CoinGecko

Utility and long-term profits top reasons for NFT purchases: CoinGecko study

People purchase NFTs for various reasons, but according to a new survey from CoinGecko, the majority buy them for utility and long-term profits.

Utility and long-term profits have been ranked as the top reasons for buying nonfungible tokens (NFTs), according to a survey conducted by CoinGecko and Blockchain Research Lab.

An April 10 CoinGecko report found most considered how much utility an NFT collection offers and the benefits of holding the token before buying, with over 77% of respondents saying using an NFT for its “intended function” had some level of importance out of the 11 listed reasons for buying an NFT.

However, 15.7% responded they were “neutral” about utility, and 6.7% felt it was “not important” in the decision-making process before buying an NFT.

The survey recorded 343 responses from NFT and crypto users who ranked their top reasons for buying NFTs. Source: CoinGecko

The potential for long-term profits came in as the second most crucial factor, with just over 76% of respondents giving importance to selling their NFTs at a higher price later on. 

Some NFTs have sold for millions in the past, but the market has experienced a severe downturn in step with the broader crypto market. Still, the NFT market is expected to hit $230 billion in value by 2030.

Survey respondents ranked 11 reasons for buying NFTs by importance. Source: CoinGecko

The third most important reason people bought NFTs was to participate as a stakeholder in a decentralized autonomous organization, with 72.9% motivated by the opportunity to gain a stake in such a project.

Related: Community-centric NFT collection for the hustlers goes live to the public

Other high-ranking reasons included enthusiasm for technology, community involvement and enthusiasm for an NFT collection’s business or artwork.

The reason that ranked as the least important on the list was “disrupting established structures or industries,” which was listed as a top reason for buying by 59.5% of respondents.

Overall, all 11 listed reasons were more heavily rated as having some level of importance rather than being rated neutral or not important.

The results were taken from 343 responses examined by CoinGecko and the Blockchain Research Lab, which were received during a survey conducted from December 2022 to January 2023.

Magazine: 4 out of 10 NFT sales are fake: Learn to spot the signs of wash trading

CoinGecko and 21Shares propose global crypto classification standard

The new crypto classification effort aims to help investors and regulators spot potential crypto failures like those seen in 2022.

Major cryptocurrency data aggregator CoinGecko and crypto investment firm 21Shares have joined forces to launch a global standard for classifying various crypto asset.

On Feb. 8, CoinGecko and 21Shares released The Global Crypto Classification Standard report, proposing a uniform method to categorize crypto assets. The effort aims to help investors and regulators better understand the specifics of each asset class in crypto, including potential failures like those seen by the industry in 2022.

“Since Bitcoin’s inception around 13 years ago, thousands of unique crypto assets and protocols have emerged, each with unique characteristics and different value propositions,” Carlos Gonzalez, research analyst at 21Shares’ parent firm 21.co, told Cointelegraph, adding:

“Unlike traditional financial assets, crypto assets can vary dramatically in nature, both as it relates to the asset itself and the protocol behind it.”

At the time of writing, there are more than 12,000 diverse crypto assets listed on CoinGecko’s website, with each coin having its unique characteristics and features. CoinGecko and 21Shares’ classification standard is based on three categorization levels, differentiating these thousands of assets by stack, market sectors, industries and taxonomy.

The first level, dubbed “crypto stack,” breaks down crypto assets into classes like cryptocurrencies, smart contract platforms, centralized applications, decentralized applications, interoperable blockchains and others. The methodology only refers to networks or protocols in the first two levels, not the underlying token.

Six examples of “crypto stack” classification. Source: 21Shares and CoinGecko

The second level, called “market mapping by sectors and industries,” further divides cryptocurrencies by segments like infrastructure, metaverse and decentralized finance (DeFi), as well as groups like payment platform, lending, developer tooling and others. As some protocols might fit into multiple industries, the methodology attempts to place the assets in the most relevant category in such cases.

The third level, “taxonomy of crypto assets,” classified crypto assets according to related asset “superclass” based on the cryptocurrency taxonomy system proposed by crypto analyst Chris Burniske in 2019. Burniske’s system follows Robert Greer’s 1997 paper, “What is an Asset Class Anyway?” categorizing crypto assets across their superclasses like capital assets, consumable or transformable assets and store of value assets.

Some of the examples in the store of value asset category include Bitcoin (BTC), Monero (XMR), Zcash (ZEC) and Dogecoin (DOGE). This type of crypto asset “cannot be consumed; nor can it generate income. Nevertheless, it has value; it is a store of value asset,” the proposed classification standard reads.

Related: The world must take a ‘collective action’ approach to regulations — India’s finance minister

CoinGecko and 21Shares’ effort to bring a global crypto classification standard is one of many global efforts to categorize cryptocurrencies. On Feb. 3, the Department of the Treasury in Australia released a consultation paper on “token mapping,” aiming to have its own taxonomy of crypto assets. Previously, Belgium’s Financial Services and Markets Authority was also seeking feedback on its classification of crypto assets as securities, investment instruments or financial instruments in July 2022.

“While the classification of digital assets is quite commonplace, many classification efforts are one-dimensional and confuse traditional investors by mixing crypto assets — the investable tokens — directly with the protocols behind them,” Gonzalez said.

The exec also expressed confidence that 21Shares’ collaboration with CoinGecko — a major independent crypto data website — will allow the newly proposed standard to appeal to both retail and institutional investors, as well as policymakers across the world.

Marathon’s first Bitcoin sale in 2 years not the result of distress

A company spokesman says the second-biggest publicly listed holder of BTC wants to have a “war chest” of liquidity composed of both cash and Bitcoin.

The second largest publicly-listed holder of Bitcoin, crypto mining firm Marathon Digital Holdings has offloaded some of its Bitcoin (BTC) for the first time in two years. 

A spokesman told Cointelegraph this was not a result of financial distress. 

According to an update posted on Feb. 2, the company disclosed that during January it sold 1,500 BTC, worth $35.3 million at current prices.

While some crypto miners have been forced to sell Bitcoin due to distress, Marathon vice president of corporate communications Charlie Schumacher said this was not the case for Marathon.

Marathon Digital’s Bitcoin Mining Data Center in Hardin, Montana. Source: Marathon Digital

Schumacher said that Marathon had been diamond-handing its Bitcoin until now, as the firm didn’t want to sell while production was down, and has been bullish on the long-term prospects of the leading cryptocurrency.

But coming into the new year, Marathon wants to have a “war-chest” of liquidity composed of both cash and Bitcoin and is looking to continue paying down debt and increase its cash positions.

Schumacher also noted that Bitcoin’s recent uptick in price contributed to the decision to sell some of its holdings.

 January saw Bitcoin rise above the $24,000 price level for the first time since August.

Even after the sale, Marathon managed to increase its unrestricted Bitcoin holdings in the month to 8,090 BTC ($189.8 million).

Operational highlights from Marathon’s latest update. Source: Marathon Digital Holdings

Marathon said it also had significantly ramped up Bitcoin production throughout January, producing 687 BTC, which represents an increase of 45% compared to the month prior. In the update, Marathon chairman and CEO Fred Thiel noted: 

“The improvement in our bitcoin production was primarily a result of our team’s ability to work in tandem with the new hosting provider in McCamey, Texas, to address the maintenance and technical issues at the King Mountain data center that had suppressed our bitcoin production in the fourth quarter of 2022.”

Last year, Marathon noted in a May 4 update that the last time it had sold any Bitcoin was on Oct. 21, 2020, and has been hodling since then.

When asked how it had managed to avoid selling the main product of its business operations, Schumacher pointed to the firm’s low headcount, consisting of “32 people as of today,” and suggested it was a result of sound long-term financial strategies.

Related: Bitcoin price is up, but BTC mining stocks could remain vulnerable throughout 2023

Marathon is the second-biggest publicly listed holder of Bitcoin according to CoinGecko, beaten only by software analytics company MicroStrategy. It has recorded a significant boost in its share price in recent days, with MARA stock rising 135% so far this year to $8, according to MarketWatch.

How to avoid getting hooked by crypto ‘ice phishing’ scammers: CertiK

Ice phishing is a type of scam that exists only in Web3 and is a “considerable threat” to the crypto community, the firm says.

Blockchain security company CertiK has reminded the crypto community to stay alert over “ice phishing” scams — a unique type of phishing scam targeting Web3 users that was first identified by Microsoft earlier this year. 

In a Dec. 20 analysis report, CertiK described ice phishing scams as an attack that tricks Web3 users into signing permissions that end up allowing a scammer to spend their tokens.

This differs from traditional phishing attacks that attempt to access confidential information such as private keys or passwords, via methods like the fake websites that claim to help FTX investors recover their lost funds.

A Dec. 17 scam where 14 Bored Apes were stolen is an example of an elaborate ice phishing attack. An investor was convinced to sign a transaction request disguised as a film contract, ultimately enabling the scammer to sell all of the user’s Apes to themselves for a negligible amount.

The firm noted that this type of scam was a “considerable threat” and found only in the Web3 world, where investors are often required to sign permissions to decentralized finance (DeFi) protocols that could be easily faked. CertiK wrote:

“The hacker just needs to make a user believe that the malicious address that they are granting approval to is legitimate. Once a user has approved permissions for the scammer to spend tokens, then the assets are at risk of being drained.”

Once a scammer has gained approval, they are able to transfer assets to an address of their choosing.

An example of how an ice phishing attack works on Etherscan. Source: Certik

To protect themselves from ice phishing, CertiK recommended that investors use a token approval tool and a blockchain explorer site such as Etherscan to revoke permissions for addresses they don’t recognize.

Related: $4B OneCoin scam co-founder pleads guilty, faces 60 years jail

Additionally, addresses that users are planning to interact with should be looked up on these blockchain explorers for suspicious activity. In its analysis, CertiK points to an address that was funded by Tornado Cash withdrawals as an example of suspicious activity.

CertiK also suggested that users should only interact with official sites they are able to verify and be particularly wary of social media sites like Twitter, highlighting a fake Optimism Twitter account as an example.

Fake Optimism Twitter account. Source: Certik

The firm also advised users to take a couple of minutes to check a trusted site such as CoinMarketCap or CoinGecko to be sure that a URL links to a legitimate site.

Tech giant Microsoft was the first one to highlight this practice in a Feb. 16 blog post, saying at the time that while credential phishing is very predominant in the Web2 world, ice phishing gives individual scammers the ability to steal a chunk of the crypto industry while maintaining “almost complete anonymity.”

They recommended that Web3 projects and wallet providers increase their security on the software level in order to prevent the burden of avoiding ice phishing attacks being placed solely on the end-user.

FTX collapse could see crypto sector layoffs accelerate

While the full impact of FTX’s collapse is still unfolding, some have already warned of an increase in layoffs to come “in the months to follow.”

The fall of crypto exchange FTX and potential resulting contagion could lead to an acceleration of crypto-company layoffs in the coming months, recruitment specialists warn.

A Nov. 14 report from crypto data aggregator platform CoinGecko found that as of Nov. 13, the crypto space has seen 4,695 employees let go in 2022 so far, presenting 4% of staff cuts across all “technology startups.”

However, the authors of the report warn that crypto layoffs could increase in the coming months when the “full impact” of FTX’s sudden collapse takes effect:

“With the collapse of FTX since November 2 and its full impact on the cryptocurrency space still unfolding, further cryptocurrency layoffs may occur in the months to follow.”

Speaking to Cointelegraph, CryptoRecruit founder Neil Dundon argues that while FTX’s events will cause some layoffs, it hasn’t changed the broader trend that crypto recruitment follows crypto prices.

“Layoffs have been consistent effectively following the same trend as crypto prices. FTX hasn’t changed that broader trend albeit a tragic event,” he said, adding:

“There will be layoffs because of it but that will present opportunities for good projects to scoop up good talent which we are collecting.”

Kevin Gibson, the founder of recruitment firm Proof of Search, was less optimistic, sharing that he had one candidate that was due to start employment today but had his offer “pulled” during the first call with the company.

Gibson said it was hard to comment on how the FTX collapse will shake out as it’s “changing daily” but said his candidate’s experience “will not be an isolated incident.”

Companies across the crypto sector have already undergone a number of layoffs throughout the year as a result of the market downturn.

Among the most recent staff cuts in the industry include payment processor Stripe’s layoff of 1,000 employees, Flow blockchain developer Dapper Lab’s 22% cut and venture capital firm Digital Currency Group’s 10% layoff. All layoffs took effect in early November.

Digital asset-focused investment firm Galaxy Digital was also reported to be eyeing a 20% cut on Nov. 1.

Coinbase is understood to have cut another 60 staff on Nov. 10, according to Yahoo Finance.

Related: Tech talent migrates to Web3 as large companies face layoffs

The latest CoinGecko report follows an earlier Nov. 4 report, which looked into the cities most impacted by cryptocurrency layoffs.

At the top of the list was San Francisco — home to Silicon Valley, one of the world’s largest technology and innovation hubs — which was followed by Dubai, New York City and Singapore.

‘Everything is fine’ — Gala Games calls for calm after fears of multi-billion dollar hack

Gala Games said the unusual activity of its pGALA token was actually part of efforts to safeguard it from potential attack.

Blockchain gaming company Gala Games urged its community for calm after misplaced fears of a  multi-billion dollar rug pull or hack caused the GALA token to temporarily crash 25.6%.

The initial panic, which Gala Games later implied was unfounded, came after a single wallet address appeared to mint over $2 billion GALA tokens out of thin air — which was flagged by blockchain security firm PeckShield on Nov. 3.

Fears that the unusual activity was a sign of an exploit or rug pull caused the GALA token price to drop a dramatic 25.6% from $0.0394 to $0.0293 over a 130-minute stretch late on Nov. 3, according to data from CoinGecko.

However, Gala Games took to Twitter on Nov. 4 to dispel the “FUD” surrounding its native token, explaining that “lots of people are tossing around words like ‘hack’ and ‘rug’. Neither of these is the case.”

Gala Games president for blockchain Jason Brink explained that the unusual activity detected on decentralized exchange (DEX) PancakeSwap was performed by pNetwork, who was working to drain the liquidity pool as a means to safeguard it from a potential vulnerability.

In a separate tweet, pNetwork, the cross-chain interoperability bridge used by Gala Games on the BNB Smart Chain, confirmed that a “misconfiguration” event took place. It also responded to a tweet from Peckshield to note that it “coordinated the white hat attack” to prevent pGALA from being exploited:

The explanations appear to have quelled some panic, with the GALA token price since partially recovered from its 24-hour low of $0.0293 to now sit at $0.352.

Related: Major hack on play-to-earn crypto games a ‘matter of time:’ Report

Gala Games confirmed that all GALA tokens on Ethereum and GALA-related assets on the GALA bridge were safe. The team, along with pNetwork, informed the community of its decision to “temporarily suspend” transaction activity on the bridge.

Brink also advised not to buy pGALA on PancakeSwap “for now.”

“A new pGALA token will be created to replace the old compromised one,” which will be sent to those who owned pGALA before the pool was drained, pNetwork said.

CoinGecko open to acquisition but now is ‘too early,’ co-founder says

While CoinMarketCap was acquired by Binance during post-2017 crypto winter, the current bear market is not the right time to sell CoinGecko, its COO said.

Major cryptocurrency tracking website CoinGecko is open to acquisitions, but not right now, according to a co-founder of the platform.

CoinGecko has been hit by the current crypto bear market, but the firm is far from selling off, CoinGecko chief operating officer Bobby Ong told Cointelegraph.

Ong believes that all crypto-related companies are affected by the cyclical nature of the industry as they usually do well during bull runs and struggle during bear markets.

“During this crypto winter, we at CoinGecko are similarly impacted. This will be our third crypto winter and we are focused on improving CoinGecko to prepare for the eventual bull run that will come again,” Ong said.

According to the chief operating officer, CoinGecko had 100 million monthly pageviews in July, experiencing an 85% decrease in traffic compared to the peak in November 2021. The traffic decline comes in line with the price movement of Bitcoin (BTC), which reached an all-time high above $68,000 last November.

“This has definitely impacted revenue, as advertising is one of our major revenue drivers and is a function of pageviews received,” Ong noted. He also said that new token listings on CoinGecko dropped about 70% from last year.

Despite shrinking revenues and the ongoing uncertainty around the crypto market, CoinGecko is still holding strong in terms of its headcount. The firm nearly doubled its staff over the past seven months from 30 to 57 team members and has not laid off any employees. CoinGecko hasn’t instituted any hiring freeze as well, Ong said.

“In fact, we just paid out a small bonus to all team members for the first half of 2022 despite the bear market. We are also in the process of reviewing our salaries to make it more competitive to hire and retain the best talents,” Ong stated, noting that CoinGecko has a few remaining open roles for the rest of the year.

CoinGecko is the biggest rival of CoinMarketCap, the crypto price-tracking website that was bought by Binance in April 2020. The acquisition came during the post-2017 crypto winter, with Bitcoin trading between $7,000-8,000 during the month of acquisition. Binance has never officially announced the cost of the deal, while it was rumored to cost the firm $400 million.

Bitcoin price chart from May 2017 to April 2020. Source: CoinGecko

Following CoinMarketCap’s acquisition, Ong said that the firm was approached multiple times by exchanges, venture capitalists and angel investors, but CoinGecko opted to prioritize independence and stay neutral. The company’s views have somewhat changed since, as CoinGecko considers it might sell the platform one day, Ong said, stating:

“At some point in the future, we will be open to selling the firm but right now, it is too early to sell. The crypto industry is still in its first inning and there will be high growth in the coming years.”

Ong once again predicted that “anything that can be tokenized will be tokenized in the future,” which would require a reliable source to track all those tokens.

Related: ‘Builders rejoice’: Experts on why bear markets are good for Bitcoin

“CoinGecko aims to empower the decentralized future by being the foundational infrastructure to help people get the information they need on the millions of tokens that will be listed in the future,” the chief noted.

He also emphasized that the bear market is the best time to focus on building great products as there is “significantly less noise and distraction from short-term trends.”