According to DappRadar, the entire value of the NFT ecosystem fell by 59.6% from $9.3 billion in 2017 to $3.7 billion in 2022.
DappRadar produced research on February 9th indicating that the Ethereum NFT market cap value declined by 59.60% from $9.3 billion in 2022 to roughly $3.7 billion in early 2023.
The report conducted by DappRadar is based on a market cap analysis of 81 of the largest NFT collections running on the Ethereum network.
2/ The market cap for 81 Ethereum collections analyzed by our machine-learning algorithm experienced a decrease of 59.60% in USD value, from $9.3B in the beginning of 2022 to $3.7B at the end of the year. 📉
— DappRadar (@DappRadar) February 9, 2023
According to DappRadar, the failure of Terra Luna in May 2022 was the primary reason of the 88% market value loss of Ethereum-based NFT projects by June 2022.
As a result, the reduction in the market cap of NFT projects was caused by bad players in the ecosystem rather than a lack of interest on the side of investors. This is most likely the primary cause of the larger collapse of the crypto sector, as the market cap of the whole NFT ecosystem plummeted alongside the global crypto market during the collapse of FTX.
According to the research, certain projects launched in 2021 and early 2022 experienced “substantial market cap rise” of up to 260%. The Azuki, Pudgy Penguins, and Degen Toonz collections were among those ventures, with market caps increasing by 113.89%, 260%, and 204%, respectively.
The Potatoz has a market cap growth of 134.68%, Renga has a market cap growth of 211.63%, DigiDaigaku has a market cap growth of 209.88%, and God Hates NFT has a market cap growth of 1,653.28%.
It is worth noting that all of these projects have seen dramatic development despite the fact that ETH, the native currency of the Ethereum network, has had a 60% price decline owing to the bear market over the last year.
Despite the exponential decrease of other projects, Yuga Labs, the parent company of the Bored Ape Yacht Club project, dominated the Ethereum network’s NFT market, “establishing itself as a dominant player in the NFT business,” according to DappRadar.
Despite Yuga Labs’ collection representing for 67% of the total value of the Ethereum NFT market, Bored Ape Yacht Club’s market capitalization fell 64.92% from $2.6 billion to $934 million by the end of 2022.
However, Yuga Labs purchased two of the largest NFT collections on the market, CryptoPunks and Meebits, for an undisclosed sum. Both collections are already on the mend after experiencing up to 60% losses in 2022.
However, now that the crypto market is showing signs of recovery, the NFT ecosystem may be able to breathe a little easier. And we may be witnessing greener pastures ahead, as trade activity surrounding blue-chip collections has recently increased, and there are even NFTs taking over the Bitcoin network.
