The total number of NFT-focused smart contracts on Ethereum ultimately reached a new all-time high – however, they are still a fraction of the ecosystem.
The number of Ethereum ERC-721 smart contracts, which is the backbone of most non-fungible tokens (NFTs) on the blockchain, had reached a new ATH on the tail of the recent NFT boom.
As the report stated, the number of ERC-721 smart contracts had recently reached a new all-time high of around 19,000 as a result of the latest “NFT craze.”
ERC-721 is the Ethereum standard for creating NFTs. They have been used to create digital items with scarcity, it includes artwork, video game assets, and music. In recent months, the NFT space had expanded noticeably, with trading volume across the three NFT marketplaces reaching $342 million only in February, up from 412 million in December 2020.
“The NFT market has gone from virtually non-existent to a flourishing multi-million dollar decentralized marketplace just in the last few months,”
analyst Mati Greenspan, founder of crypto analytics outfit Quantum Economics
But notwithstanding the uptick in sales volume, NFTs remain a relatively small slice of the Ethereum pie chart. Though the number of ERC-721 contracts has surged to around 19,000, they are a “small fraction” of the 17.84 million smart contracts now deployed on Ethereum.
Is this only the early days, or a bubble waiting to burst?
Even though the fact that NFTs are much more expensive than the other tokens on average, the relatively small number of deployed ERC-721 contracts – similar to the Ethereum ecosystem as a whole – suggests that the sector is still in its early days when it comes to mass adoption.
“Considering the growing public interest towards NFTs and the growth of the metaverse market, the NFT technology has high prospects of scaling and evolving,”
Petr Kozyakov, co-founder and CBDO of payment network Mercuryo
He then suggested that the NFT market can peak as high as $40 billion by the end of 2021. But the other experts argued that the extraordinary prices paid by some collectors for NFTs have overinflated the market.
The executive director of crypto exchange CEX.IO, Konstantin Anissimov, stated that the core development and use case of the entire NFT technology is yet to be finally discovered, integrated, and tapped.
For the meantime though, he argued that “there are clear indications that the NFT market is hyper-inflated in terms of the unprecedented valuations of some of the items sold thus far, including Beeple’s EVERYDAYS: THE FIRST 5000 DAYS, which sold for $69.3 million.”
Beeple is inclined to agree, describing the NFT space as “a bubble” in a latest interview.
“We will likely see many peaks and troughs but there’s no doubt this technology is here to stay,” Greenspan wrapped up.
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