordinals offered a different spin from the more popular variants on networks like Ethereum and Solana. However, they came with limitations, including slower transaction speeds and a limited application range.
But despite these challenges, Bitcoin’s NFT ecosystem made significant strides, exemplified by Yuga Labs’ successful auction of its TwelveFold collection.
Launched in February 2023, Bitcoin Ordinals generated about $400 million in trading volumes by May, with total sales just north of 832,000.
Elsewhere, Gem.xyz’s rebrand to OpenSea Pro also made headlines. It was accompanied by introducing the Gemesis NFT line, which registered rapid trading growth and a steady holding time and value among users.
November stood out as a month of recovery following a period of lean profitability. According to CoinDCX, more than 40% of traders turned a profit that month, a trend reminiscent of the market stability observed in the second quarter of 2022.
Market watchers also noted an increase in unique active wallets and trading volumes. Some sources pegged the trading volume escalation at 125%, which observers considered a manifestation of collective investor confidence and echoed the positive outlook prevalent in the broader crypto market in November.
Concurrently, the holding period for NFTs saw a steep decline, from an average of 100 days in October to just 18 days in November. Analysts saw this as indicating a shift in strategy towards short-term holding, which may have reflected readiness among NFT traders to exploit shorter market cycles.
However, the positive outlook did not stop average NFT prices from dipping by about 42% in Q4 2023 to settle around the $150 mark.
NFT market research
NFT market research by TechNavio revealed that the collectible token sector is poised to grow off the back of rising global demand and the digital transformation of various industries.
According to the firm, increasing internet and mobile usage has prompted companies to extend their digital asset offerings and investments.
On a regional scale, the survey projected the Asia-Pacific region to contribute as much as 39% of the global NFT market cap. This is underpinned by increased demand for non-fungible tokens in countries like Singapore, South Korea, the Philippines, Japan, and China.
Furthermore, the research revealed that the NFT market size is bolstered by expansion into art and fashion sales in retail outlets, exemplified by partnerships like CJ OliveNetworks and Galaxia Metaverse.
Another market survey carried out by NFT data provider NFTGo determined that the mean assets per investor for individual NFT projects were $3,893, while the median value stood at $1,459.
The marked discrepancy between the two figures, with the average exceeding the median by 63%, suggested that assets held by wealthier investors significantly inflated the mean per capita assets, further widening the wealth gap among participants in different projects.
A closer look at NFTGo’s data revealed that although the year was marked by selling, significant purchases were also observed, especially for top-tier NFTs like CryptoPunks, which traded at an average price of 67.05 ETH.
NFT market value in 2023
Expert predictions had the U.S. NFT market, valued at about $22 billion at once, growing at a compound annual growth rate (CAGR) of more than 34% between 2023 and 2030.
U.S. NFT market projection | Source: Grand View Research
However, as previously stated, the NFT marketplace growth in 2023 saw a significant decline, with transaction volumes slumping to $4.7 billion, starkly contrasting the $12.6 billion volume recorded in the same period in 2022.
With the public losing interest in NFTs, leading marketplaces such as OpenSea witnessed significant drops in deal values between December 2021 and December 2022, and this trend was mirrored across several other platforms as well.
OpenSea’s monthly active user base stood at around 250,000, with the platform observing a remarkable 450% surge in unique NFT buyers between 2020 and 2021. This spike saw the monthly buyer volume soar from 10,000 to 40,000.
However, Q1 2023 marked a low number of NFT holders, possibly traced back to the royalty wrangling between Blur and OpenSea.
Interestingly, up until 2022, there were more buyers than sellers in the NFT market, with a ratio of 1.3 to 1. By 2023, however, there was a shift in the market graph, with sellers outnumbering buyers, signaling a potential change in market behavior and possibly marking the beginning of the NFT market’s second major cycle.
NFT trend analysis
The emergence of several trends marked the 2023 NFT market. Top among them was the reshuffling of major blue-chip NFT projects. Despite initially being profitable, many of these projects started steadily declining due to the bear market that gripped the broader crypto sector in late 2022 and early 2023.
Leading projects such as Bored Ape Yacht Club (BAYC) stood firm against the prevailing bear wave, while others like Azuki struggled initially but later bounced back. In contrast, smaller projects such as Moonbirds took a hit on their profitability immediately after launch and have yet to recover.
2023 also saw what analysts considered a significant evolution in the behavior and profitability of NFT traders. They observed a shift in NFT ownership, with prominent investors increasingly dominating the market. For instance, according to NFTGo, projects like Azuki saw the number of whale owners double.
The next highest whale owner increase was observed in Moonbirds, whose general ownership dropped by 1%, but the number of whales increased by 41%.
Doodles and CLONE X each registered 24% increases in the number of large investors, while CryptoPunks stood at 22%. Among the top NFT projects, BAYC reported the lowest increase in whales at 18%.
Due to their substantial holdings and influence, many felt whales were pivotal in steering NFT market trends in 2023.
Another trend noted in 2023 was the need for more sustainable demand for new NFTs. While projects such as HV-MTL, Otherdeed Expanded, and Otherside Vessel performed steadily, others, like Nakamigos and Checks-VV, needed to sustain early strong momentums.
Another interesting tidbit gleaned from statistics collected by DappRadar was how blockchain games remained the top NFT category, with trading volumes led by Axie Infinity. The game’s NFT collection was the most traded, hitting a market cap of $224 million at one point. Other popular web3 games included NBA Top Shot, Mythical Beings, Gods Unchained, and NFL All Day.
However, at the same time, the market saw floor prices for top NFTs and metaverse land falling significantly. At one point, BAYC floor prices were as low as 24.8 ETH, a stark drop from their 152 ETH peak in Q2 2022.
In December, the NFT market recovered slightly, with Mutant Ape Yacht Club leading the list.
Leading NFT collections | Source: DappRadar
Finally, experts have attributed the NFT market’s growing visibility to the increasing interest of mainstream brands, including Visa and Budweiser. Such firms have strategically acquired existing NFTs instead of generating their own.
The appeal of NFTs to these big brands stems from the potential for additional revenue streams. Moreover, the adoption of NFTs as customer rewards is becoming increasingly prevalent, with such dynamics expected to generate a positive effect across the NFT market and propel its growth trajectory in the new year.
NFT market forecast for 2024
Despite the troubles encountered by NFTs in 2023, many analysts remain bullish about the technology’s prospects heading into 2024.
Here are some key developments they expect to happen that may change the trajectory of NFTs:
NFTs evolving beyond collectibles
Going into 2024, many anticipate a shift in the NFT landscape as it moves from collectibles to utility-driven digital assets. Tokens with real-world applications could mark a crucial change in the NFT paradigm, with such tokens serving as conduits between the digital and physical worlds, offering value beyond artistic appreciation.
GameFi
Analysts also expect the integration of NFTs will change gamification, enabling actual ownership of in-game assets and incentivizing players with rewards for engagement.
Regulatory clarity
The enhancement of crypto regulatory frameworks in the coming year is expected to coincide with the maturation of the NFT crypto market.
Regulators worldwide are developing guidelines to ensure a more secure and transparent environment to build trust and market stability. This could offer a safe environment for NFT creators, traders, and investors to pursue their respective activities.
Integration with defi
There have also been suggestions that NFTs could merge with decentralized finance protocols in 2024, a step many consider revolutionary as it would allow for tokenizing real-world assets as NFTs and connecting traditional finance with crypto.
It could give NFT crypto holders the option to leverage their tokens as collateral for loans or to generate interest via defi platforms, thus representing a considerable leap towards financial inclusivity and asset monetization.
Cross-platform interoperability
Proponents are also banking on improved interoperability between networks such as Cosmos and Polkadot (DOT) to transform the NFT market.
Enabling users to move non-fungible tokens across different blockchains smoothly could expand opportunities for creators and collectors and further reinforce the integration of the digital asset ecosystem.
AI-powered NFTs
Hope is rife in the NFT space that artificial intelligence will personalize the NFT crypto experience, offering tailored engagement, unique creations, and new use cases for the tokens in 2024.
Growth projections
TechNavio’s analysis anticipated the NFT market size to expand at a CAGR of 30.28 between 2024 and 2028 and eventually hit at least $68 billion. The firm’s researchers pegged their optimism on several key drivers, such as escalating interest in digital art and growing use cases for NFTs, including those listed above.
In 2024, TechNavio’s prediction outlined a year-over-year growth in the NFT market cap of at least 23.27%.
Regarding geographical regions, North America and Europe have been at the forefront of NFT adoption. However, statistics collated by Metav.rs looking at NFT consumer behavior showed that Singaporeans, Chinese, and Venezuelans were the most active NFT traders in 2023. Nigeria showed promising potential for future growth, possibly ranging from 13.7% to 35.3%.
Additionally, the Metav.rs figures revealed women in Thailand showed a higher interest in NFTs, with 30% collecting them compared to 23% of men. Notably, 70% of Americans were unaware of what NFTs are, while in France, 3.5% of the population have purchased NFTs, and almost half of the French youth aged 18-24 are open to buying NFTs.
These potential areas of growth come with caveats, regulation being one of them. As governments worldwide take a keener interest in the crypto space, industry watchers expect to see more rules and regulations that could impact NFT markets as well.
FAQs
How big is the NFT market?
The global non-fungible token market size was valued at $20.44 billion in 2022.
How much is the NFT market worth?
The NFT market is expected to grow at a compound annual growth rate (CAGR) of 34.2% from 2023 to 2030.
Is the NFT market growing?
Yes, the NFT market is growing, driven by the distinctiveness, transparency, and security of NFTs, as well as the increasing interest in digital ownership.
What are the key factors driving the growth of the NFTs market?
The growth of the NFT market can be attributed to the rise of social media and digital platforms, the adoption of blockchain technology, and the convergence of traditional industries with the NFT market.
Blur, a decentralized non-fungible token (NFT) marketplace, and OpenSea competitor is under pressure, tumbling by over 30% from its November peaks. While BLUR retreats, on-chain data reveals that BLUR whales have been moving their tokens to leading crypto exchanges, possibly to liquidate.
Whales On A Possible Selling Spree
According to Lookonchain data on December 7, several whales have been offloading large amounts of BLUR. To illustrate, 16.85 million BLUR, worth roughly $8.43 million, were deposited to exchanges in the past 24 hours.
Notably, one whale deposited 2.54 million BLUR, worth $1.26 million, received from the airdrop to Binance. At the same time, Mandala Capital transferred 2.76 million BLUR, worth $1.4 million, to OKX.
Mandala Capital sends BLUR to OKX | Source: Lookonchain via X
The deluge continued as another whale, only marked by the associated “0x68b5” address, withdrew 3.31 million BLUR worth $1.79 million from Binance between November 25 and 29 before moving them to the same exchange on December 1. The token had fallen, meaning the whale was down by roughly $65,000.
It is unclear whether the same addresses are sold for USDT or other tokens. However, what’s known is that any whale transfers to a centralized exchange is associated with liquidation. Accordingly, sentiment is impacted when whales move coins in large batches to exchanges, and retailers could interpret their transfers as incoming selling pressure.
BLUR Is Up 220% From October Lows
Thus far, looking at price action, buyers have the lead from a top-down preview. The coin is already up 220% from October lows. Most importantly, buyers have the upper hand, looking at the candlestick arrangement in the daily chart.
Even though the token is down 30% from November peaks, the failure of bears to force the coin below the 20-day moving average (MA) in the daily chart suggests that the uptrend is still valid. Losses below $0.46, or the base of the current bull flag, might trigger a sell-off. Conversely, any upswing above $0.58 and even $0.69–or November highs, could drive more demand, lifting BLUR to $0.84 or higher in the coming sessions.
Whether the uptrend will resume also remains to be seen. What’s clear, though, is that the broader community is closely monitoring the NFT scene and Blur, the marketplace. The recent upswing was due to the activation of Season 2 Airdrop, which ended on November 20.
Ahead of this, the token was already up 150%, only to extend gains briefly before cooling off in the first week of December.
In a Nov. 14 post on X from WuBlockchain, it was confirmed that several community users had reported they received phishing emails from an “Opensea official.”
As part of these emails, users were being offered NFTs.
Plenty of phish in the sea
Recently, a large number of community users have reported that they have recently received phishing emails disguised as Opensea official, with content such as NFT Offers. OpenSea has stated before that user emails and even developer API keys may be leaked because the supplier is… pic.twitter.com/koVH9o6OKG
OpenSea has stated before that user emails and even developer API keys may be leaked because the supplier is attacked.
At the same time, OpenSea issued a post on Nov. 13 stating that “There’s no hack.” and going on to warn users not to click links they don’t trust. That said, X now contains thousands of tweets about the alleged hacking.
A large target
There’s no hack. DO NOT click links you don’t trust.
The news follows the announcement from OpenSea’s co-founder and CEO, Devin Finzer, announced job cuts on Nov. 3.
According to Finzer’s post, the decision to implement these cuts stemmed from a comprehensive reassessment of OpenSea’s “operating culture, product, and tech from the ground up.”
This strategic realignment is a pivotal step within the framework of “OpenSea 2.0” as the prominent digital collectible trading platform endeavors to fortify its position. However, the news has since been overshadowed with skepticism about the alleged phishing scam.
Ethereum’s oldest NFT marketplace is downsizing its workforce as part of a “2.0 strategy” focused on community, product, and reliability.
Devin Finzer, OpenSea co-founder and CEO, disclosed job cuts on Nov. 3 via a thread on X, formerly Twitter. Finzer’s post explained that the decision was necessitated by a rethink of OpenSea’s “operating culture, product, and tech from the ground up”.
The move is part of “OpenSea 2.0” as the digital collectible trading hub moves to expand its dominance within the non-fungible token (NFT) market. Around half of the workforce were reportedly impacted by the decision.
We will change how we operate – shifting to a smaller team with a direct connection to users. So today, we’re saying goodbye to a number of OpenSea teammates. This is the most difficult part of this change. These folks played a key role in getting us to this point and I’m incredibly thankful for their contributions.
Devin Finzer, OpenSea CEO and founder
1/9 OpenSea is making some big changes today to focus on the next version of our product.
Finzer’s address finished with salutes for departed OpenSea staffers. “Others would be lucky to hire them.” said the CEO.
The news came hours after OpenSea unveiled its pro version on L2 network Polygon and announced support for cross-chain swaps, allowing NFT participants to tap a multichain experience from a single platform.
Updates from OpenSea follow a turbulent period after former head of product Nathanial Christain was convicted of insider trading under fraud and money laundering charges.
Bluechip NFT authorities like Bored Ape Yacht Club and creators like Yuga Labs considered listing their blockchain collectible on other platforms roughly two months after OpenSea deactivated its royalty enforcement system.
The label sells out 5,555 passes in 7 minutes. First drop from Diddy & JasonMartin exclusively to pass holders.
Press Release –
Oct 26, 2022
LOS ANGELES, October 26, 2022 (Newswire.com)
– Jeremy Fall, former celebrity restaurateur turned Web3 creator of Probably Nothing, announces the launch of Probably A Label, a Web3 major record label in collaboration with Warner Records.
Probably A Label believes music best comes alive when there’s context people can connect to emotionally. They are creators that help artists rewrite those stories using the power of NFTs and believe Web3 allows artists to create with more freedom and connect with fans on a much deeper level — their mission is to live at the intersection of that culture.
This new type of record label is aimed at redefining IP ownership in the music industry, utilizing Web3 technology. It is the first time that a major label joins forces with a leading NFT culture brand to build an ecosystem that enables artists to create freely using new technologies. Their mission is not to redefine how people listen to music but to elevate the experience in which people consume it, as well as collaborate directly with artists in a manner that helps develop their creative language.
The label launched 5,555 passes that exemplify its vision of what the future of music looks like, which sold out in seven minutes. These debuted on OpenSea, following last week’s announcement of the partnership with Warner Music Group. Their first music drop will be from Grammy Award-winner Diddy and JasonMartin, claimable for Probably A Label holders. While artists will use the Web3 label as a new platform to release music for holders, the community will capitalize on “Studio A,” an incubator that will help community IP come to life. Studio A shines as a key feature where the label partners with select members, accepting pitches for any ideas specific to that project’s IP. If someone owns IP from an approved project and has an idea for a concept around it, Probably A Label can help bring it to life utilizing their resources.
Studio A will begin by accepting pitches using NFTs from approved partner projects, including Azuki, BAYC, Clone X, Cryptopunks, Degen Toonz, Doodles, Photosynthesis, Project Gojira, Pudgy Penguins, Stickmen Toys, Women & Weapons and World of Women, with more partners to be announced soon. Projects accepted into this incubator program will have access to resources from Probably A Label, Probably Nothing, and Warner Records’ ecosystems, including financing, marketing, creative development, partnerships, branding, and PR. Probably A Label sees itself as the bridge between music in Web2 and Web3, which simultaneously evolves the connection between the traditional record label model and music fans.
Other features include the ability to own a community-created NFT project that will serve as the label’s initial virtual musician. This project will be built in conjunction with the community of holders through a voting system on design, storyline, and other creative. More features include exclusive access to the label’s future drops, a community-driven music library for holders’ use, educational content highlighting best IP execution practices, access to in-person and virtual events, merchandise, and more.
“I grew up in the ’90s listening to so many artists on Warner Records. It’s surreal to have it come full circle and help them redefine how people experience music in today’s Web3 era,” said Jeremy Fall, creator of Probably Nothing. “There are a lot of conversations to be had around IP ownership and how to best utilize that IP. What attracted me the most about Warner Records is that they wanted to enter the NFT space the right way by offering full IP rights for Stickmen Toys, which we ended up partnering on.”
The collaboration with Probably Nothing and Warner Records started with Stickmen Toys. Probably Nothing helped Warner Records enter the Web3 space by providing the bridge from Web2 to Web3. Stickmen Toys is a collection of 5,000 unique, audio-visual avatars, giving collectors creative and commercial freedom to push boundaries with their ownership of the copyright.
Sebastian Simone, Vice President of Audience & Strategy at Warner Records, said, “Jeremy and the Probably Nothing team share our vision of evolving the connection between labels, their artists, and fan communities. We’re excited to be partnering with Probably A Label on developing what the future of music ownership looks like, collaborating with our communities on bringing IP to life, and working with artists to enter the Web3 space in a meaningful, authentic way.”
For more information about Probably A Label, watch/visit:
ABOUT WARNER RECORDS:
Warner Records has stood as a beacon of artistic freedom and creative expression for the past six decades, releasing some of the most culturally influential and innovative music of our time and home to an impressive generation of artists, including Dua Lipa, Madonna, Saweetie, Liam Gallagher, Michael Bublé, Deftones, Neil Young, Red Hot Chili Peppers, Aespa, Bella Poarch, Muse, Linkin Park, Royal Blood, Gorillaz, Rüfüs Du Sol and many more.
ABOUT PROBABLY NOTHING:
Probably Nothing’s goal is to educate the world about NFTs and Web3 by onboarding as many people into the space as possible — by guiding them on safety and showing them how beautiful the community is. They help shine the light on projects that are paving the way creatively in a respectful manner to the Web3 industry. Probably Nothing is a community for the Web3 curious, the lovers of culture, creatives, and jpeg enthusiasts. It’s a hangout where the outliers run the show, a gathering place for everyone who wants to help push this new world forward and be part of the family.
Fireblocks’ cofounders (from left to right): Idan Ofrat, CTO; Michael Shaulov CEO; Pavel Berengoltz, VP of R&D
Fireblocks
Blockchain infrastructure provider Fireblocks has launched a suite of developer tools and a portal for customers to access cryptocurrency exchanges, NFT marketplaces and other decentralized applications across multiple networks.
Revealed exclusively to Forbes, the features are part of the company’s new offering called Web3 engine, which also includes custody services, treasury management, risk mitigation tools and a tokenization mechanism for managing the whitelisting, minting, burning and transfer of NFTs. Additionally, it gives institutions access to platforms like OpenSea, Rarible, Uniswap and dYdX directly from the Fireblocks console.
The company has already onboarded a few high-profile clients for the service. Among them are Animoca Brands, Stardust, MoonPay, Xternity Games, Griffin Gaming, Wirex, Celsius and Utopian Game Labs.
“The goal is to essentially bring all the security arsenal and capabilities that we’ve built for empowering financial firms to operate with crypto to this new group of players,” says Michael Shaulov, Fireblocks’ CEO and cofounder.
The New York-based startup is serving about 1,200 institutions including exchanges, banks, lending and trading desks and hedge funds helping them move, store and issue cryptocurrencies. Fireblocks claims it has secured the transfer of over $2.5 trillion in digital assets.
But the scope of its services has been increasingly expanding beyond institutional-grade custody. Last month, the firm partnered with FIS, a publicly-traded $62 billion fintech company that offers everything from payments services to wealth management, to provide FIS’ 6,000+ capital markets clients access to a full suite of crypto trading and lending services.
Around the same time, as part of its early access program to the Web3 engine, Fireblocks added support for decentralized finance applications (dapps) on the Terra blockchain. The network underpins the troubled stablecoin TerraUSD (UST) and its sister token LUNA, both of which collapsed to nearly $0 last week.
According to Shaulov, in less than a month Fireblocks’ customers had transferred around $3 billion in volume across the platform interacting with Terra’s popular dapps such as lending protocol Anchor, staking platform Lido and peer-to-peer exchange Astroport. But once UST, designed to always be worth $1, lost its peg, Fireblocks saw mainly “transactional activity that was speculative in nature as people were trying to hedge or take advantage of the situation,” says Shaulov. He highlights that ultimately Terra is only one of the 35+ networks Fireblocks’ Web3 engine supports (others include popular networks like Ethereum, Solana and Avalanche): “the goal of this offering is to provide cross-blockchain support.”
The engine is the latest product providing users with gateways to easily interact with the $90 billion DeFi industry. Yesterday, cryptocurrency exchange Coinbase introduced a similar capability for its retail users, enabling them to access Ethereum-based applications directly from the Coinbase app. This includes buying NFTs on marketplaces like Coinbase NFT and OpenSea, trading on decentralized exchanges like Uniswap and Sushiswap, and borrowing and lending through DeFi platforms like Curve and Compound.
Editor’s note: the story was updated to reflect Utopian Game Labs as one of Fireblocks’ clients, not Utopian Labs as was previously stated in the press release.
Twitter cofounder Jack Dorsey created an NFT out of his first-ever tweet, which sold for $2.9 million a year ago. In an auction this past week, the highest bid was just $280.
Getty Images
In December 2020, Jack Dorsey created a non-fungible token (NFT) out of his first-ever Twitter post. He turned a static image of a five-word tweet into a digital file stored on a blockchain, and voila, an NFT was born. A few months later, the image sold for a stunning $2.9 million. Yet in an auction this past week, no one bid more than $280 for it. And even current bids on OpenSea only amount to about $10,000, a 99% drop in value. What happened?
Dorsey’s NFT initially garnered little interest, with some people bidding a few thousand dollars in December 2020—a time when NFTs still had few believers. But in March 2021, the market entered hype mode, with monthly sales on OpenSea jumping to nearly $150 million, up from just $8 million two months prior. Iranian crypto entrepreneur Sina Estavi got swept up in the frenzy, buying Dorsey’s NFT for $2.9 million. He tells Forbes he paid such a hefty sum due to the NFT’s uniqueness and association with such a valuable company as Twitter.
While you could argue that Dorsey’s first-tweet NFT has historical significance, the $2.9 million price tag is nearly impossible to justify. The bubble price Estavi paid epitomizes the greater fool theory at work. “What is the utility of that NFT? Does Jack Dorsey take you out to dinner in Silicon Valley?” says Mitch Lacsamana, an NFT collector and head of marketing for an NFT trading group. “What is the real value proposition here? I think time has probably told us, and it’s probably nothing.”
On April 5, Estavi put the NFT up for auction for 14,969 ether, or about $50 million. Embarrassingly, no one bid more than $280. Estavi says “no one knows” why the bids came in so low. It seems that few people took it seriously. “Bidders just realized what it was–a publicity stunt. A way to get exposure,” says Blake Moser, an NFT collector who has nearly 400 NFTs. “I do think Sina Estavi accomplished what he was looking for–exposure to his NFT.”
Sina Estavi in his office in Malaysia.
Sina Estavi
Estavi has indeed gotten attention, but he seems severely out of touch with the rapidly changing NFT market. “The market isn’t ready to jump into literally anything that a celebrity or someone of high stature might release,” Lacsamana says. “I think last year was a really good time for that, but a lot of people have grown weary of cash-grab tactics.”
While the failed auction shows that NFT hype has waned, the market is still very active, with trading volume hovering around $2 to $3 billion a month on OpenSea, up from $150 million a year ago. Prices for some NFT collections like the Bored Ape Yacht Club remain near all-time highs.
Estavi’s NFT saga seems to be a case of an ill-advised $2.9 million purchase, buyer’s remorse and a new bid for attention. Estavi himself has a sketchy history. His startup, Oracle Bridge, says it will allow blockchain platforms to ingest data more easily, but today it seems to be little more than a white paper. Estavi also claims he was arrested last year in Iran and had to shut down the company for nine months while he was in prison. “They accused me of disrupting the economic system,” he says vaguely. Now he’s trying to start the company up again.
Over the past day, bids for the Dorsey tweet NFT have risen to about $10,000. Estavi says he won’t sell for anything less than $50 million.
The record-breaking NFT sale by Beeple in 2021 Q1 re-ignited market interest in NFTs after the initial foundation was laid out by the Cryptokitties project back in 2017. This was followed up by NFT projects like CryptoPunks and Board Ape Yacht club that soared in prices in a very short period of time. The sudden spike in market sentiment for NFTs made many investors millionaires overnight. That said, amidst all this excitement, NFT investors can easily fall victim to many tax pitfalls due to ambiguous tax guidance and lack of education on how to manage NFT taxes correctly.
Key Concepts
What are NFTs?
Non-fungible tokens (NFTs) are digital representations of assets — artwork, domain names, music, characters in games — created in limited quantities to maintain scarcity. Each NFT is unique and therefore not interchangeable with another in a similar manner to fungible digital assets such as bitcoin or ether.
For example, CryptoPunks is a collection of a thousand unique pixelated avatars with different facial features and characteristics. Since each character is unique, CryptoPunk #4835 is not interchangeable with CryptoPunk #5801.
You can buy and sell NFTs in dedicated marketplaces such as OpenSea, SuperRare and Nifty Gateway, among others. Additionally crypto exchanges like Binance, Coinbase, or FTX have announced or launched NFT platforms.
Tax Treatment of NFTs
How taxes work for NFT investors
NFT investors are individuals who buy and sell NFTs in marketplaces like OpenSea.They are subject to a similar set of tax rules (with some tweaks) as cryptocurrency investors.
How the IRS treats NFTs
Although the IRS has not issued any NFT specific tax guidance, most art-based NFTs such as CryptoPunks are likely classified as collectibles under the IRS § 408(m)(2)(A)). This tax classification is important to note because it subjects NFT gains to a slightly higher tax rate than regular cryptocurrency in some cases. Note that fractionalized NFTs will still preserve the same underlying tax classification.
When do Investors have to worry about NFT Taxes?
First, purchasing an NFT using a cryptocurrency like ether (ETH) triggers a taxable event. This is because you are disposing of a property to buy an NFT. For example, Sam spent 1 ETH to purchase a CryptoPunk valued at $5,000. Sam paid $100 to buy this ETH few years ago. Sam will have a $4,900 ($5,000 – $100) long term capital gain at the time he spends the ETH to buy the CryptoPunk. $5,000 will be his cost basis for the NFT.
Second, cashing out an NFT or trading one NFT for another also trigger capital gains tax events for investors. If Sam were to sell his CryptoPunk for 2 ETH valued at $12,000, he’d Incur a capital gain of $7,000 ($12,000 – $5,000)
Third, some NFTs also pay you royalties each time a subsequent sale occurs. In this case, royalties paid in cryptocurrencies are taxed when earned.
NFT Tax Pitfalls
You could owe NFT taxes without ever receiving cash
There are three situations where you could owe NFT taxes without ever receiving any cash in hand. These include purchasing an NFT using a cryptocurrency, trading one NFT with another and earning royalties in cryptocurrency. Unfortunately, most NFT holders are not aware of these rules. This could result in large and surprising bills come tax day, which you may not have the cash to pay.
You could incur penalties for not paying taxes on time
If you generated large amounts of profits from NFTs, you could have a quarterly tax obligation in 2021 for the first time. You may be unaware of this leading to underpayment penalties. To avoid getting penalized, you should consult with a tax professional to figure out your quarterly tax obligation or see if you qualify for a safe harbor.
At high-income levels, NFT gains could be subject to higher tax rates than you anticipated
A short-term capital gain occurs when you sell an asset after holding it for less than 12 months. If you are somebody who rode the NFT wave in 2021, most of your gains will be short-term. Short-term gains on NFTs can be subject to the maximum 37% If you are in the highest tax bracket. Also, be prepared to pay an additional 3.8% Net Investment Income tax if you exceed the applicable income thresholds for the year.
A long-term capital gain occurs when you sell an asset after holding It for more than 12 months. Generally, tax law favors long-term capital gains by subjecting them to a lower tax rate than short-term capital gains. The maximum long-term capital gains tax rate is 20% for stocks and cryptocurrencies (plus the 3.8% NII tax when applicable). Unfortunately, since NFTs are classified as collectibles, long-term NFT gains are subject to a maximum rate of 28% for high income earners.
Calculating NFT gains & losses is difficult
Currently, NFT marketplaces do not provide you with any tax documents nor any transaction history reports to figure out your NFT capital gains and losses. So, it is your responsibility to keep detailed records, figure out the correct cost basis & market values and accurately file taxes.
In the cryptocurrency world, there is tax software which helps you automatically reconcile capital gains & losses by connecting to your wallets and exchanges. However, when it comes to NFTs, the software support is at its infancy causing you to have to manually calculate taxes in some cases.
NFT Valuation concerns
NFTs are not like cryptocurrencies where you can actively see fair market values on websites like CoinGecko or Coinmarketcap. Therefore, if you trade one NFT with another, you will have to appraise the value of the receiving NFT to compute the accurate taxable gain or loss. Appraisal could become a big issue especially when the transaction amount is significant. Again, it is your responsibility to identify these events and seek professional help to accurately figure out your NFT taxes.
Next Steps
· Reconcile your NFT capital gains and losses.
· Consult with a qualified tax adviser and calculate your projected tax obligation for 2021.
· Determine If you are required to pay taxes quarterly or meet the safe harbor for 2021.
· If needed, liquidate some NFT’s and/or other cryptocurrencies into cash to cover the upcoming tax bill
