According to a recent report by blockchain analytics platform Nansen, the bulk of ethereum (ETH) from primary non-fungible token (NFT) sales, 52.3 percent, continues to circulate among non-entity wallets, while a significant portion of money from primary sales is reinvested into NFTs.
According to the team at Cryptonews.com, entity wallets are wallets that Nansen has named and attributed to a specific entity (e.g., OpenSea, Rarible, etc.).
Non-entity wallets are those that Nansen hasn’t identified and attributed to any specific entity, which could be an individual wallet or even an entity that hasn’t been tagged yet.
The goal of the study was to find out what happens to the crypto that is spent on NFTs and how it influences the price of ETH.
According to the research, 17.7% of the ETH used to acquire NFT at main sales was poured back into NFT projects, including mints and marketplaces like OpenSea and Rarible.
According to Nansen, 10.4 percent of the cryptocurrency was used on decentralised exchanges as liquidity or for swaps, while 3.6 percent was placed on centralised exchanges.
After that, the study removes the ETH flow to non-entities and examines the ETH flow into the entity sector in further detail.
According to the paper, “almost 22% of this flow is returned to OpenSea, presumably to purchase more NFTs.”
Furthermore, in terms of centralised exchanges (CEX) deposits, Binance “tops the list,” accounting for 13.75 percent of the Ethereum flow to companies.
Uniswap (UNI), a major decentralised exchange, comes in second with 9%.
“Roughly 6% is used for CryptoPunk-related activity, potentially as capital for a purchase,” Nansen explained.
Nansen concludes that the NFT business is still plagued by profit-seeking tactics, with on-chain evidence of founders buying up the ground floor for some initiatives.
“Such behaviour could indicate that wash-trading is still going on. Nonetheless, the NFT community’s healthy distribution of minters and growing number of unique buyers indicates to true, organic growth. According to the research, “certain initiatives distinguish out by reinvesting primary sales proceeds into NFTs, under the authority of their own community.”
Nansen identifies 645 NFT projects in the principal NFT market, and estimates that roughly ETH 84,000 (now USD 261.77m) has been deposited into ERC-721 NFT contracts since June.
According to the paper, this is the primary’sales revenue’ accumulated from addresses that are the first to mint these NFTs. A total of ETH 75,000 (USD 233.72 million) has been transferred from these contracts. According to the data, 573 projects have sent ETH out, while 72 projects have yet to touch the currencies in their treasury.
Only 80 NFT projects with a main sales revenue of ETH 300 (USD 934,872) or more have been identified by the company, with a median revenue of ETH 10.2 (USD 934,872). (USD 31,786).
When it comes to secondary sales, Nansen believes that:
“We can see that secondary buyer interest in NFTs has begun to wane in August by plotting historical trading volume against the number of unique buyers since July.” Drops in Ethereum trading volume could indicate lower sales prices, while a drop in the number of unique NFT purchasers could indicate a lack of newcomers to the NFT industry.”
NFT trading, on the other hand, has seen a robust resurgence since its low point on August 19, according to the research.
