Mapping the NFT revolution: market trends, trade networks, and visual features

Nadini, Matthieu; Alessandretti, Laura; Giacinto, Flavio Di; Martino, Mauro; Aiello, Luca Maria; Baronchelli, Andrea

doi:10.1038/s41598-021-00053-8

Cited by 405 publications

(234 citation statements)

References 25 publications

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“…Similar scaling laws hold true for NFTs [8] as well, e.g. scaling of number of sales per NFT or number of assets per collection seem to scale both close to 3/2 (1.4 and 1.5).…”

Section: Scaling Relationships For Cryptocurrenciesmentioning

confidence: 54%

Darwin Among the Cryptocurrencies

Meister¹,

Price²

2022

Preprint

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The paper highlights some commonalities between the development of cryptocurrencies and the evolution of ecosystems. Concepts from evolutionary finance embedded in toy models consistent with stylized facts are employed to understand what survival of the fittest means in cryptofinance. Stylized facts for ownership, trading volume and market capitalization of cryptocurrencies are selectively presented in terms of scaling laws.

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“…Similar scaling laws hold true for NFTs [8] as well, e.g. scaling of number of sales per NFT or number of assets per collection seem to scale both close to 3/2 (1.4 and 1.5).…”

Section: Scaling Relationships For Cryptocurrenciesmentioning

confidence: 54%

Darwin Among the Cryptocurrencies

Meister¹,

Price²

2022

Preprint

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“…The literature on the identification of wash trading patterns in the cryptocurrency markets primarily emphasizes CLOB models on decentralized exchanges [9] and centralized exchanges, where wash trading practices have been shown to be especially prevalent [6,7,8]. Perhaps because the introduction of CFMMs has nearly eliminated the efficacy of wash trading in smart contract-based markets for fungible assets, research on NFTs tends to emphasize either market dynamics and pricing [13,14] or the technical design considerations [15,16]. Thus far, little academic research has examined market abuse in smart contract-based NFT markets [17].…”

Section: Literature Reviewmentioning

confidence: 99%

NFT Wash Trading: Quantifying suspicious behaviour in NFT markets

Wachter¹,

Jensen²,

Regner³

et al. 2022

Preprint

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The smart contract-based markets for non-fungible tokens (NFTs) on the Ethereum blockchain have seen tremendous growth in 2021, with trading volumes peaking at $3.5b in September 2021. This dramatic surge has led to industry observers questioning the authenticity of on-chain volumes, given the absence of identity requirements and the ease with which agents can control multiple addresses. We examine potentially illicit trading patterns in the NFT markets from January 2018 to mid-November 2021, gathering data from the 52 largest collections by volume. Our findings indicate that within our sample 3.93% of addresses, processing a total of 2.04% of sale transactions, trigger suspicions of market abuse. Flagged transactions contaminate nearly all collections and may have inflated the authentic trading volumes by as much as $149,5m for the period. Most flagged transaction patterns alternate between a few addresses, indicating a predisposition for manual trading. We submit that the results presented here may serve as a viable lower bound estimate for NFT wash trading on Ethereum. Even so, we argue that wash trading may be less common than what industry observers have previously estimated. We contribute to the emerging discourse on the identification and deterrence of market abuse in the cryptocurrency markets.

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“…So far, NFTs have mostly been used to commodify digital objects in art, gaming, collectables, metaverse, utility and, more recently, in decentralized finance (DeFi). The first and most well-known example of an NFT is CryptoKitties, a collection of creative photos of virtual cats that are utilized in an Ethereum game that allows users to buy, collect, breed, and sell them on Ethereum (Nadini, Alessandretti, Giacinto, Martino, Aiello and Baronchelli, 2021). CryptoKitties blocked the Ethereum network in December 2017.…”

Section: The Emergence Of Nfts and Defi In Financial Marketsmentioning

confidence: 99%

NFTs Emergence in Financial Markets and their Correlation with DeFis and Cryptocurrencies

Alawadhi

Alshamali

2022

AEF

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Non-fungible tokens (NFT) have been defined as digital assets that encode items such as art, collectables, and in-game goods. They are often stored in smart contracts on a blockchain and are exchanged online, frequently using Bitcoin. As NFT became increasingly popular in the last few years, decentralized financial assets (DeFi) tokens also started receiving growing attention as financial instruments that differ from NFTs and cryptocurrencies. Based on data on NFTs, DeFi tokens, and cryptocurrency daily prices between January 15th and December 6th, 2021, we examine the correlation between NFTs, DeFi tokens and major cryptocurrencies such as Bitcoin and Ethereum. Using the volatility spillover matrix approach by Diebold and Yilmaz (2012) as applied by Dowling (2021) and including DeFis into the discussion, we find that there is very limited spillover to and from non-traditional financial markets. Also, DeFi assets appear to be relatively unconnected to cryptocurrency markets. Following the methodology by Karim, Lucey, Naeem and Uddin (2021) of the quantile connectedness approach and the cross-quantilogram model of Han, Linton, Oka and Whang (2016), we determine that positive DeFi and Crypto spillovers exceeded negative NFT spillovers. This paper concludes that both NFTs and DeFi assets show significant potential in terms of portfolio diversification since they display low correlation with cryptocurrencies, especially in the case of DeFis thanks to it being disconnected from other assets in the market, based on this year's data. This has significant implications for investors who seek to diversify their portfolios by including cryptocurrency, NFTs and DeFis as assets.

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Mapping the NFT revolution: market trends, trade networks, and visual features

Cited by 405 publications

References 25 publications

Darwin Among the Cryptocurrencies

Darwin Among the Cryptocurrencies

NFT Wash Trading: Quantifying suspicious behaviour in NFT markets

NFTs Emergence in Financial Markets and their Correlation with DeFis and Cryptocurrencies

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