By James Davis
2023 has been a transformative year for non-fungible tokens (NFTs). It started with the introduction of Ordinals on the Bitcoin blockchain, and then we witnessed the rise of NFT marketplace Blur. Here are some of the biggest NFT stories that made headlines this year.
Ordinals Protocol Emerges
This was definitely the biggest NFT topic in 2023. Developed by Casey Rodarmor, Ordinals is a protocol that allows users to inscribe text files, videos, and images to individual satoshis and then list them on NFT marketplaces.
As of December 31, 2023, the Ordinals protocol has processed over 52 million inscriptions. Moreover, it now facilitates the creation of BRC-20 tokens. Although some Bitcoin maxis have argued that the emergence of Ordinals has led to network congestion, it appears that the protocol is here to stay as several big NFT companies explore the possibility of launching projects on Bitcoin in the future.
Tensor and Blur Take Over
Tensor and Blur have given the leading marketplaces a run for their money this year. In early 2023, Blur surpassed OpenSea in terms of trading volume after issuing token incentives to traders. Blur has conducted two airdrops this year, amounting to $800 million. The marketplace now routinely controls 75% of the Ethereum NFT market.
As Blur continues to dominate the NFT space on Ethereum, OpenSea, on the other hand, has suffered financially. It had to lay off some of its employees in November.
On Solana, a similar change has happened as leading NFT marketplace Magic Eden was overtaken by Tensor, which uses the same reward model as Blur. Even without conducting an airdrop, Tensor has continued to control 52% of the NFT trading activity on Solana.
Securities and Exchange Commission Takes Action
The US Securities and Exchange Commission (SEC) did not only go after crypto exchanges but also NFT projects. The regulator has labeled several NFT collections as unlicensed securities this year. One notable NFT project that encountered a regulatory attack from the SEC was Impact Theory. The Tom Bilyeu-owned NFT startup had to pay $6 million to settle charges with the SEC following accusations it sold its Founder Key NFTs as unregistered securities.
The SEC then leveled charges against Stoner Cats. The NFT project, which is backed by Mila Kunis, paid $1 million in penalty fees and agreed to shut down.
Trump NFTs Decline in Value
Former United States President Donald Trump launched his first NFT collection last December. Although largely mocked, it was a hit, selling out within 24 hours. Moreover, the NFT project posted millions of dollars in trading volume on various NFT marketplaces.
However, the NFT collections that Trump and his team have launched this year have struggled to sell out. Additionally, their prices have declined massively.
“The Goose” Sells for Over $6 Million
Demand for “blue chip” NFTs remained considerably high in 2023. That is evidenced by a $6.1 million NFT sale in June. The Goose, an NFT from the Ringers collection, changed hands at that price during a live Sotheby’s auction. It’s the leading NFT sale this year.
Several NFT Marketplaces Abandon Royalties
A number of NFT marketplaces stopped enforcing creator royalties this year. In 2022, OpenSea announced its plan to quit honoring such royalties, but due to backlash, the marketplace decided to continue to enforce them. However, after Blur took charge of the Ethereum NFT space even without enforcing creator royalties, OpenSea said in August that it would no longer honor the royalties.
DeGods Leaves Solana
When the Solana ecosystem almost collapsed earlier this year due to its association with FTX founder Sam Bankman-Fried, several projects, including DeGods, departed for other ecosystems. However, the DeGods’ move to Ethereum has not been as successful as expected. The NFT collection’s floor price has dropped from $16,203 to $7,208 as many continue to criticise the team behind DeGods for under-delivering.
Making matters worse for the DeGods NFT project is the fact that Solana has recently made a massive comeback, which has led to the floor price of NFT project Mad Lads doubling that of DeGods.