Tiny Minority of OpenSea Users Scoop Up Most NFT Profits: Report

Only 5% of OpenSea users are scooping up the bulk of the profits in secondary trades executed on the NFT platform, according to Chainalysis, a blockchain intelligence firm.

It also pays to be a whitelisted NFT minter — they’re realizing big gains amid the surging nonfungible token market, while other traders are losing money in most transactions, the report said.

That small minority of users are raking in 80% of profitable trades, Chainalysis says in its 2021 NFT Market Report. Two-thirds of the secondary transactions on OpenSea were profitable. “20% of user addresses on OpenSea account for 80% of secondary NFT sales, while just 5% of all addresses account for 80% of profits made on secondary sales,” the authors wrote.

The report also found that the NFT market remains robust. At the end of October, 81% of NFT transactions were valued at less than $10K, down from 94% at the start of March. Roughly 500 NFT transactions worth $100K or greater are executed each week.

Returns of 100%

Chainalysis noted the data does not account for “NFTs that have been minted, bought, and never resold.” Chainalysis said that 250 NFT collections account for eight out of every 10 secondary sales.

Chainalysis estimated that whitelisted NFT minters, who earn special access to assets, were profitable in three quarters of the transactions on OpenSea, with more than half of the trades pocketing returns of 100%. By contrast, 71.5% of transactions involving non-whitelisted NFT mints resulted in a loss on the platform.

“The data is clear: Whitelisting provides a significant financial reward for those who play a role in an NFT project’s success by seeding its early community growth efforts,” Chainalysis wrote.

Smart Contracts

Chainalysis says that between January and October of this year, users have sent at least $26.9B in crypto assets to ERC-721 and ERC-1155 contracts, describing such as “the two types of Ethereum smart contracts associated with NFT marketplaces and collections.”

Leading NFT marketplace OpenSea received $16B throughout the period, during which more than 6,000 collections attracted at least one transaction including minting or trading. CryptoPunks NFTs also drove $3B in volume over the period.

The number of weekly active NFT collections on OpenSea increased to 2,300 from 250 between March and late October. “Flipping NFTs with a prior sales history [exhibits] a much higher success rate than reselling NFTs bought during minting,” the report concluded.

Chainalysis examined the regional origin of traffic visiting NFT marketplaces from January until October, noting North American and Central & Southern Asian activity is roughly on par after diverging significantly during the year.

Asian Traffic

While both regions represented one-quarter of NFT marketplace traffic as of October, North Americans represented more than 45% of visitors at the start of the year compared to just 10% from Central & Southern Asia. However, Asian traffic picked up toward the second quarter, with the region dominating traffic with 35% compared to North America’s 21% during June. Latin American visitors picked up mid-year, increasing to 18% from 9% before slowly pulling back halfway.

The share of global NFT traffic represented by European visitors declined mid-year, before making a slight recovery in the third quarter.

Chainalysis concludes the data suggests “NFTs have achieved global popularity,” adding that no region has represented more than 40% of marketplace traffic since March 2021.