Unbridled enthusiasm for Non-Fungible Tokens (NFTs) peaked between late 2021 and early 2022, promising to revolutionize finance, technology, creativity, and culture. Less than two years later, a report published by dappGambl has revealed that 95% of NFTs have no economic value. That is, some 23 million people own digital assets that are no longer worth anything.
The study focused on the NFT ecosystem on Ethereum, the most popular blockchain for these assets. A total of 73,257 collections were identified, of which 69,795 had a market valuation equivalent to 0 Ether (ETH). This translates into 79% of these assets remaining unsold.
From the beginning, NFTs had a great impact thanks to news of million-dollar sales of digital assets, such as the Bored Apes and CryptoPunks collections, which sold for astronomical figures. However, transaction volume fell drastically in August 2021, when they went from $2.8 billion to just $80 million in July 2023.
This change is partly attributed to the collapse of Bitcoin and Ethereum prices, which reached all-time highs during the NFT boom and then experienced a sharp decline. Another reason detailed in the report is the ecological issue related to the creation of these tokens, since each minting consumes a lot of energy, which mobilized environmental activists and damaged the reputation of this technology.
The study estimates that the creation of worthless NFTs has generated emissions equivalent to 16,243 metric tons of CO2, highlighting the need for greater responsibility in the industry.
As for the top NFT collections, the report shows that 18% have a minimum price of zero, 41% are in the range of $5 to $100, and less than 1% are priced above $6,000. . These statistics reflect the lack of perceived value in the NFT market, compared to the million-dollar deals that used to be common during the boom.
Despite the decline in popularity and market value of NFTs, some experts suggest they may still have a viable future. Evolution could take them beyond simple collectibles and turn them into historically relevant assets, authentic works of art, or items with genuine utility.
