Looks bare: OpenSea turns into NFT ghost-town after volume plunges 99% in 90 days

August 29, 2022 Coin Telegraph

BAYC

An ongoing debt crisis at lending platform BendDAO is also increasing the risks of the NFT bubble going bust.

OpenSea, the world's largest nonfungible token (NFT) marketplace, has witnessed a substantial drop in daily volumes as fears about a potential market bubble grow.

OpenSea volume plummets to yearly lows

Notably, the marketplace processed nearly $5 million worth of NFT transactions on Aug. 28 — approximately 99% lower than its record high of $405.75 million on May 1, according to DappRadar.

*OpenSea users, volume, and transactions statistics. Source: DappRadar*

The massive declines in daily volumes coincided with equally drastic drops in OpenSea users and their transactions, suggesting that the value and interest in the blockchain-based collectibles have diminished in the recent months.

That is further visible in the falling floor prices — the minimum amount one is ready to pay for an NFT — of leading digital collectible projects.

For instance, the floor price of the Bored Ape Yacht Club has dropped by 53% to 72.5 ETH on Aug. 28 versus a high of 153.7 ETH on May 1.

*BAYC floor price throughout history. Source: CoinGecko*

Similarly, the floor price of CryptoPunks, another top NFT collection, dropped almost 20% from its July high of 83.72 ETH.

NFT bubble is bursting

NFT prices are quoted in the native currency of the blockchain on which they are launched. So a digital collectible created on Ethereum will be purchased using Ether (ETH), which also means that NFT's prices will fall if ETH's market valuation plummets.

A bearish ETH market appears to be one of the primary drivers behind the poor NFT statistics. Notably, the price of one Ether has fallen from $4,950 in November 2021 to below $1,500 in August 2022.

*ETH/USD three-day price chart. Source: TradingView*

BendDAO votes to improve NFT liquidity

Last week, BendDAO, a decentralized autonomous organization that enables NFT owners to collateralize their digital collectibles to take loans (in ETH) worth 30%-40% of the NFT's floor price, voted to change its protocol's code to make its NFT collateral more liquid.

The vote occurred after a rise in Ether price increased the value of ETH-denominated loans in dollar terms. Meanwhile, on the other hand, NFT prices plummeted, reducing the value of the collateral held by BendDAO.

As a result, BendDAO is now facing its own debt crisis moment, where borrowers cannot pay their dollar-denominated loans due to falling ETH prices, and lenders are finding it difficult to recover their loaned amount due to falling collateral valuations.

BendDAO's latest vote has changed its NFT liquidation threshold from 95% to 70%. It has also reduced the time offered to borrowers to avoid liquidation from 48 hours to 4 hours to attract more bids for their NFT collaterals.

In other words, the floor price of NFTs, including BAYC, risks plunging further if the market's liquidity continues to dry u.

agreed, 2020-2021 was crazy get-rich-in-months & the DeFi-NFT-Web3 bubble is going bust now, turns out founders & VCs were scammers only in for the $$$.

But pipl said its over in 2018 too after ICOs.

The next bubble will come 100%, you just need to survive.
play the long game. https://t.co/5f17JfdFfY
— doncrypto (@DonCryptoDraper) August 29, 2022

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

BendDAO Hit by Insolvency Crisis as Ethereum Reserves Drained

August 22, 2022 The Crypto Briefing

BendDAO contract now has only 15 ETH left to pay lenders

August 22, 2022 Coin Telegraph

BendDAO

Many nonfungible tokens (NFTs) that were used as collateral in the platform have defaulted without any bids.

Lending protocol BendDAO has run out of Wrapped Ether (wETH) in its contract. At the time of writing, the contract only has 15 WETH to pay lenders, and an estimated 15,000 Ether (ETH) left to be paid to lenders.

Researcher NFTStatistics.eth dissected the issue in a Twitter thread, highlighting that NFT borrowers in the platform should now pay 100% interest on the ETH they borrowed. In addition, the debt positioned against the NFTs is also on the rise.

Furthermore, the researcher noted that many of the NFTs that have been used as collateral and defaulted currently have no bids. In relation to this, there are more NFTs on the platform's alert list, which are NFTs about to default and come to auction because of the falling NFT floor prices or rising debt and high-interest rates.

gm

While you were asleep the BendDAO bank run finally happened

15 wETH ($25,081) left in the wallet that had 18,000 ETH ($29,160,000) in it just 48 hours ago

Still 14,500 wETH owed to lenders....

Absolute shitshow pic.twitter.com/RKkdqVAVIf
— Cirrus (@CirrusNFT) August 21, 2022

According to the BendDAO co-founder, their team is working on a proposal to change parameters within the NFT lending platform. The update will take effect 24 hours after it gets approved through the voting process.

Amid the crisis, a Twitter user took the opportunity to poke fun at the platform, pointing out that even the co-founder of BendDAO is also on the verge of getting liquidated by their own lending platform.

Last week, analysts speculated that there might be an incoming series of NFT liquidations worth $55 million to recover loans on BendDAO. According to Double Studio founder DoubleQ, the situation could lead to a "death spiral" for the entire NFT market and the Bored Ape Yacht Club (BAYC) ecosystem.

Meanwhile, the broader NFT world is not doing any better. At the moment, as floor prices of BAYC and Mutant Ape Yacht Club (MAYC) collections took a nosedive, the newly launched GameStop NFT marketplace has taken a hit, with its daily fee revenue dropping below $4,000.

GameStop NFT daily fee revenue plunges under $4K as gloom infects markets

August 22, 2022 Coin Telegraph

GameStop NFT daily fee revenue plunges under K as gloom infects markets

BAYC

GameStop NFT has generated roughly $166,800 worth of sales volume over the past 24 hours, with the platform charging only a 2.25% fee on NFT sales, the figure equates to just $3,753 worth of revenue.

Daily revenue for GameStop’s nonfungible token (NFT) marketplace has plummeted to under $4,000, suggesting that interest in the platform has waned significantly since launching in mid-July.

According to data from DappRadar, GameStop NFT has generated roughly $166,800 worth of sales volume over the past 24 hours. With the platform charging only a 2.25% fee on NFT sales, the figure equates to just $3,753 worth of revenue during that time.

DappRadar’s limited data on GameStop appears to confirm figures actually plunged down to around $2000 as trading volume has pumped 91.23% over the past day.

The latest figures mark a significant decrease from the project’s first full day of business on July 13, with an NFT sales volume of $1.98 million, equating to about $44,500 worth of fees.

At the time of writing, the HyperViciouZ project on GameStop has generated the largest 24-hour sales volume of 29.78 Ether (ETH) worth roughly $47,841. In comparison, OpenSea’s top-selling project during that time frame is Pudgy Penguins with 860.8 ETH, or $1.37 million.

Broader doom and gloom

GameStop isn’t the only part of the NFT world struggling at present. According to data from NFT Price Floor, the Bored Ape Yacht Club (BAYC) floor price has dropped a hefty 19% since the start of August to sit at 68.48 ETH, or $109,900 as of Aug. 22, while the Mutant Ape Yacht Club (MAYC) floor has plunged 28.6% to 11.2 ETH, or $17,986.

Since the BAYC and MAYC’s respective all-time floor price highs of 153.5 ETH and 41.2 ETH in May and April, the floors have dropped 55% and 72% each.

NFT analysts warned that $55 million worth of blue chip NFTs were at risk of liquidation on BendDAO last week.

The BendDAO platform enables users to deposit their NFTs and take ETH loans out against the floor price of their assets. The loans total around 30-40% of the deposited NFT floor price. However, if the price drops so low that the loan equates to 90% of the floor price, the depositor has 48 hours to pay the loan down to avoid their NFT being liquidated and sold off via auction.

The platform represents this threshold as a health indicator in which a score below one triggers the NFT liquidation proceedings. As of last week, there were at least 20 loans against BAYC NFTs that had a health indicator fall perilously close, below 1.01, and a lot more for Mutant Ape Yacht Club NFTs as well.

At the time of writing, two BAYC NFTs have been liquidated this week and put up for auction, while 10 are playing with fire with health indicators ranging from 1.01 to 1.06. However that’s half the number from last week, suggesting the situation has improved.

In terms of loans against MAYC NFTs, there are currently 14 in severe danger of liquidation, with health indicators ranging from 1.01 to 1.03. There are also 13 that have recently been liquidated and are up for auction on BendDAO.

So far this month, the floor price for other top NFT projects such as CryptoPunks has tanked a fair amount as well. Despite surging from 68.3 ETH on Aug. 1 to 77.4 ETH on Aug. 4, the CryptoPunk floor has since retraced back down to 66.45 ETH, or $106,518.

BendDAO

OpenSea volume plummets to yearly lows

NFT bubble is bursting

BendDAO votes to improve NFT liquidity

Broader doom and gloom

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