Interpretation of the NFT Industry in June: Market Stagnation, Azuki Plummets

Author: lesley@footprint.network

In June, although the crypto market saw a significant rise, with Bitcoin breaking through $30,000 and reaching a 12-month high, the NFT market failed to follow suit, with user activity and funding remaining relatively flat.

NFTs are no longer just digital collectibles; the attempts of numerous Web2 brands are gradually diversifying the application scenarios of NFTs. For example, Louis Vuitton launched a high-end "Treasure Trunk" NFT series priced at €39,000.

The anime-style Azuki launched a new series, Azuki Elementals, which faced criticism from the community, highlighting the importance of value creation and community participation for the success of NFT projects.

The data in this report comes from Footprint Analytics' NFT Research page. This page provides an easy-to-use data dashboard that includes the most critical data metrics to understand the NFT industry and is updated in real-time. You can (↓click to read the original text) find the latest information on the NFT market, individual projects, funding, and more.

Key Points

Crypto Market Overview

• In June 2023, Bitcoin experienced ups and downs, reaching a 12-month high of $31.2k on June 22. In the volatile crypto market, Bitcoin's price maintained a continuous upward trend.

• On June 22, Bitcoin unexpectedly broke through the $30,000 mark. By the end of June, Bitcoin's closing price was $30.4k, indicating that $30,000 has become a solid support point.

NFT Market Overview

• On June 27, trading volume reached $61.45 million, largely attributed to Azuki, with a single series trading volume reaching $20 million.

• NFTs are not only digital collectibles but can also help multiple industries achieve innovation.

Public Chains and NFT Trading Markets

• Ethereum continues to dominate the NFT market. In June, Ethereum's trading volume accounted for 97.7% of the total NFT trading volume.

• Although the BNB chain performed poorly in terms of trading volume, its wash trading ratio (42.14%) was the highest among all chains.

• Despite the launch of OpenSea Pro in April, data so far has not shown that its launch has significantly impacted Blur's dominance in trading volume.

NFT Investment and Financing Situation

• This month, the financing market in the NFT sector appeared relatively quiet, with only two significant financing events.

Hot Topic of the Month: Azuki Elementals

• By the end of the month, Azuki's minimum price had significantly dropped to 7 ETH, while the floor price of Azuki Elementals also fell below the minting cost of 2 ETH.

Key News

• The NFT artwork "Goose" sold for $6.2 million at Sotheby's auction.

• Louis Vuitton released limited edition NFTs for select clients, priced at €39,000.

• BAYC #2758 will star in a Hollywood movie.

• The Azuki team earned $38 million in sales in just 15 minutes.

• BYTE CITY pays tribute to Bruce Lee with an immersive metaverse experience.

Crypto Market Overview

In June 2023, Bitcoin experienced ups and downs, reaching a 12-month high of $31.2k on June 22. In the volatile crypto market, Bitcoin's price maintained a continuous upward trend.

BTC Price & ETH Price

At the beginning of June, the U.S. Securities and Exchange Commission (SEC) intensified its regulatory efforts, filing lawsuits against Binance and Coinbase, the two largest cryptocurrency exchanges globally. As a result of these regulatory actions, Bitcoin's price fell to $24.7k.

However, on June 22, Bitcoin broke through the $30,000 mark. By the end of June, Bitcoin's closing price was $30.4k, indicating that $30,000 has become a solid support point. This outstanding performance may have been driven by positive news in the cryptocurrency space, such as Blackrock's resubmission of its Bitcoin spot ETF application, which could have boosted market optimism.

The crypto market seems to be entering a consolidation phase, gradually better able to face regulatory trends and market turbulence.

NFT Market Overview

The NFT market is gradually cooling down, with a slight decrease in market capitalization to $35.86 billion.

NFT Market Cap & Volume

In terms of trading volume, the NFT market experienced some fluctuations in June. At the beginning of the month, the trading volume was $26.2 million, dropping to a low of $16.59 million by June 18, before rebounding to $35.86 million by the end of the month. On June 27, trading volume reached $61.45 million, largely attributed to Azuki, with a single series trading volume reaching $20 million.

NFT Volume by Collection on June 27

On June 28, the release of Azuki Elementals led to a significant increase in trading volume. However, due to issues with image quality, a large sell-off soon occurred, affecting community sentiment towards the Azuki series. On that day, the number of sellers for the Azuki series was twice that of buyers. This large-scale sell-off represented the market's reaction to the Azuki Elementals event.

Azuki Buyer & Seller

This surge in trading volume highlights the NFT market's sensitivity to news and developments. In this highly volatile market, it is crucial for investors to stay informed and exercise caution.

Daily Unique Users

In terms of active users, the NFT market remains relatively stable, with active users hovering around 30,000. However, in the long term, the number of active users has been steadily declining. Specifically, compared to the peak of 129.39k active users on January 27 of this year, current user activity is about a quarter of that peak.

Despite the slowdown in the secondary market, some companies are still exploring and expanding their possibilities in the NFT space. For example, Louis Vuitton launched a high-end "Treasure Chest" NFT series priced at €39,000, advancing the integration of luxury goods with digital collectibles.

A rendering from the Louis Vuitton digital Treasure Chest NFT collection

Additionally, Bored Ape Yacht Club #2758 will star in a Hollywood movie, showcasing the potential of NFTs in content creation and intellectual property.

NFTs are not only digital collectibles but can also help multiple industries achieve innovation. As more brands and industries experiment with and adopt NFTs, we can expect to see broader applications and use cases that go beyond traditional art and collectibles. This diversification of application scenarios could be a key driver of the next wave of growth in the NFT market.

Public Chains and NFT Trading Markets

Ethereum continues to dominate the NFT market. In June, Ethereum's trading volume accounted for 97.7% of the total NFT trading volume, solidifying its position as the preferred platform for NFT trading. This dominance is also on the rise, with Ethereum's market share slightly increasing each month according to 2023 data.

This trend indicates that users particularly rely on Ethereum for high-value transactions during bear markets. Ethereum's established reputation, security, and widely recognized technical capabilities are crucial for the operation of NFTs.

Monthly Volume by Chain

Over the past three months, Ethereum has not only maintained its dominant position in NFT trading but also gradually increased its proportion of unique users. Despite other public chains having the advantage of lower gas fees, most users still prefer to use Ethereum for NFT transactions.

Monthly Unique User by Chain

In terms of daily transaction counts, Ethereum remains far ahead, with Polygon and Solana following closely in second and third place, respectively. Ethereum accounts for 50.34% of the trading volume, Polygon for 28.38%, and Solana for 10.92%.

Although Ethereum still dominates, the high transaction counts on Polygon and Solana indicate that these platforms are also major competitors in the NFT space. Lower transaction fees and faster transaction times attract many smaller traders.

Daily Trades by Chain

In June, although the BNB chain performed poorly in terms of trading volume, its wash trading ratio (42.14%) was the highest among all chains.

Wash trading refers to traders simultaneously buying and selling the same asset to artificially inflate trading volume, which may mislead people about the market activity and liquidity of the BNB chain, thus affecting investment decisions. This month, specific projects like Pentas NFT, Alpaca Finance NFT, and Binance Regular NFT had wash trading rates exceeding 90%.

Top Washtrading Blockchains

In terms of trading volume, Blur has consistently dominated the market, accounting for nearly 70% of trading volume in June. The established NFT market OpenSea accounted for 22%, having launched OpenSea Pro in April, primarily targeting professional NFT traders. However, data so far has not shown that the launch of OpenSea Pro has significantly impacted Blur's dominance in trading volume.

Monthly Value by Marketplace

However, from the perspectives of transaction counts and user numbers, OpenSea continues to maintain its leading position with nearly 70% market share.

When we examine the NFT series with the highest trading volume on Opensea and Blur, Bored Ape Yacht Club (BAYC), we find a striking difference. The trading volume of BAYC on Blur is 24.6 times that on OpenSea, but the number of buyers is only 1.86 times that on OpenSea. This phenomenon indicates that although the trading volume on the Blur platform is very high, the number of independent buyers participating in these transactions is relatively small.

While Blur may be the preferred platform for high-value transactions, OpenSea remains the preferred platform for more users.

OpenSea & Blur Collections

Additionally, we observe that the trading volume on Blur is largely concentrated among a relatively small number of wallet addresses. More specifically, the trading volume of the top 300 wallet addresses accounts for 53.79% of Blur's total trading volume. In contrast, on the OpenSea platform, the top 300 wallets only contributed 17.04% of the trading volume.

This data indicates that on Blur, the trading volume of top buyers is much higher than on OpenSea, with relatively few high-volume buyers or investors driving most of the trading activity on Blur.

Volume v.s. Wallet Address

NFT Investment and Financing Situation

This month, the financing market in the NFT sector appeared relatively quiet, with only two significant financing events. Due to market uncertainty and regulatory issues, there has been a substantial decrease in financing activities, and investors are becoming more cautious.

On June 14, the AI-supported NFT data platform Mnemonic completed a $6 million seed extension round, led by Salesforce Ventures. The funds from this round will be used to expand their API suite.

At the same time, on June 28, the NFT-native options protocol Hook Protocol announced the completion of a $3 million seed round financing. This project allows traders to profit from the price increases of NFT collections while enabling NFT holders to earn royalties and sell their NFTs at satisfactory prices.

On June 28, the NFT-native options protocol platform Hook completed a $3 million seed round financing. This project creates opportunities for traders to profit from the price increases of NFT assets while allowing NFT holders to earn income from royalties and sell their NFTs at satisfactory prices.

Monthly NFT Projects Fundraising Amount & Times

Since January 2022, financing activities related to the NFT industry have been on a downward trend, with investment actions in June appearing particularly sluggish.

However, even in a bear market, developers and innovators remain active, including some large Web2 companies that are optimistic about the potential of NFTs and have integrated NFTs with their brands. Persisting in innovation and construction during market downturns reflects a strong belief in the potential of the NFT space, paving the way for the NFT industry to welcome the next round of opportunities.

Historical experience tells us that the market always has cyclical fluctuations. When the next bull market arrives, those developers and innovators who have persisted in building foundations during the bear market are likely to trigger a new wave of innovation and investment in the NFT space.

Hot Topic of the Month: Azuki Elementals

Azuki, a popular brand in the metaverse, is beloved by fans for its unique anime art style. However, the launch of the new series Azuki Elementals quickly turned community anticipation into disappointment and criticism due to excessive repetition of features.

Community members initially questioned the Elementals series due to its high similarity to previous Azuki NFTs. However, as more NFTs were unlocked, many holders were surprised to find that their Elements were identical to those of other holders. For community members hoping to see novel and innovative works, this was undoubtedly a blow.

Additionally, various issues during the minting process sparked many questions. For example, the whitelist minting window was only a brief ten minutes, and due to the time constraints, website traffic surged until it crashed. More seriously, there was no cap on the number of mints during the presale phase, allowing some individuals to mint Elementals without restrictions.

Azuki & Elemental Floor Price

By the end of the month, Azuki's minimum price had significantly dropped to 7 ETH, while the floor price of Azuki Elementals also fell below the minting cost of 2 ETH. The release of Elementals triggered a wave of sell-offs, leading to a sharp price decline and market sentiment hitting rock bottom.

The Azuki incident further highlights the importance of innovation and community in the NFT space. If a project is perceived to lack innovation or fairness, it can experience a rapid decline in market confidence and value, as seen with Azuki Elementals.