🧘‍♂️The Next Big Thing

Market Meditations | March 30, 2022

Dear Meditators

Last week we broke down the NFT sector targeting a traditional, luxury market: art. This week we are going to dive into a sector that is targeting a futuristic market – the metaverse. We will first define the metaverse before considering how the sector’s NFTs have performed and providing a full breakdown so that anyone can find opportunities for profit.

Today’s Meditations: 

  • The Next Big Thing → Metaverse Deep Dive Using Nansen
  • Hacksy Infinity → Check out our research & coverage of the Ronin Exploit
  • Welcoming Solana NFTs to OpenSea
  • Our Latest Podcast with the Founder of Nomad Capital

⏰ Top Headlines


? Meta First

The metaverse can be defined as a network of virtual worlds that is looking to replace what is currently possible in the physical world including gaming, entertainment and commerce. NFTs allow those interacting with the metaverse to prove ownership of assets – an essential building block of any virtual world.

Nansen uses its data to sort metaverse NFTs by market cap, including the top 20 collections in the index.

Performance over 30 days

Nansen.ai:  30/03/2022 – NSN-META20  30 day performance

  • The Metaverse NFT index has grown by 53% in the last 30 days, skyrocketing in the last 4 days after growing by 57%.
  • Over the last week, the index has significantly outperformed the rest of the NFT market which has remained stagnant.

Breakdown of Sub-Sectors

Nansen.ai: 30/03/2022 – NSN-META20 Market Cap By Category

  • The total market capitalization of the top 20 NFT collections in the sector is 701k Eth or $2.4bn
  • Asset: Virtual objects that exist in virtual worlds.
  • Land and Real Estate: Just in the physical world, virtual worlds have “land” and “buildings” that generate economic opportunities. These NFTs represent ownership of such assets.
  • Avatar: Characters through which participants can interact with the metaverse.
  • Utility: NFTs that provide a use-case in the metaverse (e.g. access to events).

Largest Projects

Nansen.ai: 30/03/2022 – NSN-META20  Index Activity (sorted by Market Cap)

  • The largest NFT collection within the sector represents assets in The Sandbox Game. This project facilitates user-built content and therefore acts as key infrastructure in the form of building blocks for the metaverse.
  • 3 of the top 5 collections represent this “base layer”. The potential profits for the project that dominates this narrative will likely be immense so new entrants to this index should be monitored.

Tip: Nansen allows us to dive even deeper into individual projects, understanding price movements and whether any of the top performing crypto investors are involved.

Conclusion

The metaverse acted as a major driver to the crypto ecosystem in 2021 with the sector seeing adoption from traditional businesses such as Facebook and partnerships with international brands such as Adidas and Nike.

Whilst there is often a lag between the price action of assets that promise to deliver the future, and the actual delivery of that future, the sector shows no signs of slowing down over the long run.


♾️ Hacksy Infinity

It’s the biggest DeFi hack of all time and nobody noticed for nearly a week.

Seven days ago over $600 million dollars worth of crypto assets were drained from the Ronin network and are largely sitting untouched. But there has been some movement of funds:

  • It was only yesterday when a user tried to withdraw 5000 ETH that the Ronin team noticed that the bridge contract had been exploited.
  • In a community alert, the network supporting Axie Infinity announced that 173,600 ETH and 25.5M USDC had been stolen and that they were halting the Ronin bridge and Katana DEX contracts.
  • The exploiters managed to get access to five of the nine validator nodes required to confirm a transaction and generated a forged withdrawal to their wallets.
  • They used hacked private keys to access four of the nodes run by parent company Sky Mavis, and then exploited a backdoor in some old code to access a node run by Axie DAO.
  • All of the USDC was converted to ETH via UniSwap and about $20 million of ETH has been moved out of the original wallet, mostly sent to Huobi and FTX exchanges.
  • The team is now working with law enforcement, forensic cryptographers and investors to try to recover and reimburse funds. None of the AXS, RON or SLP has been exploited, although their values have taken a 10-20% tumble following the news.

It remains to be seen whether the funds will be recovered or not. A leveraged short and a white hat bounty might have been the aim all along. Unless of course, it’s Lazarus again…


?Will Solana Get Sea Legs?

Yesterday, OpenSea posted a teaser video on Twitter, hinting that Solana NFT integration was coming soon. With no launch date specified, the video ends with a hint that integration will happen in April. OpenSea currently supports the trading of NFTs on 3 chains:

  • Ethereum
  • Polygon
  • Klatyn

Solana NFTs have been trading on marketplaces Magic Eden, Solanart, and Solsea, which have been great for the collections on Solana but the largest marketplace for NFTs is still OpenSea. According to data reported by the Block, the $3.18 billion of NFT sales in March, $2.4 billion was attributed to OpenSeaMagic Eden, the most popular Solana marketplace, only recently broke $100 million in volume in February, tripling that in March.

Competitor platform LooksRare, started their vampire attack off with a banging $2.49 billion worth of volume in January, but they have steadily declined to $383 million in March. Figures that do not bode well for the wash trading accusations made against the platforms.

For now, the market remains fragmented, forcing collectors to go to chain-specific marketplaces, much like they must hold the NFTs in chain-compatible wallets. If OpenSea can continue to achieve its cross-chain compatibility goals, taking market share along the way, it will only get harder and harder for anyone to truly catch up with the first-mover.


? Becoming a Global Citizen with Nomad Capitalist 

? Click Here to Listen

Andrew is the founder of Nomad Capitalist.


With Nansen’s On-Chain data, you get an edge over everyone else by tracking the behaviour and on-chain activity of prominent wallet addresses.

  • Exciting New Opportunities. Follow the Smart Money, identify new projects, and trace transactions down to the most granular level.
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  • Track The Biggest NFT Traders. See what the most profitable NFT wallets are investing in.

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??‍♂️✍️ Stories in this newsletter were written by D. BeverlyIsambard FA, Nick T., Max P., Kimia K., Ellen B. and Koroush AK. Graphics were produced by Ellen B.


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