A new report revealed that a large portion of Ethereum-based non-fungible tokens, (NFTs), is held in the possession of very few addresses on the network.
Moonstream, an open-source blockchain analytics company, published the report on October 21. It focused exclusively on NFTs using the ERC721 token standard. The study covered more than 7,000,000 NFT transactions on Ethereum blockchain between April 1, 2021, and September 25, 2021.
NFT Distribution on Ethereum: Inequality
Moonstream’s document indicates that 16.71% of addresses performing NFT transactions on Ethereum blockchain have a staggering 80.98% of NFTs.
It was also noted that 16.71% is the number of NFT platforms or exchanges that deal in thousands of these digital tokens at once.
The report said that “there is also a great inequality in the Ethereum NFT Market in the sense the top 16.71% NFT owners own 80.98% of NFTs.”
This high percentage of addresses handling NFTs on Ethereum leaves 83.29% of remaining holders with a mere 19.02% share of tokens.
Low entry barriers
The paper pointed out inequalities in the distribution of NFTs but also stated that there is still a market for both small- and large-scale investors.
It stated, “What this data reveals is that Ethereum NFT market in the sense that the vast majority of its participants is small-time buyers who most likely make their purchases manually. For those who want to join this market, there are very few barriers to entry.
In the last few months, NFT has seen a boom in popularity and millions of people are interested, including collectors, developers and investors. Exchanges are also jumping on this trend.
As institutional investors join the NFT mania, excitement is growing and sales are at record highs. The NFT market generated $10.7 billion in sales between July and September.
Marla Brooks – Financial Analysis
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