According to new data, whales — large investors who have locked up the most accessible choices – possess the bulk of non-fungible tokens (NFTs), accounting for almost 80% of the market. According to data conducted by blockchain analytics platform Moonstream, individual investors contributed to less than 20% of the whole NFT market on Ethereum between April 1 and September 25, 2021.
NFTs are virtual collectibles that employ blockchain technology to track the ownership of virtual assets such as music, films, photos, or other digital files like in-game equipment or characters.
And, since one collection was auctioned for $69 million, or over Rs. 500 crore, NFTs have been one of the hottest assets in the crypto market this year. However, it’s somewhat unsurprising that the majority of the properties are concentrated among the wealthy.
Moonstream, a blockchain analytics platform, found transfer activity for 7,020,950 tokens from 9,292 Ethereum NFT contracts over 727,102 addresses after scanning 1,145,767 blocks. As the paper points out, these NFT mints and transfers are critical in establishing the Ethereum dataset’s core.
“Many of those owners are marketplaces and clearinghouses like OpenSea, Nifty Gateway, and other platforms of a similar ilk,” according to the research, which also listed some NFT whales on Ethereum.
While the current distribution structure of NFTs on the Ethereum network favors whale wallets, the paper points out that modest NFT investors are also present, contributing to the space’s growth.
The paper stated, “What this data indicates us is that the Ethereum NFT market is open in the sense that the vast majority of its participants are small-time consumers who likely make their purchases manually.”
The remaining 19.02 percent of NFTs available on the network are now owned by 83.29 percent of Ethereum fans.
The NFT space is flourishing in several regions of the world, thanks to personalities such as Amitabh Bachchan, Salman Khan, and Snoop Dogg, among others.
According to market tracker DappRadar, NFT sales volume increased to $10.7 billion (approximately Rs. 79,820 crores) in the third quarter of 2021. This value is eight times higher than the previous quarter’s level.
Many have been perplexed by the soaring sales and high prices of NFTs – products that do not exist in the actual world — but the multi-fold expansion shows no signs of slowing down.
Sales volumes on the largest NFT platform, OpenSea, reached $3.4 billion (approximately Rs. 25,320 crores) in August and remained high even when global stock markets sank in September.
NFTs, on the other hand, have some major environmental consequences.
Most NFTs, according to Chris Hinkle, chief technology officer of TRG Datacenters in the United States, are part of the Ethereum blockchain, which has been criticized for having a carbon footprint comparable to 140,893 Visa credit card transactions in a single transaction.
“By early 2022, Ethereum has vowed to reduce its energy use by 99 percent. “As NFTs evolve and become more widespread, it’s vital that as they expand in popularity, they take efforts to protect our environment from additional detrimental influence,” Hinkle stated in a TRG Datacenters study on NFTs.