A report published earlier this month by NFTevening said that the market for NFTs has been in such a dramatic downturn since 2023 that 95 percent of them are considered “dead,” with the average NFT owner experiencing a 44.5 percent loss on their investment.
According to NFTevening, the research was conducted with by examining more than 5,000 NFT collections and 5 million transactions from NFTScan, the NFT data infrastructure that provides data services for Web3 developers.
The criteria for determining NFT mortality rates included Twitter activity, trading volume, and seven-day sales rate. A trading volume equal to 0, with no activity on social media and less than 20 sales in seven days, means that particular token is ready for the morgue.
By considering an NFT’s domain registration date and the last time it was mentioned on Twitter, the study concluded that the average lifespan of an NFT is about 1.14 years, 2.5 times less than the average lifespan of more traditional crypto projects. “This short lifespan reflects the intense speculative nature of NFTs, where rapid price fluctuations and the novelty of digital assets fail to sustain long-term value,” the report said.
The most profitable NFT collection at the moment, according to the report, is the Azuki collection, holders of which have seen a profit of 2.3 times their investment. On the other end of the spectrum, collectors who bought in to the Pudgy Penguins collection have seen a dizzying 97 percent loss.
“The data paints a clear picture: the NFT market previously praised as the future of digital ownership and investment, is encountering significant difficulties,” the report concludes. “The high unprofitability rate among holders, the stark contrast between successful and failing collections, and the short lifespan of NFTs all suggest that the market may not be the golden goose many had hoped for.”
