Nearly All NFTs Labeled as Inactive, Claims Report

Nearly All NFTs Labeled as Inactive, Claims Report

The Cold Truth about NFTs: 96% of Projects are Flopping, According to a Report

After the extraordinary surge in 2022, the frenzy surrounding non-fungible tokens (NFTs) seems to have dwindled, as per a recent report that suggests 96% of NFT projects are now a bust.

Researchers dug into 5,000 NFT collections, investigating around 5 million transactions, and scrutinizing parameters like holder profitability, collection performance, and project endurance to arrive at this conclusion.

Wake-Up Call for NFT Investors: 96% of Projects are Dead on Arrival

According to NFT Evening's findings, a staggering 96% of NFT projects are consigned to the digital dustbin, with 43% of holders currently bleeding money. The average NFT holder is staring at a loss of 44.5%, and the typical lifespan of an NFT is just 1.14 years - 2.5 times shorter than crypto projects. The report further reveals that nearly one-third of NFT projects perished in 2023, marking a record-breaking failure rate.

The Azuki collection is the crème de la crème of the NFT digital collectibles universe, giving holders a jaw-dropping ROI of over 2.3X, thanks to its intense community engagement and clever marketing tactics. In May, BeInCrypto reported that Azuki NFT sales smashed records, netting $1.13 million in a single month, and amassing total sales of over $1.12 billion. This continued success underscores the enduring appeal of high-value NFTs. Notably, other popular collections, such as CryptoPunks, and Bored Ape Yacht Club, are still hot commodities.

In stark contrast, the Pudgy Penguins collection is classified as one of the "dead" projects despite its impressive May performance. Research reveals that Pudgy Penguins NFT holders are experiencing a significant dip in profits, with a shocking 97% decline.

The chasm between the profit and loss rates of individual NFT holders, the stark contrast between successful and flopping collections, and the wild disparity in project lifespans highlight how the NFT market is not the golden goose it once seemed.

Theta Labs Head of Strategy Wes Levitt opined, "It's true that the majority of PFP-styled NFTs have lost most of their value, which is fair and expected given that most were spin-offs of a few innovative early projects in the first place. This is true of crypto tokens as a whole as well."

Meanwhile, Trump NFT's fourth series, "America First," continues its ascent, and Tron founder Justin Sun has declared intentions to birth his own NFT project on the blockchain.

With the report illuminating the harsh reality of NFT investments, investors need to tread carefully. Menaces like rug pulls, where projects make off with investors' money, and wash trading, which manufactures demand, are common in the NFT space. Moreover, the legal rules governing NFTs remain unclear, making it risky for newbies venturing into the market.

Levitt added, "The PFP side of NFTs was always on the speculative end of things by its nature, but the funds flowing into the space have also supported more meaningful NFT projects. In the future, NFTs that aim for longstanding value will need to offer tangible benefits beyond hype and speculation."

Sources:

1. https://rehsgallery.com/blog/sothebys-nfts-sale-underperformed-dramatically
2. https://rehsgallery.com/blog/ai-art-sales-numerous-liabilities
3. https://www.cnbc.com/2022/01/07/want-a-million-downloads-build-an-app-retention-is-key.html
4. https://www.theverge.com/21270310/online-retailers-overprice-clothes-waste

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1. Despite the decline in interest, the report suggests that 96% of NFT projects are failing, with 43% of holders currently losing money.
2. Research involving 5,000 NFT collections and 5 million transactions found the average NFT holder is experiencing a loss of 44.5%, and the typical lifespan of an NFT is only 1.14 years.
3. In contrast, the Azuki collection has been a success, providing holders with a return on investment (ROI) of over 2.3X, due to strong community engagement and effective marketing strategies.
4. However, Pudgy Penguins, despite impressive May performance, is classified as one of the "dead" projects, with NFT holders experiencing a significant dip in profits and a 97% decline.
5. The NFT market's lack of profit for the majority of projects, the stark contrast between successful and flopping collections, and the short lifespans highlight the market's shift from its once- golden goose image.
6. The report also warns about risks in the NFT space, such as rug pulls and wash trading, and the unclear legal landscape, making it risky for new investors.
7. Theta Labs Head of Strategy Wes Levitt notes that while PFP (profile picture) NFTs may not hold lasting value, they have supported more meaningful NFT projects and will continue to do so in the future.
8. Despite the harsh realities, Tron founder Justin Sun has plans to launch his own NFT project, and Trump NFT's fourth series, "America First," is still gaining traction.

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