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Prominent non-fungible token marketplace OpenSea has seen a significant drop in its trading volume. On 31st October 2022, the NFT marketplace reported to witness a drop of 94% in its trading volume from its ATH. OpenSea trading volume was at its peak of about 4.86 billion USD in January which has seen a significant drop.
OpenSea is known to support a ton of NFTs developed across multiple blockchains. From Etheruem to Solana to Avalanche to Klatyn, the NFT marketplace has them all. Moreover, another prominent layer 2 solution Aritrum announced that the NFTs developing on its platform would be listed over the platform of OpenSea.
Data aggregator DappRadar also reported the overall NFT transactions on the marketplace also saw a drop of 98%—from 406 million USD in May to 7.63 million USD.
Bored Ape Yacht Club (BAYC) is the top NFT collection over the platform, its floor price has also seen a drop from its peak of 144.9 ETH to 64.78 ETH. Meanwhile, the floor price of another popular NFT, CryptoPunks, also went through a similar fate, witnessing a drop from 122 ETH to 100 ETH.
The statistics seem to resemble the report from Activate Technologies explaining the hype around the NFTs is getting over. NFTs were meant to be quite popular among the adults and youngsters. Data highlighted a drop from 76% to 51% in their participation. The similar data is supported by several other reports.
Another report cited the crypto market downturn as another potential reason behind the declining user base of OpenSea. It highlighted that investors are making distance from riskier assets.
Apart from this, growing competition within the NFT marketplace also acts as a crucial factor. A significant threat to OpenSea comes from multichain marketplaces like Magic Eden. NFTs minted on Solana were first sold on Magic Eden’s marketplace. Since then, it has added more products to its lineup.
The Ethereum NFT collections that fall under its umbrella include CryptoPunks, Otherdeed for Otherside, Bored Ape Yacht Club, and ArtBlocks. With users building 3 million wallets, popular social media site Reddit has also experienced a surge in interest in its NFT collection.
Multichain listings are advantageous to the user, yet being difficult for marketplaces like OpenSea. This is due to the prospect of trading NFTs across many blockchains, which would improve their liquidity and possibly raise their value. The Ethereum network’s users might switch to alternative blockchains on a market with cheaper costs.
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