March 2, 2023
By Murtuza Merchant
After a steep decline in user activity towards the end of 2022, total gas consumption by non-fungible token (NFT) transactions has risen by 97% for two consecutive months.
This suggests that activity around NFTs is approaching levels seen during the NFT boom, according to a report by Glassnode.
The report further states that NFT traders are currently benefiting from lower fees, increased liquidity, and improved price discovery in the NFT market due to increased competition and a shift in focus.
However, creators may feel disadvantaged as the industry cuts back on royalty enforcement.
Despite the renewed interest in NFTs, the Ethereum ecosystem has not yet seen an influx of new users or significant capital inflows.
Nevertheless, if future NFT trading activity increases, it could lead to net value creation for the Ethereum network.
This could result in higher MEV rewards, more arbitrage opportunities, and the development of new infrastructure for the future.
Meanwhile, Glassnode pointed out that NFT marketplace Blur has achieved some success in attracting traders beyond the initial hype of its airdrop earlier this month, thanks to its user acquisition strategy and emphasis on incentivizing liquidity.
As a result, the marketplace has the potential to become a major player in the NFT industry.
However, it is unclear whether the platform will be able to maintain its newly acquired user base, given that it has recently announced a second airdrop that rewards users for loyalty.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.