Analyzing 3 Years of Non-fungible Token Expansion

As we prepare our alpha testers for retro yet futuristic KOGS gameplay, we’re exploring NFT trends to play an in-house game of Sentiment Recon.

Our recent journey down the digital rabbit hole was fruitful! We uncovered the 2nd edition of a stellar annual report, courtesy of the analysts at NonFungible.Com — the largest database of blockchain gaming and crypto-collectible markets.

You see, our upcoming mobile game — the first in the world to processes 100% of its logic on a blockchain — runs on non-fungible tokens.

What are those, you may ask? Well, for starters, unlike bitcoin, NFTs are not interchangeable.

Click here to discover more about what makes NFTs unique!

Because KOGS game pieces will land in marketplaces where players can buy, sell, and trade, we’re currently studying what sparks interest from the NFT community.

And our findings are not only encouraging but also another source of validation that we’re on to something huge.

Swelling Adoption

Non-fungible tokens trace their roots back to 2017’s launch of CryptoKitties, one of the world’s first blockchain games. The title is part of a growing ecosystem of decentralized applications — DApps .

Running on top of Ethereum — and subsequently clogging the entire network’s pipes for everyone, CryptoKitties — brought a new use-case to the realm of digital assets.

Since KOGS computes within the highly scalable Komodo Platform, there’s no threat of network congestion.

The application of emerging tech, including blockchain, AI, and robotics, involves experimentation leading to progressive breakthroughs. The invention of NFTs caused the convergence of blockchain, cryptocurrencies, gaming, and collectibles. And the industry shows no signs of slowing down.

NFTs are so full of intrigue that entire conventions now surround their development. Coincidentally, New York City recently played host to one such meetup.

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If you’re imagining a small gathering of hardcore enthusiasts partaking in a roundtable discussion, think again. The convention attracted over 100 speakers from a wide range of projects.

Attendees heard from the CTO of OpenSea, one of the largest peer-to-peer NFT marketplaces, as well as correspondents at CoinDesk and management at Microsoft. Most of the NFT industry’s big names were either in the audience or on stage.

And with talks ranging from 5–20 minutes, the day was undoubtedly intense. The magnitude of this event is a testament to the past three years of growth in the NFT space.

Just how big has the monster grown, exactly? Let’s consult the numbers…

4 Non-fungible Takeaways

What we’re about to show you requires a subscription and a download. However, we saved you the time and energy! But if you consider yourself an NFT enthusiast, hop aboard NonFungible’s mailing list to see the report in its entirety.

After all, once KOGS is full-steam ahead, we’re turning to NonFungible.Com to conduct comparative scrutiny. In other words, we’re keen on measuring KOGS performance against other blockchain games.

Digesting the report revealed upsides and as well as downsides for NFTs at large. But as you’ll soon see, declines appear to follow general market sentiment.

Let’s begin with the negative, and then we’ll overpower the dark with a bright light at the end of the tunnel.

1) USD Sales Fell

Between January and March of 2018, monthly NFT value transfers dropped from $70M to $10M.

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On the surface, that’s a black eye for the industry. However, bitcoin’s price chart during the same timeframe bears a striking resemblance.

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Bitcoin is the reigning king of cryptocurrencies, and most cryptoassets eventually follow its direction. Still riding late-2017’s parabolic bull run into January, NFTs mimicked BTC’s precipitous fall from grace. Because when the entire crypto MarCap drops, NFTs can’t help but get caught in the undertow.

2) Market Capitalization Skyrocketed

Thankfully, it’s not all doom and gloom.

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The overall NFT MarCap is on a continual upswing. What began at $31M in 2017 ballooned almost 7X to reach $210M in 2019.

3) Addresses Elevated

While the ‘Collectibles’ category saw a year-over-year dip, role-playing and strategy games achieved massive growth.

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That said, let’s consider the overlap. The ‘Art’ measurement inevitably crosses over into ‘Collectibles.’ Moreover, certain NFTs — Kogs game pieces, for example — are playable as well as collectible. Some gamers will play just to play. Others will play to collect more pieces.

We can’t forget the subset that, despite an NFT’s playability, never enters a match — with the ultimate goal of amassing a complete collection.

4) Smart Contracts Shot Up

Once we put the NFT market and the general cryptocurrency market on the same playing field, the situation improves.

The number of contracts selling at least one asset jumped dramatically last year.

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New NFT typologies are fueling contract growth. As NFTs expand beyond gaming — utility tokens and digitized art, for example — progression will undoubtedly spawn new use-cases, causing this figure to increase.

However, at least for now, blockchain gaming and crypto-collectibles represent the vast majority of the overall NFT market.

Capital Influx

As stated in the report, “investors continue to pour in.”

Notable injections include OpenSea’s $2.1M and $1.4M to Vietnamese startup Sky Mavis, the studio behind Axie Infinity. Another $6M went to Lucid Sight, developer of MLB Champions Baseball.

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The title of Fundraising King was bestowed upon trading card game Gods Unchained, powering up by $15M in September.

Yes, we already did the math! Between a secondary marketplace and three dev studios alone, 2019 saw NFT investors sink $24.5M into the industry.

Like investments in other rarities — coins, stamps, comic books, music, cars, etc. — NFTs are gaining traction as viable portfolio allocations.

A New Metric Emerges

2020 marks the third year of NFT data gathering. As such, specific historical indicators can no longer accurately capture project health.

To move metrics forward, NonFungible created the ‘NFT ID,’ which represents five distinct categories — asset value, community retention and size, plus interaction and trade volumes.

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Of the 15 projects filtered by NFT ID, My Crypto Heroes is the champion. At least for now!

Current Conditions

Proper NFT market analysis entails access to reliable historical data. And we found a data fountain in NonFungible’s Market History section.

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Blockchain games rank according to three metrics: total USD sales volume, total number of NFTs sold, and average USD price per NFT.

Of course, these figures will change by the time you read this, but across the last seven days, players of Cryptovoxels — a user-owned, virtual world — exchanged nearly $39k with an average sale price of $693.

But don’t count out Decentraland, hovering just beneath the top spot. Also, watch out for Gods Unchained with nearly 8k sales in only one week.

Predicting the Future

Alliances are forming. Use cases are growing. And more players are entering the space. Those NFT touchpoints are all verifiable.

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Peering into a crystal ball, however, NonFungible expects 2020 to realize a 64% bump in USD transfers. That all adds up to a quarter-billion dollars, driven by a 30% jump in ecosystem participants.

And at this point, it’s only a matter of time before big exchanges begin swimming in the NFT ocean. Binance has shown interest by creating a Guide to NFTs, and perhaps we’ll see BNBNFT as a tradeable asset.

Paraphrasing NonFungible, this sums up their findings from 2019’s NFT activity:

“The ecosystem has significantly changed … success stories are numerous … non-gaming projects are developing … communities are constantly growing … the whole space is getting more mature … there’s no doubt that we’ve reached the next level!”

2019’s investment dollars positioned 2020 to be a year of tremendous growth. And here at RedFOX Labs, our gaming division is beyond thrilled to infuse the NFT ecosystem with a world-first achievement! We’re looking forward to not only releasing our mobile blockchain game but also facilitating its game pieces’ availability in secondary markets.

After all, true ownership lies at the heart of NFT utility. Put another way, NFTs live in your wallet, not on a centralized game server out of your control. That one trait, among many more, is what makes NFT so attractive to gamers and collectors alike.

Game on, everyone. 2020’s NFT scene is overflowing with potential!

Do you own NFTs? Do you play blockchain games? Share your thoughts in the comments below!