NFT Monthly Report - January 2023

Introduction

January was an eventful start to the year for the NFT sector. Despite a few negative headlines, such as major hacks, the overall sentiment in the market was positive with the launch of new projects, high trading volumes, and significant developments. In this monthly report, you will find a summary of all the most important stories and events from the past month. We'll also include an overview of the market, including trading volumes and charts, and we'll give you a glimpse into what to expect in February! The year 2023 started on a positive note. Bitcoin is up 40% and Ethereum 32%, which has positively affected the trading volume in the NFT market. Let's dive in!

In this report:

• Amazon Joining Web3 & NFTs
• Yuga Labs Success with Play-To-Earn
• Porsche NFT Collection Failed and Succeeded
• Tiffany & Co Partnership with Nike
• Hacks in the NFT Sector
• How Programmable Royalties will Radically Change NFTs
• Open Edition NFTs Debate
• Upcoming NFT Projects
• Market Statistics & Charts
• New NFT Creator's Royalties are Changing the Game

Top News & Events of the Month

Amazon Joining Web3 & NFTs: This Spring, Amazon is rumored to launch its NFT program, venturing into digital collectibles and NFTs. With a planned platform release in the spring of 2023, Amazon is making its debut in Blockchain & Web3 by offering customers the ability to play crypto games and purchase or trade NFTs. As a dominant player in e-commerce, Amazon's entry into the Web3 space has the potential to impact the industry and bring millions of users into Web3. Further updates and announcements are expected in April 2023.

Yuga Labs Success with Play-To-Earn: YugaLabs, the company behind the Bored Ape Yacht Club, launched their NFT-based video game named Dookey Dash, which became a big success within the NFT sector. Players had to own a Sewer Pass (game pass) with a starting price of $3,800 (2.3Eth). What's interesting is that these passes are selling like hot potatoes! Why? Because people have the chance to get value in return. The SewerPass not only serves as access to play the game. Users will also get rewarded based on how well they performed during the game. On February 8th, owners of the Sewer Pass will be allowed to participate in a mint, which it is rumored to be a valuable NFT. This may be the way into the BAYC ecosystem for many. Why is this news so important for GemFi? Yuga labs have achieved something that many gaming companies have tried for years by making a highly monetizable game with digital assets. They have created the urge for people to spend large amounts of money ($APE) to increase their chances of winning while playing a highly addictive skill-based game. This could represent a future trend in gaming in Web3, and we can expect more projects to adopt this monetization model.

Porsche NFT Collection Failed, then Succeeded: Many companies have joined Web3 by releasing NFT collections. Porsche decided to launch an NFT collection of 7.000 NFTs featuring their digital collectible version of the iconic Porsche 911 model. Porsche expected everyone to be enthusiastic about the release and decided to set a mint price of 0.911ETH, roughly $1.500 USD, which is relatively high, especially for a first collection. To Porsche's surprise, they only sold 2.363 out of 7.000. Many people criticized the project, stating it was a cash grab and a total failure. However, one day after the release, the team released a statement announcing the burn of the remaining NFTs, which did not sell, resulting in a more exclusive community. The team also announced upcoming real-life rewards for the community, where NFT owners could pick between having the opportunity to drive a Porsche 911 in real life, visiting the Porsche factory in Stuttgart, or attending Formula E events. The price rose from 0.119ETH to 2.8. The Floor price is currently 2.25 ETH (~$3.562).

Hacks in the NFT Sector: One of the co-founders of Moonbirds, Kevin Rose, suffered a cyberattack resulting in the loss of many valuable NFTs in his wallet. This unfortunate event highlights one of the major problems in the NFT space: hacks and scams. Even tech-savvy people can get hacked if they do not take the appropriate measurements. Rose mistakenly signed a suspicious transaction that compromised his NFTs. He detailed the experience in a comprehensive Twitter thread as a cautionary tale for the entire NFT community, reminding us that no one is immune to these attacks. The total amount lost is roughly $1.1M. Read our full article on how Kevin Rose Lost $1 Million in Stolen NFTs. Additionally, Azuki, one of the largest NFT collections, got its official Twitter account hacked. The hackers took over the account for a short time. The hackers posted a virtual land mint, which many users clicked on, and got their wallets drained, leading to hackers stealing over $750K in digital assets. This is a wake-up call for many NFT collectors. Remember always to keep your most valuable assets in a cold wallet, always be careful when signing contracts with your wallet, and NEVER share or leave a digital track of your passwords and seed phrase.

How Programmable Royalties will radically change NFTs: The NFT space is evolving thanks to a recent release of an open-source library of smart contracts released by Limit Break, one of the leading companies in the NFT sector. The library of smart contracts provides access and allows creators to set specific rules for this royalty sharing. This could be a significant advancement in the way the industry operates as it rewards creators, marketplaces, AND collectors every time a transaction of an NFT occurs. We wrote a full article dedicated to this topic named Programmable Royalties: A Radical Change for NFTs.

Tiffany & Co Partnership with Nike: Tiffany & Co announced a new collaboration with Nike. This collaboration has generated a buzz in the market as both companies have shown significant interest in the Web3 space, fueling speculation about what this partnership could lead to. There hasn't been much information from either of the two brands. However, the NFT community eagerly anticipates the release of the legendary pair of sneakers linked to a digital collectible. We'll watch how this collaboration turns out and keep you updated in our weekly NFT report!

Open Edition NFTs Debate: There's an ongoing discussion about Open Edition (OE) NFTs. Open Editions are NFT collections with an infinite supply within a limited time frame. In other words, people can purchase any number of these NFTs as long as it is within the specified period. OEs skyrocketed in popularity in Digital Art collectibles last month. We recently saw a few artists generating millions by releasing OEs. Artist NessGraphic raised over 1.400 ETH ($2m) in less than an hour. However, some critics state that this damages the NFT space, as 'scarcity' and exclusivity are no longer appreciated in Open Editions. Others say that Open Editions are similar to buying a print or a poster from an artist. Regardless of how you see them, it is a fact that they are linked with great profiting opportunities. However, keep in mind that the main utility of these OE NFTs is primarily Art, so it would probably be a smart thing to purchase them only if you love the art.

NFT Market Statistics & Charts

Monthly Change:

• Bitcoin: 40% - $23,100
• Ethereum: 32% - $1,583
• Solana: 140% - $23.85

NFT Rankings - Top 25 Collections Chart:

The Yuga Labs ecosystem dominated the charts this month thanks to the successful release of Sewer Pass, which served as the game pass for the Dookey Dash game—currently sitting at the top of the chart, with a total trading volume of 27K ETH. Otherdeed seems like the cheapest option to enter the Yuga ecosystem now. Another project that outperformed the rest was The Memes by 6529. They released multiple airdrops each week with reputable NFT artists, which boosted sales and ended the month with a remarkable 78% increase in floor price. Azuki performed well this month, regardless of the recent Twitter account hack. Azuki closes the month with an 8% increase, sitting at 14.8E. Overall, it was a good month for the NFT market. The first three weeks were bullish, and we saw consecutive green numbers. In the last week of January, we saw a price correction, which is expected after the recent short bull run.

Marketplace Distribution:

Below is a representation of the distribution and trading activity across the primary marketplaces for digital collectibles. OpenSea has remained in the lead and dominated the charts since 2021. Blur has been gaining momentum since the last November of last year, and every month seems to get closer to the first position. On February 14, Blur will release its token $BLUR on Valentine's Day, which might shake the leaderboard. We might see an initial dump of $BLUR, but eventually, the token could rally. This might stimulate the NFT market. So if you have any Valentine's Day plans, keep an eye on the market, as it is expected to have high trading activity!

Market Sentiment:

January was a positive month for the NFT market. Many traders and retail investors resumed trading activities. In addition, we saw the release of new collections. Overall, the market sentiment is moving towards a healthier state. This month we saw numbers that we didn't see since May 2022. This could be either a bull run or an excellent bull trap. Time will tell!

NFT Trading Volume:

Trading volume is slowly picking up momentum. However, we are far from the levels we saw twelve months ago. The involvement of big players, like Amazon, may bring a new wave of Web3 users, increasing trading volumes. Overall, January brought healthy volumes and trading activity compared to other sectors in crypto. And from the amount of development and upcoming projects in the NFT space, it looks as if 2023 will be a positive for the industry.

That's all for this month's recap. We hope you enjoyed it, and consider subscribing to our newsletter to get these monthly reports delivered straight to your inbox!

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