💎 NFT Volume

Understanding trends in NFT transaction activity provides insight into rising and declining demand dynamics in the NFT market. The key on-chain metric tracked is:

ERC-721 Token Transfers

• Logs daily transfer volume for the ERC-721 NFT standard

• Mostly captures NFT collectibles and digital artworks

• Distinguishes between transactions and component transfers

As the ERC-721 standard powers the majority of existing NFT projects, its transfer flows proxy the aggregate market behavior rather effectively. This enables gauging speculator sentiment, flipper activity, new adopter influx, and other datapoints.

For example, a massive spike in ERC-721 transfers took place in November 2019 stemming from a single NFT-based trading card game distributing millions of cards. Such events illustrate the impact application layer user behavior tied to NFT services can directly have on the underlying on-chain activity.

Monitoring ERC-721 transfers facilitates broadly keeping a finger on the pulse of overall NFT market momentum, charting growth and decline phases, and factoring those conditions into any adjacent crypto asset strategies involving NFT exposure.