Ordinals trading volume has dropped by 97%? A look at the three major errors in the DappRadar report

Written by: trevor.btc

Compiled by: Luffy, Foresight News

Recently, the author from DappRadar, @the_LeticiaMelo, published a popular article stating that Ordinals' trading volume has decreased by 97% since May, but this data is inaccurate.

This article was subsequently reposted by Brian Quarmby from Cointelegraph, further exacerbating the spread of misinformation.

For those who are not well-informed, you might think that DappRadar conducted in-depth research. However, this is not the first time DappRadar has made mistakes. I remember when DappRadar launched the Stacks integration in 2022, they released a major announcement, but all the data was incorrect. They launched a dashboard ranking applications based on TVL, active users, etc., but none of the data was accurate.

Unfortunately, this article about Ordinals is another example of DappRadar publishing misinformation.

Where did DappRadar go wrong?

1. Incorrect Trading Volume Data

DappRadar claims that the trading volume for Ordinals in May was $452 million, and in July it was $35 million. Is it true that July's volume decreased by 92% compared to May? No.

According to @cryptoslamio data, the trading volume for Ordinals in May was $195 million, and in July it was $65 million.

I know, there is still a significant decline of 66%, but the story it tells is completely different from DappRadar's.

Let's look at another set of data. The Ordinals Marketplaces Dune dashboard from @domodata shows that the sales for Ordinals in May were $155 million, and in July they were $50 million. This is almost the same as the 68% decline shown by CryptoSlam.

There is no doubt that the market is declining after a hype cycle, but as you can see, DappRadar's data on the extent of the decline is inaccurate.

Math geeks know that a 92% decline is more severe than first declining by 67% and then declining by another 67%.

So DappRadar's data is not only inaccurate but also highly misleading.

2. No Mention of BRC-20

DappRadar's article did not mention BRC-20.

According to Dune's data, 74% of the sales in May came from BRC-20, which I believe is a significant oversight.

Why? The article compares the trading volume trends of BRC-20 + Bitcoin NFTs with the trading volume trends of Ethereum and Polygon NFTs. When writing about NFTs, irrelevant data should not be mixed.

3. Comparing ATHs of Hype Cycles with Mature Ecosystems Outside of Hype Cycles is Meaningless

To quote DappRadar author Leticia:

"Bitcoin Ordinals face a greater decline, which suggests concerns about the utility of its platform or its NFT products.

It is important to understand that while Bitcoin Ordinals have brought innovation, Ethereum and Polygon have a longer-standing reputation and broader applications in the NFT space, making them less susceptible to drastic market changes."

This raises the question: Did Ethereum NFT trading volume ever experience a significant decline within two months?

Yes, they too could not escape the fate of decline.

According to Dune analysis:

• From January to March 2023, Ethereum's NFT trading volume decreased by 49%
• From April to June 2023, Ethereum's NFT trading volume decreased by 77%

The decline in trading volume experienced by Ordinals is not uncommon in the hype cycle of NFTs. In fact, Ethereum's situation was worse in April 2023.

Remember, even Bitcoin fell from a high of $68,000 to a low of $16,000, a decline of 76%, although the timeframe for Bitcoin's decline was much longer.

Conclusive Thoughts

Did Ordinals accelerate the hype cycle? Absolutely.

Has the trading volume of Ordinals significantly decreased compared to its peak? Yes.

Can it decline further? Of course.

But so what?

The Ordinals market is no different from any other new asset in the field, and it is not different from what we see in other NFT ecosystems.

History tends to repeat itself in some sense. Many people know that a decline will eventually happen, but that does not change my belief in the technology or the future of the field.