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NFT Market Outperforms DeFi for Ethereum Usage and Fee Burning

Non-fungible tokens have become the most popular thing on the Ethereum network, and as a result, gas fees have risen once more.

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Decentralized exchange when it comes to Ethereum usage, Uniswap is no longer on top. However, in the midst of a frenzy of fresh NFT airdrops and rock fever, the OpenSea NFT marketplace has now claimed that honor.

The OpenSea NFT Market has Gotten a Boost

OpenSea is now the top provider of transaction fees on Ethereum, according to Etherscan’s Gas Tracker. The NFT portal has consumed 15.46% of the network’s total gas cost in the last 24 hours. At current pricing, this corresponds to about 900 ETH or $2.8 million in transaction fees.

Uniswap was the clear leader in Ethereum consumption for most of this year, but it has now fallen to second place with 8% of the total gas, or 477 ETH worth about $1.5 million (version 2). Even adding Uniswap v3 to those statistics doesn’t come close to the amount of money OpenSea is spending on network fees.

Another NFT platform for the game Axie Infinity was in third place, which generated 270 ETH, or $860,000 in Ethereum transaction fees over the past 24 hours.

According to the gas burn tracker ultrasound.money, all of that gas use has put OpenSea at the top of the fee-burning leaderboard as well. At writing, 1,240 ETH has been burned in OpenSea transactions in the previous 24 hours. At today’s values, this would be roughly $3.9 million. So naturally, there will be some differences in the methods used by the two stats providers.

With 665 ETH, or $2.1 million, Gala Games’ Vox NFT collection has consumed the second-largest amount of gas in the last 24 hours.

Fee burning becomes deflationary, and gas prices skyrocket

The ultrasound.money burning tracker reported a total of 25,900 ETH burned less than a week after the London upgrade was installed at the time of publication. This is worth $82 million at today’s value.

Some blocks have had a deflationary effect due to the large spikes in gas and ETH consumption. Deflationary blocks are created when the amount of ETH burned exceeds the mining reward, causing the supply to fall temporarily.

The ETH Burn Bot noticed this a few hours ago when 945 tokens were burned in just an hour, resulting in a net issuance change of -417 ETH and a -3.12% yearly inflation rate (deflation).

However, it is not all good news for Ethereum users since gas fees have once again risen to an average of $20. For token swaps and smart contract activities, they’re even higher, topping $30 on average.

NFT

NFTmania to Decrease? Volumes of NFT Trades have Begun to Decrease

Although the volumes of NFT trading achieved tremendous heights in August, they decreased dramatically in September.

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Investors appear to have drastically lessened their demand for non-fungible tokens, reaching all-time highs in August. Indeed, the NFT-based trade volumes at Ethereum did not exceed $100 million in the last three days, while in August, they exceeded $500 million for one day.

The Volumes of NFT Trade to the South

According to Alex Thorn, head of firmwide research at Galaxy Digital, a recent study has shown that daily volumes of non-food tokens have been falling steadily every day since the start of September.

For example, the NFT marketplace was about 300 million dollars on September 1 and 2; however, the marketplace was less than 100 million dollars after September 10. On the contrary, the trade volumes recorded successive all-time highs, exceeding $500 million daily on 29 August.

Talking of the amazing peak last month, OpenSea – a significant peer-to-peer marketplace that is not fungible – was an enormous milestone as its trading volume reached the 1 billion dollar mark.

Previously, the platform had a total transaction volume of about $100 million in 48 hours. Moreover, this figure was four times higher than that registered by the Open Sea during 2020.

However, the NFT industry has increased its popularity this year despite the fall in trading volume in September. Athletes, singers, entertainers, musicians, and other notable people who started their different digital arts became highly attractive.

Who Was Part of the NFT Craze

Some are particularly concerned with the mania that is not fungible among these renowned persons. For example, the famous quarterback Tom Brady is like this.

In April, the 43-year old, probably America’s most successful football player, said that his own NFT platform, Autograph, would be released. By doing that, Brady planned to bring together important names from diverse industries, such as sports, fashion, pop culture, and entertainment. They might produce individual digital pieces of art.

Since Naomi Osaka, Tiger Woods, and Tony Hawk joined the platform, his plan appears to have been tremendously successful.

Eminem, a hip-hop giant, also stepped onto the NFT bandwagon. After working with the digital art auction platform, Nifty Gateway, the 15-time Grammy winner, unveiled a collection of his own, dubbed Shady Con.

One of the latest examples of this is the American comic book powerhouse Marvel Entertainment. Firstly, in early August, the organization joined together to release Spider-Man NFTs with the blockchain digital collectibles market – VeVe. Shortly thereafter, new digital collections, including Captain America, Barnes’ Bocky, and Red Skull, were added to expand their not-fungible token universe.

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China’s Official Media Slams the NFT Craze

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Securities Times, a sister publication of the People’s Daily, issued an editorial piece criticizing non-fungible tokens as the hype and arguing that digital assets should serve the real economy by tokenizing actual assets.

The essay also stated that NFTs should benefit the real economy by tokenizing real-world assets such as real estate and automobiles.

Meanwhile, Chinese tech behemoths are capitalizing on the NFT market’s strong success. Last week, Alibaba’s online mall launched an NFT moon cake — a dessert to commemorate the Chinese traditional celebration Mid-Autumn Festival — and it sold out in one day. In addition, Alipay sold two batches of NFT artworks in June and August, totaling 160,000 pieces on the day of issue. Tencent’s NFT platform “Huanhe” was also introduced in August.

Despite this, Chinese technological behemoths have been the subject of antitrust investigations for nearly a year. Alibaba was fined 18.2 billion yuan (US$2.812 billion) in April after being accused of monopoly. In July, the Market Supervision and Administration agency issued 22 antitrust fines to technology companies, including Alibaba, Tencent, and Meituan. The Central Commission for Discipline Inspection, China’s anti-corruption watchdog, published an article on its website on Saturday headlined “Set Traffic Lights for Capital Expansion,” demonstrating the government’s antitrust determination.

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Fees for Ethereum have Risen Dramatically

Yesterday, Ethereum’s average network fees increased by 300 percent, owing to the market’s fall and a hyped project’s minting event.

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Fees on the Ethereum network have risen yet more. This time, it appears to have been triggered by two different factors: the market’s fall and the impending release of a new NFT collection.

Since May, Ethereum fees have been at an all-time high

The costs on Ethereum’s network have soared yet again, with a 300 percent spike in a single day. According to YCharts, they were at their highest position since late May yesterday.

On September 7th, the average costs for Ethereum were $21.29.

The entire community took notice, with many claiming that there are cheaper choices available from competing businesses.

What Caused the ETH Fees to Increase?

Two factors could be at the root of the exorbitant ETH expenses. The marketwide collapse that we saw yesterday seems to be the most obvious explanation right off the bat.

Over $2.5 billion in long and short positions were wiped out in just a few hours. This occurred as Bitcoin fell below $43,000 and Ethereum fell below $3,000.

Such events trigger panic sellers. People are flocking to exchanges, especially decentralized ones like Uniswap, to liquidate their holdings and avoid more losses. As a result, the number of requests for transactions rises, pushing up the ETH fees. It occurs whenever there is a sudden movement in any direction.

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