DappRadar’s NFT market report shows bleak financials in Q3, hope for Q4
Despite financials falling in Q3, total sales in the NFT market are expected to grow by 6% by the end of the quarter, according to the latest report by DappRadar, the app store for decentralized applications.
Trading volume decreased by 75% ($2 billion) from the prior quarter, with tough economic headwinds and the impact of the Terra Luna crash, but sales are now estimated to reach 21.1 million by the end of Q3. The number of unique traders count increased by 36%, compared to Q3 2021.
“Taking into consideration the amount of brands that are starting to implement NFTs and the number of unique traders of this quarter (2.2 million), the expansion of the NFT market will continue expanding also in 2023, but the road ahead will be rocky,” the report concludes.
Ethereum, blue chip, art, gaming, luxury, sports
DappRadar also found that the market cap for Ethereum’s top 100 NFT projects suffered a 44% ($19 billion) decrease in USD value in Q3 (QoQ). The market cap in terms of ETH based NFTs as a whole decreased only 27% (12.2 million ETH). In contrast, NFTs on ImmutableX increased trading volume by 87% from the previous quarter showing the potential of web3 games.
As to blue chip collectibles, trading volume in Q3 fell by 88% reaching more than $334 million, almost the same value as in the second quarter of 2021. The report countered that the floor price of the top 11 blue chips collections hasn’t decreased, but it has maintained almost the same value as before Terra’s collapse.
When it comes to digital art, the market has cooled off in Q3 but the digital art industry is showing signs of expansion as contemporary art institutions begin to acquire art produced as NFTs. Since January 2021, sales of digital art incorporating NFTs reached over 4.5 million and a total trading volume of over $3 billion.
Moving to blockchain gaming NFTs – which is worth more than $8.6 billion and with 847,000 daily Unique Active Wallets (UAW) registered in August – total trading volume of NFTs declined sharply from $1 billion in Q1 of 2022 to just $71 million in Q3. Sales numbers also fell off from 12 million in Q1 to 3.3 million in Q3.
Reviewing the fashion and luxury NFT market, DappRadar argued that demand remains one of the strongest use cases, but trading volume dropped off significantly from Q1 to Q3.
The sport NFT market, led by soccer and basketball, saw volumes decreasing by 63% in Q2 while the number of sales crashed by 54%. In Q3 the total trading volume is more than $18 million, a further 61% decrease from the previous quarter, and the sales count is one million, a 47% from Q2.
DappRadar ended its report with a brief on the impact of Ethereum’s Merge on NFTs, with the consequent reduction in energy consumption required by the new Proof of Stake mechanism being a positive step forward to combat criticism of NFTs. “This is a significant advancement for Ethereum and particularly for NFTs, successfully rebutting one of the most common NFT objections.”