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Non Fungible Tokens; A Case Study

Introduction: NFTs are digital ownership certifications or virtual identification of intangible assets. NFTs provide a provable and unalterable chain of ownership and creation for assets such as music, artwork, games, and collectibles. NFTs are only virtual identification and do not represent an artwork or item entity (Denicola, 2022). They differ from Ethereum due to their non-interchangeability, uniqueness, and non-tampering nature.

Non Fungible Tokens (NFTs) case study, In 2014, Kevin McCoy, a digital artist, minted the first-known NFT. The NFT was characterized by the color-changing and pulsating attributes of an octopus. Two years later, as memes became popular, Rare Peeps NFTs emerged. Over the following three years, NFTs gained mainstream attention, with a set of standards formed, and the creation of tokens by developers becoming more prevalent.

Non Fungible Tokens (NFTs) case study

The NFT market exploded in 2021, generating over $22.3 billion in sales, with several companies such as Opensea and Sorare scoring over a billion-dollar valuation. This explosive growth is attributed to the increased crypto population, which is expected to reach one billion by the end of 2022, resulting in a ripple or flow-through effect when buying and selling NFTs.

Although NFTs are predominantly focused on the sale and ownership of artwork, other practical uses of NFTs are emerging in the marketplace. For example, the Holland and Knight law firm has included digital assets in its will process, terming them as personal assets. Blockchain and smart contracts have also been used in real estate contracts, movie releases, and crowdfunding.

While current research studies on NFTs focus on the protocols and techniques used to build, run, or distribute NFTs, other studies focus on the counter effect of NFTs on the environment and its sustainability, as well as the security aspect of NFTs. Studies have shown the various effects of anonymity, malicious trading, and security on the market’s growth.

Therefore, to better understand the market in general, this paper aims to create an empirical study across various collections and categories. Its focus is to understand the size, growth rate, procedures, portfolios of buyers and sellers, pricing levels, usage of analytical tools, and top buyers and sellers. With the analysis, a conclusion is drawn on the general position of the NFT market.

Virtual world3947754579198353
Trading cards2896288778789
Percentage growth30.4%3334.6%
Table 1: Opesea Sales per year

Table 1-

Table 1 shows the number of sales transacted by category and year on Opensea. The sales volume increased over the two years- growing by 30 percent in 2020 compared to 2019 and a remarkable 3,334 percent in 2021. Some categories grew by various folds in 2021/2022 compared to 2019/2021. For example, collectibles grew by 1001% in 2021 compared to 2019. The surge can be explained by pricing some of the most sought-after collections, such as Cryptopunks and Bored Ape Yacht Club, which sold for hundreds of thousands of dollars in the year (Crypto.Com, 2022).

A category like photography, which had its first year on Opensea, recorded a modest showing in its first year. However, the growth rate is yet to be estimated in the coming future to analyze if the category will maintain the pace.

Considering the entire NFT marketplace, the same trend is noticeable regarding sales volume. Artwork recorded a high growth rate in the period, the same as collectibles.

Figure 1 shows the total sales involving NFTs.

Figure1; Market capitalization of transactions of NFT from 2018 to 2020

The market capitalization of NFTs confirms the growth rate represented in the table above. The market capitalization shows a rapidly developing market that grew nearly tenfold between 2018 and 2021. However, analysts claim that the market’s volatility and newness make the market capitalization analysis conservative.

Table 2 shows the number of buyers and sellers in the NFT marketplace over the years.


The table above shows the buyers, sellers, and collections involved in the sales in Table 1. If we calculate the ratio of buyers to sellers each year, it is notable that the ratio remained relatively consistent in 2019 and 2020 – 1.17 and 1.31, respectively. However, in 2021, the ratio increased by nearly 50% to a 1.99 buyer-to-seller ratio.

According to the Nonfungible Corporation, the number of sellers increased more than the number of buyers in the past. The report states that the increased number of new entrants can explain the latter in the marketplace. However, with established categories and companies such as Opensea, the number of buyers is higher than the number of sellers. From 2020 to 2021, unique buyers increased by 3,471%, whereas sellers increased by 2,208% in Opensea.

Comparing yearly purchases, an average buyer would purchase approximately 5.5 NFTs per month in 2019. However, the number dropped to 4.5 in 2020 and 4.1 in 2021. The drop is attributed to the shift in the mix of categories of the NFTs purchased per year (Crypto.Com, 2022).

Sourcing compiled data of the general NFT population usage of analytical tools posed a challenge. Therefore, the research sampled data from a major NFT analytical tool and used the data to make a conservative conclusion. Nansen is a blockchain analytics platform that combines on-chain data with wallet labels to help its users make informed decisions.

Characterization Result:

4.1. Size

According to research, the Nonfungible Tokens (NFTs) Market is valued at USD 15.70 billion and is expected to grow to USD 122 billion by 2028. Based on the Compound Annual Growth Rate (CAGR) of 34.10%, the market is projected to be massive in the coming future.

4.2. Performance and growth

Based on the number of transactions carried out in the marketplace over time, the performance of the marketplace can be analyzed. For example, in the first quarter of 2021, a sales increase of more than USD 2 billion was recorded compared to the last quarter in 2020. Compared to the first quarter of 2020, the increase was 131 times the transactions done in the period (Q1 Report 2021, 2021).

The volume of active buyers has also increased over time. From the graphical illustration below, the peak rise in the number of buyers and sellers in the market is easily noticeable. The more active wallets there are in the market, the more users there are in the marketplace (Q1 Report 2021, 2021).

The performance of NFTs can be analyzed by comparing the USD transacted in a given period. The dollars recorded could result from a sale made between the buyer, seller, and collector, or a dollar gained from the dapp, which includes all payments for smart contracts. The graph below denotes the spike in dollar sales in 2021 compared to the stagnant numbers in 2020.

4.3. Top nfts holders

Unlike the large numbers transacted in the marketplace, few top-tier holders drive the market. Instead, a few percent of the buyers and sellers of these NFTs have significant control over the market. The latter explains why the market is prone to wash pricing. The list below shows the top twenty NFT holders in the marketplace. The list is based on the sales volume of each.

NFTVolume sale (ETH)Market cap (ETH)
Bored Ape Yacht Club6391551215169
Mutant Ape Yacht Club431599406890
Otherdeed for other side317451558052
Clone x219789277342
Cool cats10984542749
Bored apple kennel club10348582391
Worl of women7117049322
Pudgy penguins5511517290
Hape prime5505810927
Not worlds5000235279
On1 force487803565
Non Fungible Tokens (NFTs) case study

The table above lists the top 20 NFTs of all time based on their sales volume from their creation to date. The data is sourced from CoinMarketCap. However, when considering the profitability of different NFTs, Superrare and Sorare top the list. Superrare, an art NFT, confirms that artwork is outperforming in the market. Sorare, a sport NFT, comes in second, and Hashmask, a collectible, is third.

Non Fungible Tokens (NFTs) case study
Non Fungible Tokens (NFTs) case study

4.5. Pricing

The cryptocurrency market has a slight influence on the pricing of the NFT market. This is because pricing keeps changing with the prevailing conditions in the market at the time. However, in general, most NFTs have increased in price over time. For example, in the report by Nonfungible, prices increased by a remarkable percentage between 2020 and the first quarter of 2021.

Non Fungible Tokens (NFTs) case study

4.6. Usage of Analytical Tools

The numbers have been shifting over the last few months in a measure of the buyers to sellers’ wallets that transacted the NFT collections within the Nansen analytics. In a report, Nansen attributes the unstable numbers in their market to the newness and instability of the market. However, the company recorded a 23.9% increase in new buyers compared to 2020.

Non Fungible Tokens (NFTs) case study

The average usage per month in the year remained above 700k users, with a higher percent being buyers and sellers from Opensea followed by Mint.  

Non Fungible Tokens (NFTs) case study

Analytical tools come with charges to their users. The table below show the yearly charges for the different analytical tools available.

Analytical toolQuarterly charges (dollars)Yearly charges (dollars)
Icy Tool3501100
NFT Nerds4991989

Conclusion :

The tremendous sales growth of NFTs from 2019 to 2021 indicates that the market is still in its early days, and there is much more room for growth and maturation. As a result, the growth rate of the platform appears to exceed the expected growth rate of an investment. However, there are several aspects to consider, and further research on the topic is necessary to provide a more comprehensive analysis. for more you can read our related articles


Crypto Market Sizing Report 2021 and 2022 Forecast | Crypto.com. (2022, January 19). Cyypto.Com. Retrieved July 14, 2022, from https://crypto.com/research/2021-crypto-market-sizing-report-2022-forecast

Das, D. (2021, November 17). Understanding Security Issues in the NFT Ecosystem. Arxiv.Org. Retrieved July 14, 2022, from https://arxiv.org/abs/2111.08893

Graves, S. (2021, September 22). Lockdown Thriller Movie to Be Released as Limited Edition “Hybrid nfts.” Decrypt. Retrieved July 14, 2022, from https://decrypt.co/81500/lockdown-thriller-movie-be-released-limited-edition-hybrid-nfts


Jiang, X. (2021). Cryptokitties Transaction Network Analysis: The Rise and Fall of the First Blockchain Game Mania. Frontiers. Retrieved July 14, 2022, from https://www.frontiersin.org/articles/10.3389/fphy.2021.631665/full

Kirk, M. E. (2022, June 10). Planning for the Future: Estate and Tax Planning with Digital Assets | Insights | Holland & Knight. Holland and Knight. Retrieved July 14, 2022, from https://www.hklaw.com/en/insights/publications/2022/06/planning-for-the-future-estate-and-tax-planning-with-digital-assets

Q1 Report 2021. (2021, April 2). Nonfungible.Com. Https://nonfungible.com/reports/2021/en/q1-quarterly-nft-market-report

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