Data Acceptability in the NFT market

  • Crypto Guru
    March 12, 2023, 19:12

Non-fungible tokens, NFTs, are unique digital assets built on smart contracts and backed by blockchain technology. There are multiple platforms and NFT marketplaces that offer new digital art collections, gaming, music, and video NFTs.

Since 2020, the market has been growing rapidly, with every new NFT collection being more exclusive and extraordinary than the last. According to the International Journal of Information Systems and Social Change, in Q2 2022, the total volume of NFTs reached $12.22 billion. Findstack shares that the NFT market is now worth more than $40 billion, and that’s not even an all-time high!

However, that lack of NFT data acceptability significantly slows down and complicates the growth of the NFT market. In this new article, Grapherex analysts will look at what NFT data is and explore how to make it more transparent and convenient to use.

Why Is the Lack of NFT Data a Problem?

The non-fungible token market encountered several problems even before it saw mass adoption. Even though the broader crypto industry has many resources available, the NFT market is still in its early stages and lacks suitable means to track collections, analyse statistics, and observe market trends.

The lack of standardised data formats and metadata further worsens the issue and makes it challenging for buyers and sellers to share information on ownership history and provenance. Without this data, making informed purchasing decisions and accurately pricing NFTs becomes difficult for all parties.

The highly fragmented NFT market, with thousands of different collections and individual NFTs available for purchase, is one cause of the problem. This makes it almost impossible for any single resource to provide a comprehensive view of the entire market.

Where Can I Find NFT Data?

NFT data refers to all information related to non-fungible tokens – it includes various details about NFTs: ownership history, transaction history, sales, prices, provenance, information about the creator, contract addresses, and other metadata. This can be useful for tracking market trends, analysing the performance of the NFT collection of your choice, estimating the value of NFTs, and much more.

You can get NFT data from several sources:

  1. NFT marketplaces: OpenSea, SuperRare, Rarible, etc.
  2. Blockchain explorers: Etherscan, BscScan, PolygonScan, etc.
  3. NFT analytics platforms: DappRadar, CryptoSlam, bitsCrunch, Nansen NFT analytics, etc.
  4. Social media: mainly NFT projects and communities on Twitter and Discord.

Of course, not all NFT data sources are reliable and accurate, especially fan portals, where users get awards for participation in discussions. Make sure to check the data via several sources to verify it.

How Can Data Acceptability Improve the NFT Market?

Improving the availability of data in the NFT space can contribute to creating a more mature and efficient market where buyers and sellers can make informed decisions based on a complete understanding of what is going on.

Standardised data formats will facilitate the comparison and analysis of various NFT collections, creating greater consistency and predictability in the market. The comprehensive view can stimulate growth and innovation, which over time, will lead to wider adoption and participation.

Here are a few ways in which specialised NFT analysis resources could help the market:

  • Market Analysis. When buyers and sellers have access to relevant data on NFT collections and market tendencies, they can better analyse the market and define emerging trends and investment opportunities.
  • Transparency. This feature of blockchain technology positively influences crypto adoption and is also helpful with NFTs. The existence of a simple method for accessing data on NFT ownership history, origin, and other details increases trust and transparency. This, in turn, helps buyers make more informed choices and decisions.
  • Liquidity. Enhanced data availability can make it easier to trade NFTs. By connecting buyers and sellers, a clear and transparent market sees more transactions, which may indirectly have a positive impact on market liquidity.
  • Prices. Sellers often struggle with NFT pricing because they do not have enough information to determine a fair price for their collectables. Meanwhile, buyers also don’t know whether a collection is undervalued or overpriced. Better data accessibility will be a game changer.

How Do NFT Analytics Work?

According to the popular crypto media platform, Cointelegraph, the growing demand for NFT analysis tools will soon be met. Many NFT-centric analytic companies like bitsCrunch create solutions to address the challenges of data accessibility.

Valuable insights, statistics, infographics, in-depth market reports, and relevant statistics provided by their AI-powered platform, Unleash NFTs, are of great help to NFT investors, developers, and crypto enthusiasts in making decisions about their investments.

The top three values of bitsCrunch are accuracy, transparency, and accessibility. Important indicators – market cap and trading volume – are updated regularly, reliable AI-powered solutions create trust in the ecosystem, and anyone can access their product from any place in the world.

Additionally, analytic tools not only gather data but verify it, identifying wash trading, an activity where traders create artificial demand for an NFT. They check suspicious transactions and identify those NFTs for which demand is growing due to numerous purchase and sale orders. This is a great safety measure that helps market participants avoid malicious activity.

How Big Data Technologies Influence NFT Data Acceptability

The use of technologies and big data can effectively address many of the current challenges in the NFT sphere. Big data is characterised by velocity (high-speed data collecting and processing), volume (large amounts), and variety (different types of data – images, texts, gifs, etc.). Thus, big data can mitigate high volatility and limited research.

Researchers are now trying to build a comprehensive database using big data that will be powerful enough to be a foundation for subsequent analytical tasks, including machine learning and deep learning. Predictive analysis, potentially obtained as a result of their studies, will help address the challenge of unpredictability by identifying patterns in price fluctuations, trading frequency, and social media trends. Such an approach provides researchers with a comprehensive understanding of the market structure and reasons for irregular changes.

Key Takeaways

NFT data is everything related to a single NFT or a certain collection of digital assets. It includes prices, ownership and trading history, sales volume, and other information. Anyone interested can find this data on NFT marketplaces, blockchain explorers, analytic platforms, and social media.

Unfortunately, it may take a lot of time and effort to find enough reliable data, as there are no standard data formats, and there is a lack of NFT-centric companies that analyse this sphere. Since data acceptability brings greater consistency and predictability, the market needs new instruments to offer clearer information.

Today, specialised analytic platforms like bitsCrunch and Big Data technologies can be helpful. New platforms and tools offer better market analysis, transparency, and increased liquidity. Grapherex analysts predict that there will be more tools launched to collect and evaluate NFT data from different sources in the coming years.