This article is part of our Year in Review series.
It’s known: 2021 was the year of the NFT.
Million dollar sales of CryptoPunks went from news to a seemingly weekly occurrence. Bored Apes Yacht Club launched in spring at a 0.08 ETH mint price, and now sits at a floor price of over 50 ETH. The likes of NBA legend Stephen Curry and rapper Post Malone now rock Apes as their profile pictures on Twitter showing just how deeply NFTs have penetrated the mainstream.
Weekly trading volume soared to as high as $1.9B in late August, from levels below $5M at the start of the year, according to a Dune Analytics query as NFT sales were dropping every day.
Beeple sold his “Everyday’s” piece for $69M in March, the most ever for a non-fungible token linked to a JPEG. CryptoPunk 7523 sold for $11.4M in July as a part of an auction put on by Sothebys. And Art Blocks’ generative art pieces crossed the $1B mark in sales, a milestone shared by CryptoPunks and play-to-earn game Axie Infinity, according to NFT data provider CryptoSlam.
The space drew in a new wave of users to crypto as it provided artists and creators with new ways to monetize their content, bypassing intermediaries and platforms.
The NFT space flourished with innovation. Axie Infinity leveraged the tokens in its groundbreaking play-to-earn mechanics. Dom Hofmann, Vine’s co-founder dropped Loot, text-based NFTs around which an ecosystem has been built. Art Blocks pushed generative art forward to the point meriting an auction with Christie’s, another venerable art house. Zeneca and others experimented with NFTs’ use as access passes to communities. Plus gaming and music NFTs are on the rise.
Big brands got on the bandwagon too. Recently, Nike entered the space buying RTFKT just two years after its launch in January 2020, to build metaverse-ready NFTs. Adidas did a drop of 30,000 NFTs in partnership with Bored Apes Yacht Club.
It hasn’t all been rosy. Volume dropped to a still eye-popping 2.38B in monthly ETH volume on leading NFT exchange OpenSea. Prices for some collections have also slid — Cryptoadz floor, once at 13.5 ETH, now sits at 2.09 ETH. Pudgy Penguins saw their floor hit 3 ETH in late August before plummeting to 0.59 heading into the new year.
NFTs have also been heavily questioned for using proof-of-work Ethereum.The post posits that the transactions relating to the average NFT produces as much carbon emissions as a two-hour flight. With Ethereum’s impending switch to proof-of-stake, those ecological costs are anticipated to drop dramatically.
Of course, among NFTs’ detractors, there’s also the “right-click-savers,” who are frankly, NGMI.