The Yuga Labs Otherdeeds NFT mint is perhaps the crowning jewel in an NFT movement that has snowballed in the past year. NFT sales volume surpassed $40 billion in 2021, up from just $74 million at the start of the year. In comparison, the global art market accrued $65 billion in sales, representing a modest 29% growth from its pandemic lows in 2020.
However, despite this unprecedented growth in NFT sales, NFTs remain a relatively nascent asset class. Moreover, unlike their cousins — cryptocurrency — NFTs have yet to evolve significantly beyond static content ownership or passports and generally do not have productive mechanisms such as liquidity pools or staking to enhance holder value over time. In fact, most NFTs are currently arbitrage opportunities, and most traders seemingly lose money on NFT transactions. In December 2021, Chainanalysis found that only 5% of NFT traders have received 80% of the profits generated on Opensea, and only 20% of active wallets have initiated 80% of secondary NFT sales. Furthermore, acquiring more promising NFTs tends to be prohibitively expensive, and 80% of NFTs sell for less than $10,000, while sub-$10,000 NFTs account for just 11% of the total trading volume.