Source: AdobeStock / GavrBY

The majority of Ethereum (ETH) from primary non-fungible token (NFT) sales continues to circulate in non-entity wallets at 52.3%, while a notable portion of primary sales revenue is reinvested in NFTs from the blockchain, according to a recent analysis -Analysis platform Nansen.

Entity wallets are wallets that Nansen has tagged and assigned to a specific entity (e.g. OpenSea, Rarible, etc.), said the team for Cryptonews.com.

Therefore, wallets without an entity are those that Nansen has not labeled and not associated with a specific entity – which means that a wallet without an entity can be a single wallet or even just one entity that has not yet been labeled.

The analysis should provide some insight into what is happening to the crypto that is being spent on NFTs and how this affects ETH prices.

A 17.7% stake of ETH used to purchase NFT on primary sales has been reinvested in NFT projects, including mints and marketplaces like OpenSea or Rarible, according to the report.

About 10.4% of the crypto was used on decentralized exchanges, either as liquidity or for swaps, while 3.6% of the ETH issued was deposited on centralized exchanges, Nansen said.

What Are NFT Projects Doing With Ethereum They Are Getting - Report 102Source: Nansen

The analysis continues to remove the ETH flow to non-entities and assess the ETH flow in the entity segment with greater depth.

“Almost 22% of that power is being returned to OpenSea, presumably to buy more NFTs,” the report said.

Additionally, the Binance crypto exchange tops the list for deposits on centralized exchanges (CEX), capturing 13.75% of the Ethereum flow to companies.

It is closely followed by the large decentralized exchange Uniswap (UNI) with 9%.

“Around 6% will also be used for CryptoPunk-related activities, possibly as capital for a purchase,” said Nansen.

What Are NFT Projects Doing With Ethereum They Are Getting - Report 103Source: Nansen

Nansen concludes that the NFT industry is still gripped by certain for-profit practices, with evidence found in the chain of founders buying up the land on some projects.

“Such behavior can indicate an ongoing laundry trade. Nevertheless, the healthy distribution of NFT miners and the increasing number of unique buyers indicate real, organic growth in the NFT community. Certain projects are also distinguished by the fact that they reinvest primary sales in NFTs, led by their own community, ”the report said.

Within the primary NFT market, Nansen has 645 NFT projects and estimates that around 84,000 ETH (currently $ 261.77 million) have been deposited in ERC 721 NFT contracts since last June.

This represents the primary “revenue” accumulated by addresses that are the first to mint these NFTs, the report said. Approximately 75,000 ETH ($ 233.72 million) were transferred from such contracts. The ETH has outsourced 573 projects, while 72 projects have not yet touched the coins in their treasury, according to the analysis.

However, the company has only identified 80 NFT projects that achieved primary sales of ETH 300 (USD 934,872) and above with median sales of ETH 10.2 (USD 31,786).

As for secondary sales, Nansen said:

“If you put the historical trading volume against the number of retail buyers since July, we can see that secondary buyers’ interest in NFTs waned in August. Declines in Ethereum trading volume, which could indicate lower sales prices, while the decline in the number of Unique NFT buyers may indicate a shortage of new entrants entering the NFT space. “

However, there has been a strong rebound in NFT trading since the August 19 low, the report concluded.

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