Following a remarkable boom in 2022, the hype surrounding non-fungible tokens (NFTs) is fading, with a recent report revealing that 96% of NFT collections are now considered dead.
Researchers analyzed 5,000 NFT collections and tracked approximately 5 million transactions, examining metrics such as holder profitability, collection performance, and project longevity to reach this conclusion.
Report Shows 96% of NFT Projects Are Dead
Research from NFT Evening reveals that 96% of NFT projects are considered dead, with 43% of holders currently unprofitable. On average, NFT holders are facing a 44.5% loss, and the typical lifespan of an NFT is just 1.14 years — 2.5 times shorter than that of crypto projects. Notably, nearly one-third of NFT projects “died” in 2023, marking a record-high failure rate.
The Azuki collection ranks as the most profitable NFT digital collectible, with holders seeing a ROI of over 2.3X. Azuki’s “strong community engagement and effective marketing strategies” drive its high profitability, sustaining interest and turnover in the collection.
In May, BeInCrypto reported that Azuki NFT sales soared to record highs, reaching $1.13 million in a single month, with total sales surpassing $1.12 billion. This continued success highlights a strong, lasting interest in high-value NFTs. According to Cryptoslam data, other popular NFT collections, such as CryptoPunks and Bored Ape Yacht Club, also remain top choices.
Read more: 7 Best NFT Marketplaces You Should Know in 2024
In contrast, the Pudgy Penguins collection is classified as one of the “dead” projects despite its strong performance in May. Research shows that holders of Pudgy Penguins NFTs are currently experiencing significant losses, with a stark 97% decline.
Disparities in holders’ profit and loss rates, the gap between successful and failing collections, and variations in project lifespan reveal that the NFT market is no longer the golden goose it once appeared to be.
“It is true that the majority of PFP style NFTs have lost most of their value, which is fair and expected given that most were derivative of a few innovative early projects in the first place. This is true of crypto tokens as a whole as well. There is a well known dynamic across multiple crypto market cycles where innovation and price increases draw in speculators which pushes up many worthless derivative tokens, but which then funds the next cycle development and innovation,” Theta Labs Head of Strategy Wes Levitt told BeInCrypto.
Read More: 10 Best NFT Marketing Agencies To Promote Your Digital Art
Meanwhile, the Trump NFT collection continues its growth with the release of a fourth series, “America First.” Additionally, Tron founder Justin Sun has announced plans to launch his own NFT project on the blockchain
With the report showing big differences in how NFT projects perform, investors need to do careful research. Issues like rug pulls, where projects disappear with investors’ money, and wash trading, which fakes demand, are common in the NFT space. Plus, the legal rules around NFTs are still unclear, making it risky for people thinking about entering the market.
“The PFP side of NFTs was always on the speculative end of things by its nature, but the funds coming into the space have also supported more meaningful NFT projects. In the future, NFTs that aim for longstanding value will need to provide benefits in ownership rather than relying on hype and speculation,” Levitt added.
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