Your NFTs Are Actually — Finally — Totally Worthless

A team of researchers have crunched the numbers to explain why you don’t see people hawking ugly cartoon apes on the internet as much anymore: NFTs, or non-fungible tokens, once vaunted as a revolution in crypto and digital art, are largely worthless.

“Dead NFTs: The Evolving Landscape of the NFT Market” is a new report from dappGambl, a community of experts in finance and blockchain technology. Upon analysis of 73,257 NFT collections, the authors found that 69,795 have a market cap of zero Ether (ETH), the second most-popular cryptocurrency behind Bitcoin. In practical terms, that means 95 percent of NFTs wouldn’t fetch a penny today — a spectacular crash for assets that reached a trading volume of $17 billion amid a frenzied bull market in 2021. The study estimates that some 23 million investors own these tokens of no practical use or value.

What’s more, supply vastly outstripped demand for NFTs. Just 21 percent of the collections included in the study can claim full ownership, meaning around four out of every five collections remains unsold. With buyers becoming more discerning, the report notes, “projects that lack clear use cases, compelling narratives, or genuine artistic value are finding it increasingly difficult to attract attention and sales.”

And, while headlines during the heyday of NFT speculation focused on individual pieces that sold for the equivalent of millions of dollars in crypto, almost none are so exorbitantly priced today. Less than one percent are listed at more than $6,000, and the bulk of the most expensive collections are priced between $5 and $100. Almost a fifth of the “top” collections have a floor price of zero. Even among the more expensive NFTs, the report notes, such prices may be set “without any bearing on tangible, real demand,” reflecting wishful thinking from sellers and potentially distorting investors’ view of an NFT’s meager inherent value.

The dappGambl researchers conclude that while we may never see an NFT boom like the one in 2021-2022, the assets may evolve in a way to survive the wipeout. For example, they could be given a specific function, becoming a pass for special event access or a virtual item to be purchased and traded in video games.

by Miles Klee, Rolling Stone |  Read more:

Image: Manuel Candela/Anadolu Agency/Getty Images