nonfungible token

Is MATIC price about to double? Polygon’s Reddit hype pushes exchange balance to 9-month lows

MATIC price could sustain bullish momentum on cues from a mix of optimistic fundamental and technical indicators.

A sharp rebound in the Polygon (MATIC) market in the last four months has increased its price by 200% when measured from its June 2022 bottom of $0.31. And now, the token is showing signs of undergoing another major market rally.

MATIC exchange balance hits nine-month low

Notably, the MATIC supply held by all crypto exchanges fell to 802.15 million on Oct. 26, its lowest level since January 2022. The plunge came as a part of a broader downtrend that has witnessed over 600 million MATIC leaving exchanges in the last four months, data on Santiment shows.

*MATIC balance on exchanges versus price. Source: Santiment*

A declining crypto balance across exchanges is perceived as bullish by the market since traders typically withdraw their funds from trading platforms when they want to hold the tokens long-term.

The MATIC chart above shows a similar albeit erratic negative correlation between its price and supply on exchanges. As a result, a period of decline in MATIC reserves at exchanges has historically coincided with an uptrend in price and vice versa.

Therefore, the latest plunge in MATIC supply across exchanges hints at more upside for the token in the coming weeks.

Reddit using Polygon to mint collectible NFT avatars

More cues for a potential MATIC price rally come from the news of Polygon’s adoption by mainstream fintech companies.

Notably, Nubank, a Brazilian neobank bank backed by Warren Buffett’s Berkshire Hathaway, picked Polygon to build its native Web3 ecosystem. Since the Oct. 20 announcement, MATIC’s price has rallied by nearly 12% and was trading for $0.95 as of Oct. 26.

Furthermore, the massive MATIC outflow from exchanges coincides with the soaring trading and sales volume of Reddit nonfungible token (NFT) avatars. These digital collectibles are minted as NFTs on the Polygon blockchain.

*Reddit NFTs sales volumes. Source: Dune Analytics*

From a technical perspective, MATIC has broken out of a bullish continuation pattern, dubbed a bull flag, whose profit target sits almost double the token’s current valuation, as shown below.

*MATIC/USD three-day price chart. Source: TradingView*

MATIC also shows similar strength against Bitcoin (BTC), according to a technical setup shared by Kaleo, an independent market analyst.

“The predominate structure is a HTF [higher timeframe] flag dating back to May of ’21 that looks ready for another leg higher,” the analyst wrote while citing the chart below.

*MATIC/BTC daily price chart. Source: TradingView*

“I’m expecting a small retrace before breaking out / continuing higher,” he added.

The MATIC/BTC setup could propel the pair to 0.000065 BTC by early 2023 versus the current price of 0.0000458 BTC, a 30% price rally.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Almost everything could be tokenized in 5-10 years — Matrixport co-founder

Cost efficiencies, improved liquidity, 24/7 market access and the removal of intermediaries were the main advantages cited that blockchain infrastructure has over current legacy systems.

In five to ten years, almost every “real world” asset class could be tokenized in the form of a nonfungible token (NFT) according to Cynthia Wu, co-founder of digital asset service platform Matrixport.

Speaking to Cointelegraph, Wu said the best case for NFTs would see the widespread representation of real-world assets to be stored and traded on-chain:

“Eventually, all the major financial asset classes are going to be represented on this new financial infrastructure [and] NFTs could be our instrument to represent off-chain assets like real estate deeds, equities or bonds.”

The move on-chain would make these real-world assets “more liquid and more tradable,” which would improve price discovery and transaction activity, Wu added.

But Wu said that while it’s great that we’ve created over two trillion worth of digital native assets on-chain from Bitcoin (BTC), Ether (ETH) and other tokens, the only niche to have generated NFT transaction activity has come from digital collectibles — which hasn’t really helped institutional adoption:

“We haven’t really been seeing off-chain assets being represented on-chain […] we’re now really only at the first 3-5% of it.”

But, nonetheless, Wu is confident that the tide will turn.

Earlier this month, a report from Boston Consulting Group (BCG) estimated that the total size of tokenized illiquid assets could reach $16.1 trillion by 2030.

BCG predicted much of this tokenization to come from pre-initial public offering (IPO) stocks, real estate, private debt, and revenue generated from small to medium-sized businesses.

However, while the tokenization of real-world assets has piqued the interest of financial institutions, Wu said some have been a bit reluctant to move on from the legacy systems that have served them well over the years.

Wu pointed out the traditional financial system hasn’t accounted for the trading of nonfungible assets because they can’t easily be exchanged the same way a fungible or divisible asset can, but tokenization on the blockchain provides a solution for that.

She also argued that blockchain infrastructure is the superior option to legacy systems, citing cost efficiencies, improved liquidity, 24/7 market access and the removal of intermediaries as the main factors that would lead to a more streamlined financial system.

Matrixport was established in Feb. 2019, and currently manages between $3-4 billion in digital assets from a broad mix of retail and institutional clients.

Totality Corp CEO explains why India is still largely untapped for NFTs

Despite a strong emphasis on “social status” in India, holding a Bored Ape Yacht Club NFT there isn’t impressing anyone.

Despite ranking as one of the highest adopters of cryptocurrency among emerging markets, the majority of the Indian market is yet to embrace nonfungible tokens (NFTs).

In an interview with Cointelegraph, Totality Corp founder and CEO Anshul Rustaggi explained that social and cultural barriers, as well as anti-crypto regulations, are holding back NFTs from mass adoption — particularly in some of the lower-tier cities in the country.

India has a population of 1.38 billion people and is the second-most populated country in the world, sitting just behind China. Last month, the United Nations forecasted that the country could overtake its competitor sometime in 2023.

However, Rustaggi explained that crypto trading and NFT collecting are seen as speculative investments — a concept that is frowned upon in Indian culture and sits in a similar boat as gambling.

“India has a very love and hate relationship with speculation. So all of Asia, including India loves speculation. But morally, we like to always say bad things about it,” he said.

Rustaggi explained that even his time as a hedge fund manager in London was seen by his own mother at the time as “basically gambling with other people’s money:”

“With NFTs, the only way to earn money was speculation […] We haven’t yet as a society accepted digital goods.”

While surveys have found that most NFTs are bought due to their speculative nature, some collections can be seen as a “signal” for wealth and status, such as in the case of the Bored Ape Yacht Club NFT collection, which boasts a long list of celebrities and heavy hitters in crypto as hodlers.

However, Rustaggi says this concept hasn’t taken flight in India despite the strong emphasis on “social status” in Indian society.

“In India, social status matters massively, the largest expense we have in India is marriage. On average, 34% of your life’s expenses are for the marriage of your children. And, the thing is that it’s such a social event, you want to showcase your best to the world. So social status is important.”

Rustaggi says the speculative nature of NFTs has prevented it from reaching the same level of social “signaling” compared to a luxury car or a Rolex watch but noted:

“So I think that time for NFTs to become a great signaling will come in India. I don’t think it has come yet, but it will come.”

In late 2021, Totality Corp launched its first Lakshmi NFT, inspired by the goddess of wealth and fortune. Rustaggi said this was “by far” the largest NFT drop in India, bringing in a total of $561,000 from a collection of 5,555 NFTs.

Rustaggi said the drop was successful as it touted staking rewards in USD Coin (USDC) as an incentive to hold the NFT, which made it a “guaranteed return” rather than “speculation.”

Overall, however, Rustaggi believes that crypto adoption will remain challenged in India as long as there is regulatory uncertainty.

The Indian government has maintained a strong anti-crypto stance since 2013. Earlier this year, the government proposed and implemented two crypto tax laws which have since seen trading volumes plummet and many crypto unicorns leaving the country.

“The government in India definitely doesn’t want crypto anymore […] The government is outright saying ‘we like blockchain but we don’t like cryptocurrency,’ but it’s kind of ridiculous.”

3 reasons SOL price is up 30% in two weeks — Will Solana’s uptrend continue?

A mix of solid fundamental and technical catalysts helped SOL price reach its best level in three weeks.

Solana (SOL) ticked higher on Sep. 13, mirroring similar upside moves in the broader cryptocurrency market, led by Bitcoin (BTC) and Ether (ETH).

On the daily chart, SOL’s price gained over 4% to $39, its best level in 3 weeks. The token’s intraday gains came as an extension of a prevailing uptrend that has seen its price gaining 30% in just 2 weeks.

*SOL/USD daily price chart. Source: TradingView*

In comparison to Solana, Bitcoin and Ether underperformed, securing 16% and 22% gains in the same period. Let’s look at the mix of fundamental and technicals that may have prompted SOL to rally higher.

Helium’s merge with Solana

On Aug. 30, core developers behind the Helium Network, which offers decentralized wireless 5G network coverage by enabling users to become hotspots, announced a governance proposal to migrate to the Solana blockchain from its native chain.

The Helium developers cited their “need to improve operational efficiency and scalability” while seeing Solana as an ideal fit.

SOL is the staking and transaction payment token inside the Solana ecosystem.

*SOL/USD weekly price chart. Source: TradingView*

NFT boom

The latest buying period in the Solana market has also coincided with upticks in its nonfungible token (NFT) metrics.

Notably, volume across NFT marketplaces like OpenSea, Metaplex and Magic Eden reached nearly 1.2 million SOL (~$42.8 million) in the week ending Sept. 11, data tracked by Nansen shows. That further accompanied a rise in NFT transactions, hitting a record high of over 1 million in the same period.

Solana NFT volume per week presented without comment pic.twitter.com/QaPanxpOkv

— Nansen Intern (@nansen_intern) September 12, 2022

The jump in Solana’s activity appeared as a unique bright spot in the NFT sector that’s otherwise seeing lower demand in recent months. For instance, the trading volume at the leading NFT marketplace OpenSea has seen a drastic decline .

Of all Solana NFT collections, the newly-launched “y00ts mint t00b” collection recently secured the most trading volume, with HyperSpace tallying the average figure at around $18.45 million per day.

SOL’s technical bounce

From a technical perspective, SOL’s 30% rally started after testing a historically significant support level.

SOL/USD has been consolidating sideways inside a range defined by two flat, parallel trendlines since May 23. A drop toward the lower trendline (support) has been typically followed by a 58%–60% bounce toward the upper trendline (resistance).

Similarly, a pullback from the upper trendline has seen SOL’s price crashing toward the lower trendline, as shown below.

With SOL rebounding, its path of least resistance appears to be toward the upper trendline near $47.50, up around 38% from current price levels.

3 reasons SOL price is up 30% in 2 weeks — Will Solana’s uptrend continue?

A mix of solid fundamental and technical catalysts helped SOL price reach its best level in three weeks.

Solana (SOL) ticked higher on Sep. 13, mirroring similar upside moves in the broader cryptocurrency market, led by Bitcoin (BTC) and Ether (ETH).

Helium’s merge with Solana

The Helium developers cited their “need to improve operational efficiency and scalability” while seeing Solana as an ideal fit.

SOL is the staking and transaction payment token inside the Solana ecosystem.

NFT boom

The latest buying period in the Solana market has also coincided with upticks in its nonfungible token (NFT) metrics.

Solana NFT volume per week presented without comment pic.twitter.com/QaPanxpOkv

— Nansen Intern (@nansen_intern) September 12, 2022

SOL’s technical bounce

From a technical perspective, SOL’s 30% rally started after testing a historically significant support level.

Similarly, a pullback from the upper trendline has seen SOL’s price crashing toward the lower trendline, as shown below.

With SOL rebounding, its path of least resistance appears to be toward the upper trendline near $47.50, up around 38% from current price levels.

Moonbirds will store NFT art ‘in chain’ — Raises $50M in Series A funding

Storing an NFT “in chain” means that the NFT can be generated completely off the underlying smart contract, without any need for an off-chain storage provider.

PROOF, the private community behind the Moonbirds nonfungible token (NFT) collection, has announced it is shifting its blue-chip collection completely “in chain” — allowing images to be fully contained within the underlying smart contract.

In a community livestream named Future PROOF on Tuesday, Harri Thomas, director of products at PROOF, explained that the new approach will mean that in the future, the viewable image of a Moonbird NFT will be “constructed from the contract itself from art layers, which are going to be stored on the blockchain:”

“We’ve talked about putting the birds ‘on chain’, so what I’m here to tell you today is that they’re not only going to be ON chain, they’re going to be put IN chain.”

Thomas explained that their Ethereum-based NFTs will be different from most other NFTs, which are simply tokens that point to where the images are stored off-chain.

“This is an unusual approach. Certainly not unique,” explained Harris, adding that another example of an NFT project using the same approach is OnChainMonkey, a 10K PFP NFT collection launched in 2021.

Thomas declined to provide a date for when the NFT collection will make this shift, but noted that it is a “primary focus” for the smart contract team, so “hopefully not too long.”

Co-founder and chief product officer Justin Mezzell, who was one of the hosts of the live stream, added:

“It’s cool to enter that rarefied space of a fully in-chain project and making sure that this project is really fully decentralized and viewable for just generations.”

The livestream also revealed the first official expansion of PROOF’s Moonbirds collection, known as Moonbird Mythics, is expected to launch in early 2023.

The collection will span 20,000 NFTs, and is the organization’s third NFT profile picture (PFP) project.

Short Moonbird recap:

New collection called Mythics

Mythics burn oddities or nested moonbirds have a go at it everyday

50m$ raise led by @a16z

Highrise way to showcase/explore art on any chains $PROOF token incoming (ticker not finalized) pic.twitter.com/bYDmRn6x5i

— 0xMaki ⌐◨-◨ (@0xMaki) August 30, 2022

$50M in funding

PROOF has just raised $50 million in a Series A funding round led by venture capital firm Andreessen Horowitz (a16z), along with participation from Seven Seven Six, True Ventures, Collab+Currency, Flamingo DAO, SV Angel and VaynerFund.

“It’s great to have this vote of confidence from some of the most respected investors in Web3, as well as capital to keep delivering great products and services as we mature this business over the long term,” said PROOF founder Kevin Rose.

In April, the Ethereum-based Moonbirds NFT project completely sold out its collection of 10,000 computer-generated pixel owl avatars within 48 hours of launch, netting $281 million in sales at the time.

Its success, despite the bear market, earned it a title as a blue-chip NFT.

According to OpenSea, Moonbirds is ranked at number seven in terms of total volume traded at approximately 169,000 Ether (ETH) and is currently ranked number one in the 24-hour charts at a floor price of 13.8 ETH, or $21,445 at current prices.

Other announcements made during the Future PROOF livestream included an upcoming launch of a PROOF social platform, the creation of a new decentralized autonomous organization (DAO) that will oversee licensing of the Moonbirds name, and a new PROOF token that will have “real utility” — with more details expected in 2023.

Looks bare: OpenSea turns into NFT ghost-town after volume plunges 99% in 90 days

An ongoing debt crisis at lending platform BendDAO is also increasing the risk the NFT bubble will burst.

OpenSea, the world’s largest nonfungible token (NFT) marketplace, has witnessed a substantial drop in daily volumes as fears about a potential market bubble grow.

OpenSea volume plummets to yearly lows

Notably, the marketplace processed nearly $5 million worth of NFT transactions on Aug. 28 — approximately 99% lower than its record high of $405.75 million on May 1, according to DappRadar.

*OpenSea users, volume and transactions statistics. Source: DappRadar*

The massive declines in daily volumes coincided with equally drastic drops in OpenSea users and their transactions, suggesting that the value and interest in the blockchain-based collectibles have diminished in recent months.

That is further visible in the falling floor prices — the minimum amount one is ready to pay for an NFT — of leading digital collectible projects.

For instance, the floor price of Bored Ape Yacht Club dropped by 53% to 72.5 Ether (ETH) on Aug. 28 vs. a high of 153.7 ETH on May 1.

*BAYC floor price history. Source: CoinGecko*

Similarly, the floor price of CryptoPunks, another top NFT collection, dropped almost 20% from its July high of 83.72 ETH.

NFT bubble is bursting

NFT prices are quoted in the native currency of the blockchain on which they are launched. So, a digital collectible created on Ethereum is purchased using Ether, which also means that NFT prices will fall if ETH’s market valuation plummets.

A bearish ETH market appears to be one of the primary drivers behind the poor NFT statistics. Notably, the price of 1 ETH has fallen from $4,950 in November 2021 to below $1,500 in August 2022.

*ETH/USD 3-day price chart. Source: TradingView*

BendDAO votes to improve NFT liquidity

Last week, BendDAO, a decentralized autonomous organization that enables NFT owners to collateralize their digital collectibles to take loans (in ETH) worth 30% to 40% of the NFT’s floor price, voted to change its protocol’s code to make its NFT collateral more liquid.

The vote occurred after a rise in Ether’s price increased the value of ETH-denominated loans in dollar terms. Meanwhile, on the other hand, NFT prices plummeted, reducing the value of the collateral held by BendDAO.

As a result, BendDAO is now facing its own debt crisis moment, where borrowers cannot pay their dollar-denominated loans due to falling ETH prices, while lenders are finding it difficult to recover their loaned amounts due to falling collateral valuations.

BendDAO’s latest vote has changed its NFT liquidation threshold from 95% to 70%. It has also reduced the time offered to borrowers to avoid liquidation from 48 hours to fo hours to attract more bids for their NFT collaterals.

In other words, the floor price of NFTs, including BAYC, risks plunging further if the market’s liquidity continues to dry up.

agreed, 2020-2021 was crazy get-rich-in-months & the DeFi-NFT-Web3 bubble is going bust now, turns out founders & VCs were scammers only in for the $$$.

But pipl said its over in 2018 too after ICOs.

The next bubble will come 100%, you just need to survive.
play the long game. https://t.co/5f17JfdFfY

— doncrypto (@DonCryptoDraper) August 29, 2022

18 ‘uncomfortable’ truths about nonfungible tokens

NFT analyst OKhotshot warns there are no reliable stable investments in the NFT space and most investors will lose money investing in the market.

Nonfungible token (NFT) analyst and blockchain detective OKHotshot” hahighlighted his picks for 18 of the most “uncomfortable truths” about the NFT industry.

In a lengthy 20-part thread to his 45,000 followers on Twitter on Saturday, OKHotshot laid bare many of the issues currently plaguing the NFT industry, including irresponsible celebrity endorsements, hacking and the kinds of projects that are almost always destined to fail.

The analyst made his name in the industry as a full-time on-chain analyst specializing in NFT audits and Discord security operating under as @NFTheder on Twitter.

Most NFT investors will lose money

One of the most sobering “uncomfortable truths” shared by the NFT analyst is that most people will lose money investing in NFTs.

OKHotshot said there are “no reliable stable investments in NFTs” warning that if an investor hears the term “blue chip NFT” to “run away.” He also warned that “diamond handing” isn’t the best way to make money, instead, investors should be taking profits when they can.

“We are NOT all going to make it. Most NFT traders trade at a loss.”

Previously, Cointelegraph reported on a poll that found that while 64.3% of respondents said they bought NFTs to make money, 58.3% claimed they have lost money in their NFT journey.

The analyst advised anyone interested in NFTs must stay on top of announcements because “by the time you hear about a new project on Twitter spaces, you are late.”

He also warned that volume and liquidity are often more important metrics than floor price, and time is more valuable than any asset, so planning ahead is essential.

“If there are no buyers you can’t take profits,” he explained.

6. You are responsible for your own security. Understand most projects don’t audit their code or have Discord security.

— OKHotshot (@NFTherder) August 27, 2022

Majority of NFT projects fail

The NFT analyst also cautions anyone interested in getting in early in a particular NFT project as tokens often fail to stay above the mint price, adding also that “derivatives rarely outperform the original NFT collections.”

NFT project Pixelmon stirred up controversy in March this year after revealing the finalized art for its much-anticipated project — the quality of which turned out to be far below expectations.

The project raised roughly $70 million, with each NFT minted for 3 Ether (ETH) each. However, the floor price on the OpenSea NFT marketplace has plummeted to only 0.26 ETH, worth roughly $370 at the time of writing.

Phantabear, another NFT project, originally minted for 6.36 ETH and drove record trading volumes on OpenSea when it was first released in January but has also seen a major drop in value since then, with the floor price at only 0.32 ETH, or $463 at the time of writing.

A March study by blockchain analytics firm Nansen found that most NFT collections either make no money or end up netting less than they cost to create.

Celebrities and influencers clueless

Several of the shared “uncomfortable truths” are scathing of celebrities and influencers.

OKHotshot said that despite what famous influencers may claim or imply through social media posts, noting that “celebrity NFT projects are notoriously bad investments.”

He also added that “Web2 marketing is exceedingly ineffective in the NFT market.”

17. Celebrity NFT projects are notoriously bad investments.

— OKHotshot (@NFTherder) August 27, 2022

Recently, Cointelegraph reported on warning letters posted by a consumer watchdog group to nearly 20 celebrities for their role in shilling NFTs.

OKHotshot’s final points revolve around the idea that most NFTs don’t have any intrinsic value. The analyst warned that NFT projects without sale terms aren’t worth anything and that NFT benefits don’t travel to downstream purchasers unless specified in the terms

“NFT projects without sale terms are selling you a token ID with a hyperlink to an off-chain asset. Without terms, nothing is defined. You can’t own a hyperlink so in all likelihood you bought nothing.”

That being said, he believes that the price of NFTs continues to be controlled by hype and market speculation, noting that savvy investors could “use this to your advantage.”

Nearly $55M worth of Bored Ape, CryptoPunks NFTs risk liquidation amid debt crisis

Analysts are divided on whether the potential NFT liquidation event is a buy-the-dip opportunity.

Many owners of precious Bored Ape Yacht Club (BAYC) and CryptoPunks nonfungible tokens (NFTs), who used them as collateral to take out loans in Ether (ETH), have failed to repay their debts. The situation could lead up to the NFT sector’s first massive liquidation event.

gm.

As a result of the floor dropping to 72, the first BAYC liquidation auction on BendDAO has begun

Starting price of 68.4e…

Any takers or is this going to be the first bad-debt domino that falls for the platform? pic.twitter.com/7qxsIi661e

— Cirrus (@CirrusNFT) August 18, 2022

BAYC “death spiral” incoming?

DoubleQ, the founder of Web3 launchpad Double Studio, says lending service BendDAO could liquidate up to $55 million worth of NFTs to recover its loans, fearing the so-called “health factor” of these debts could fall below 1.

Notably, an NFT collection’s floor price is important in determining the health factor. BendDAO offers 30%–40% of the NFT’s floor price as loans. But the protocol sells the NFT if its floor price falls too close to the amount borrowed—a liquidation threshold, as explained below.

*BendDAO’s NFT liquidation protocol. Source: Official Website*

Meanwhile, the floor price of BAYC has fallen from 153.7 ETH in May to 69.69 ETH in August—a nearly 55% plunge in three months. Simultaneously, the health factor of at least 20 loans with BAYC as collateral has fallen to 1.1 as of Aug. 19, data on BendDAO shows.

4/ Why is this a problem?

There are currently 20 BAYCs with under 1.1 health factor

And wayyyy more under 1.2

Meaning, all of those apes WILL get liquidated, soon. pic.twitter.com/5jwoZZXHRT

— doubleQ (@xDoubleQ) August 19, 2022

Borrowers have 48 hours to repay the loan or their NFT collateral will be liquidated. According to doubleQ, these liquidations could lead to “a death spiral for the BAYC ecosystem and NFT market as a whole,” given BendDAO’s exposure to other NFT projects, including CryptoPunks and Doodles.

“OpenSea volume is at the lowest point ever in the last 12 months,” the analyst warned, adding:

“There’s simply not enough volume to save these liquidations.. It’s inevitable.”

*BendDAO NFT holdings distribution. Source: doubleQ*

OpenSea is the leading NFT marketplace by volume.

To buy the dip or not?

Nevertheless, doubleQ believes the incoming BAYC liquidation could offer an opportunity to buy the NFTs at cheaper rates.

7/ So what can you do to take advantage (or at least protect yourself) from the situation?

Two options:

– Bidding on loans and go for a flip
– Waiting for the mass liquidation to have one of the best entry points ever

— doubleQ (@xDoubleQ) August 19, 2022

On the other hand, Naimish Sanghvi, CEO of India-based crypto news outlet Coin Crunch, wonders if there would be any buyers due to a lack of arbitrage opportunities.

“Your bid has to be more than 95% of the floor value and higher than the debt amount,” explained Sanghvi, noting that there could no room for making money from arbitrage between these values.

“The auctions don’t begin until the first bid is placed, so there may be several NFTs in limbo at a given point in time if the prices are unfavorable. And that should scare the Liquidity providers.”

This scenario would have BendDAO wait for borrowers to repay their loans—or to wait for the re-emergence of liquidators after a market recovery—to subside its “temporary floating loss.”