While the NFT market may look unsustainable, a look under the hood shows that the “drops” may keep rising.
As the non-fungible token (NFT) market continues to boil and new projects seem to sell out hourly, a report published this week from on-chain analytics firm Nansen sheds some light on the number of active NFT developers shipping projects on Ethereum – and, perhaps more importantly, what they’re doing with the ether they earn from “drops.”
The research might help to calm jitters concerning an impending bubble burst. Most market observers agree that the NFT segment has grown unsustainably frothy, and one worry among collectors is that many NFT drops are effectively leeching liquidity from the market as developers cash out.
Loon’s analysis focused on the 645 NFT projects that have been released since June – a remarkable average of over 7 drops a day for the past three months. These drops have taken in roughly 84,000 ETH, or over $271 million.
While over a quarter billion in under 90 days may initially seem like a staggering number, Loon notes that the majority of drops are relatively modest – the median NFT project rakes in 10.2 ETH, or $33,000.
The data may be somewhat messy in that Loon could not track if the developer ETH wallets were only spending ETH derived from sales, but “we can assume, however, that the percentage spending on each type of entity should be a representative measure of how they chose to spend their income,” he wrote.