NFT gaming is at a similar stage to the early mobile gaming days, says a Magic Eden exec, while an analyst from Dune Analytics claims that 58% of NFT trading volume this year has been wash trades.
After a sell-out launch that pocketed roughly $4.45 million from primary sales, former United States President Donald Trump’s nonfungible token (NFT) collection is already on a crash course toward Earth.
Trump rolled out his oddball self-themed 45,000 NFT trading card collection on Dec. 16 for $99 a pop. The NFTs were all gobbled up within a couple of hours of launch, and within the next two days, the floor price on OpenSea shot up to an all-time high of around 0.83 Ether (ETH), or $1,006.
Since then however, the floor price has been volatile, while some in the community have highlighted that the NFT artwork may been plagiarized from other sources.
According to OpenSea data at the time of writing, the floor price sits at 0.2 ETH ($242), marking a hefty retracement of roughly 75%.
Trump NFTs Tanking as Hype Dies, Floor Price Down 70% https://t.co/gFAQLguJbl
— Commom'sen (@SenCommom) December 21, 2022
Trading volumes have also dried up significantly, going from around 1,541 ETH ($1.8 million) on Dec. 18 to just 14.37 ETH ($17,402) by Dec. 21.
Gone in 77 Seconds
Another big celebrity name jumped on the NFT bandwagon this week. NBA Hall of Famer and Chicago Bulls great Scottie Pippen launched an NFT project that sold out in just 77 seconds.
The drop dubbed “Scottie Pippen SP33” consists of 1,000 unique NFT metaverse-wearable sneakers, which went for a mint price of 0.2 ETH ($241). The Ethereum-based NFTs are said to be compatible with “just about any ecosystem.”
The floor price has since risen to 0.42 ETH ($507), according to OpenSea data, with the project generating 211 ETH ($255,000) in trading volume since Dec. 21.
A limited number of randomly chosen hodlers will also receive bonus benefits, with 33 receiving a physical pair of sneakers, two getting the chance to play golf with Pippen and one lucky person getting a tour of Pippen’s hometown plus a dinner afterward.
The NFTs were developed in partnership with Web3 entertainment firm Orange Comet, which seems to have a solid format down pat given that it also produced a collection for Sir Anthony Hopkins that sold out in just seven minutes.
SP33 SOLD OUT IN 77 SECONDS
— Orange Comet (@OrangeCometNFT) December 20, 2022
ORANGE COMET MAKES HISTORY ONCE AGAIN
Thank you all for participating in the @ScottiePippen SP33 Mint on @opensea.
Things only get better from here, stay tuned for more announcements on the utility reveal...https://t.co/cRXVOidCtV
NFT gaming akin to early mobile gaming days
Chris Akhavan, the chief gaming officer of Solana-based NFT marketplace Magic Eden, believes that NFT-based blockchain gaming is at a similar stage to the early days of mobile gaming.
“I was around in the very early days of mobile gaming, right after the iPhone came out, the App Store came out,” he told TechCrunch on Dec. 21, adding that “I remember the attitude back then amongst traditional gaming companies was that mobile games were stupid.”
Despite facing much skepticism in its early days, mobile gaming has gone on to become the most popular method of gaming across the globe. A report from New Zoo in June 2020, for example, highlighted that there were 2.5 billion mobile gamers compared to 1.3 billion PC gamers and 800,000 million console gamers that year.
As such, Akhavan is not fazed by the criticism of the Web3 gaming space and tips it to boom over the next few years.
“We think the same journey is going to happen in Web3,” he said, emphasizing that billions of dollars have already been invested in the Web3 gaming studios to build out a new avenue for gaming.
NFT wash trading on Ethereum
The impressive trading volumes of Ethereum NFTs may be a “mirage,” according to a recent Dune Analytics blog post from pseudonymous NFT market analyst hildobby.
This is because NFT trading volumes on Ethereum may have been skewed by significant NFT wash trading, which hildobby says made up around 80% of total trading activity in January.
Looking more broadly at the entirety of 2022, that figure sits at around 58%, according to hildobby’s data, highlighting that the issue is still rampant and that trading volumes may not necessarily be the best indicator of an NFT marketplace’s usage.
“In a nutshell, the most common method is trading your own NFTs between two wallets you control for the highest amount of ETH possible. The goal is to accrue token rewards with a value in excess of the gas fees you pay,” hildobby wrote, adding that:
“The boom in wash trading really made life tough for us data analysts, since it skews basic statistics that we use to track marketplace usage.”
Limit Break CEO and Web3 game designer Gabriel Leydon highlighted via Twitter on Dec. 20 that the removal of royalty fees by a number of NFT marketplaces may have significantly contributed to this issue.
“Exchange incentivized wash trading will destroy NFTs. It’s amazing how many different ways royalties were important for the space,” he wrote, adding that royalty fees had previously “tamed the exchanges and prevented washtrading on the scale we’re seeing now.”
Exchange incentivized wash trading will destroy NFTs. It’s amazing how many different ways royalties were important for the space.
— Gabriel Leydon (FREE,OWN) (@gabrielleydon) December 19, 2022
Various data platforms such as CryptoSlam have since developed their own methods to filter out potential wash trades, and in their post, hildobby outlined how they are filtering out such trades from their analyses moving forward.
Related: What is the relationship between blockchain and Web3?
In particular, hildobby is now flagging trades where the buyer and seller have the same wallet address; NFTs that are sent back and forth between two wallets; addresses that buy three of more of the same NFT; and wallets in which the buyer and seller were first funded by the same initial wallet.
“When we apply all these filters, the results are eye-opening. On Ethereum, wash trades are only 1.5% of all trades, but…….Over $30B of NFT trading volume - almost 45% of the total - is from wash trading.”
Other Nifty News:
Independent game developer Metaverse Game Studios, which boasts a host of developers that have worked on various AAA titles such Far Cry and Diablo Immortal, has announced a partnership with Web3 development platform ImmutableX to continue building its upcoming RPG Angelic.
Blockchain entertainment firm Coda Labs commissioned a survey targeting game developers to have a peek into their thoughts on Web3. The researchers found that a majority of the respondents believe Web3 gaming is on its way to their firms, with 75% expecting to work on Web3 projects in the future.
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