What is fuelling NFT Craze on Ethereum?

Highlights

• The Ethereum Name Service (ENS) has seen a significant rise of late.
• The Eth domain name sales on OpenSea saw a massive spike of over 2,300%, with users queuing to purchase unique and coveted three and four-digit names.
• The ENS has shot to US$3 million between 22 April and 27 April from US$700,000 from 14-21 April, as per its developers.

When the non-fungible tokens (NFTs) boom happened last year, Ethereum was one of the most preferred platforms chosen by the developers. Many joined the NFTs because of craze, few for the fear of missing out.

Many experts believe that going forward NFTs could rule the roost on Ethereum Network, resulting in congestion of the network. So, it was not a surprise when Ethereum attracted a significant number of institutional investments on the back of the NFT boom.

With other blockchain networks, such as Solana offering a better and more cost-effective way to develop NFTs than Ethereum, its market dominance in the space showed signs of retrace. The daily sales have seen a drop from US$160 million in January to $38 million in April, as of 29 April according to NFT tracker NonFungible.

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As the overall sales figures are disappointing, the demand for Ethereum domain sales seems to be presenting a contradictory figure. The Ethereum Name Service (ENS) has seen a significant rise of late. ENS is primarily the domain name provider for the Ethereum blockchain The Eth domain name sales on OpenSea saw a massive spike of over 2,300%, with users queuing up to purchase unique and coveted three and four-digit names.

What do the numbers indicate? 

Lead ENS developer nick.eth said the ENS has shot to US$3 million between 22 April and 27 April from US$700,000 from 14-21 April. In the last one week, the ENS domain registrations saw a significant rise of over 119%, with the total number of active .eth names rising by 7%.

Unique and coveted .eth names are selling at astronomical prices, with three-digit ENS names requiring six Ethereum tokens each. In fact, nick.eth pointed out that some of the users are buying ENS names, such as 887.eth for US$26000, 555.eth was sold for US$160,000.

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Celebrity endorsement 

The .eth sales have also been buoyed by celebrity endorsement. The primary example is Ethereum co-founder Vitalik Buterin, who has his id as vitalik.eth. Some of the big names include Paris Hilton, Coinbase CEO Brian Armstrong, Jimmy Fallon, etc.   

The ENS sales bode well for the NFT sector, considering the ENS has been garnering a massive 446 Ethereum, or about US$1.3 million, in secondary sales on NFT marketplace OpenSea. With the NFT market expected to reach US$800 billion in the next two years, the growth in the space may perhaps also help in pushing Ethereum to the next level.

Though the numbers look good, one must also be wary of the constant changes in the crypto market, along with the volatility factor. Market participants should move ahead with caution and conduct market research before making investment decisions. 

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