The liquidity in the market of non-fungible tokens (NFTs) has decreased, and NFT marketplaces are actively fighting to retain a diminishing number of traders and investors. In response to these trends, some marketplaces are offering incentives to attract and retain traders on their platforms.
Contents:
- Decline in NFT trading and the growth of active wallets
- Incentives and competition on NFT marketplaces
Decline in NFT trading and the growth of active wallets
According to the Dune report, the daily trading volume of non-fungible tokens has been steadily decreasing over the past three months. If there were approximately 44,000 NFT transactions on March 13th, by June 12th, this number had decreased to around 25,000.
According to the latest DappRadar report, NFT sales in May 2023 may have dropped below the $1 billion mark for the first time this year.
According to the research, NFT-related active wallets grew by 27% in May. However, this growth was driven by the popularity of the Miladys NFT collection, which garnered attention from renowned influencer Elon Musk.
Incentives and competition on NFT marketplaces
As noted by Samuel Haig on The Defiant portal on Tuesday, NFT marketplaces are increasing incentives for users in an attempt to cope with the decline in trading activity.
In a post on June 7th, NFT marketplace Blur announced changes to their trader reward system. Blur emphasized that they will now reward traders who take the highest risk with a greater number of Bidding Points.
A tweet has been posted discussing the platform's new approach to distributing rewards in the $BLUR token among users who genuinely contribute to the ecosystem's development. Certain hidden tactics, such as exchanging NFTs for loyalty, participating in wash trading operations, and market manipulation through creating fake bids to create an illusion of demand ("spoofing"), will no longer be effective.
LooksRare, a popular NFT platform that previously had intra-day trading volumes in the hundreds of millions of dollars, has experienced a decline since May 2022. Currently, its activity remains consistently below the $10 million mark. However, LooksRare has decided to regain its former glory and announced the launch of its own "rewards season" on June 1st. Earlier in April, LooksRare reduced fees in the new version of its NFT marketplace.
Meanwhile, despite the decrease in trading volumes, the Kraken exchange launched its own NFT trading platform at the beginning of this month, further saturating the market.
As of mid-May 2023, the Blur platform continued to dominate the NFT trading space, holding an impressive 62% market share, while the OpenSea marketplace lagged significantly with a 26% share.
However, OpenSea boasted the highest number of traders: in the week preceding the DappRadar report, they had 104,882 active users, while Blur had 12,747.
