As musicians rush to be part of the NFT craze, trade volumes on OpenSea have plummeted more than 90%.
According to a report from DappRadar, transaction volume on the NFT marketplace has dropped 99% from its record high in May. OpenSea processed around $5 million of NFT transactions on August 28, compared to $405.75 million on May 1 of this year. The trade volume on the platform has dropped 90% from the January 2022 peak of $4.85 billion.
OpenSea has also experienced a massive drop in users, which would explain the drop in transaction volume. Another noticeable effect of the ‘crypto winter’ is that the floor price for popular NFT projects is falling. The floor price is the minimum bid the owner will accept for the NFT. As no one bids or buys, NFT owners can lower the floor price.
The report suggests the floor price for popular NFT projects like CryptoPunks and the Bored Ape Yacht Club are reaching new lows. The CryptoPunks floor price has dropped around 20% from its July high of 83.72 ETH. Meanwhile, the Bored Ape Yacht Club floor price has fallen by 53% from its high of 153.7 ETH. The BAYC is also the NFT project Universal Music has a stake in with its digital KINGSHIP band, featuring Bored Apes as members.
The Ethereum blockchain counts for more than 90% of NFT volume on OpenSea. The price of one ETH has fallen from $4,950 in November 2021 to just $1,500 in August 2022. Waning interest in the NFT market following such a huge drop in ETH price has attributed to a 40% drop in NFT trade across the market, according to Footprint Analytics.
OpenSea grew infamous in many crypto communities for profiting from high Ethereum gas fees. The platform has begun the integration of layer two scaling solutions like Polygon into its Seaport protocol. OpenSea says the benefit here is no setup fees for new users.
“In addition to saving 35% in gas fees for transactions, you will no longer have to pay a one-time setup fee to start using OpenSea,” the official tweet reads. “By removing the setup fee alone, the OpenSea community could save $120M each year.”