The State of Non-Fungible Tokens

A Brief Intro on Non-Fungible Tokens

Since the inception of Crypto Kitties, non-fungible tokens have slowly begun to carve out a substantial niche within the Ethereum ecosystem. For those unfamiliar, non-fungible tokens (aka NFTs) are a special type of cryptographic token that are uniquely distinguishable from one another.

As a brief example, if Alice transfers Bob 1 ether, that ether is no different from other ether Bob may have in his wallet. On the other hand, if Alice transfers Bob an NFT, that token has unique characteristics that make it different from other NFTs of a similar class.

Non-fungible tokens have a wide range of potential use cases include collectibles, (avatars, trading cards, in-game items or cosmetics) and property (digital real-estate and artwork). Some concrete examples include NFT-based tickets, where each token has a unique “bar code”, or collectibles, where each token represents a unique trading card.

Ultimately, non-fungible tokens provide a new paradigm for creating verifiable digital scarcity on unique assets and, we’re beginning to see these types of tokens rise to prominence outside of the initial craze with Crypto Kitties back in 2017. 

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The Rise of Gods Unchained

In early October, Blizzard Entertainment denounced the prize money and winnings of pro HearthStone player, BlitzChung, after expressing support for the Hong Kong protests. For many already down the rabbit hole, this move by Blizzard really solidified the value proposition of decentralized networks and non-censorable assets.

As such, the Gods Unchained team took this opportunity to showcase their Ethereum-based HearthStone competitor, Gods Unchained.  After calling out the US-based gaming company for caring “about money more than freedom”, the team offered to refund BlitzChung’s lost winnings as well as a ticket to participate in the Gods Unchained Tournament with a current prize pool of over $540k. 

Long story short, this was a beautiful PR move by the Gods Unchained team as they instantly gained recognition with the broader gaming community as well as quickly selling out the rest of the Genesis Card Pack for a grand total of 33,333 ETH. This surge in interest ultimately became noticeable as Ethereum’s on-chain data showed an explosion of usage in ERC-721 tokens. 


Source via CoinMetrics Blog

In total, the amount of NFT-based transactions exploded to 3.7 million transfers in a single day. This surpasses existing ERC-20 and non-token transfers on Ethereum. Ultimately, we believe this reaffirms the future potential for non-fungible tokens within the gaming industry at large. Gamers are already quite comfortable with digital collectibles and in-game digital currencies. Blockchain-based games on a decentralized, permissionless network in combination with tokenized in-game assets democratizes the control over the game and its surrounding ecosystem. Ironically, it was Blizzard’s mismanagement of World of Warcraft that originally led Vitalik Buterin to realize the importance of decentralized networks and create Ethereum in the first place. 

While Gods Unchained has been the clear leader in recent months with the usage of non-fungible tokens, we’ve also seen broader trends in NFT creation.

The Growth of ERC-721s

Source via CoinMetrics Blog

While ERC-20 tokens still dominate the market in terms of transfer amounts, ERC-721 contract creation has seen a significantly higher amount of growth percentages throughout 2019. According to the team at CoinMetrics, ERC-721 contracts have grown by almost 350% this year compared to the 30-40% contract growth in ERC-20 and non-token contracts. We can assume that as blockchain-based gaming continues to attract a wider audience outside of our small crypto community, the adoption of ERC721s will continue to grow in parallel. 

Data via Etherscan 

Codex Record

Despite Gods Unchained completely dominating the market, it’s important to outline some of the other potential large players in terms of transaction volume. The second biggest player in terms of 7-day transfer volume is Codex Record. With nearly 19,000 transfers in 7 days, Codex Record is a global registry for art and other valuable collectibles by allowing for the creation of digital provenance records for any asset. With Codex, the initial aim to secure the $68 billion art and other collectibles market. If you’re interested in exploring some of the secured assets on Codex, feel free to visit the registry here

Crypto Kitties

Even two years later, digital cats continue to live on to some degree. Crypto Kitties has continued to maintain over 18,000 transactions on a weekly basis despite being down significantly from the flash-in-the-pan bubble back in November of 2017. During this mania phase, the application was seeing nearly 18,000 sales per day with an average price of 0.4 ETH and a total volume of 4,833 ETH. Compare this today where Crypto Kitties sees less than 100 sales per day, an average price of 0.02 ETH and a total daily volume sitting around 2.7 ETH. 

Source via KittyExplorer

Ethereum Naming Service (ENS) 

We’ve also seen a modest increase in NFT usage through Ethereum Naming Services (ENS). The system uses non-fungible tokens to uniquely identify cryptographic public addresses with human-readable names. By leveraging NFTs for Ethereum Naming Service, users can benefit from easily buy, selling, and sending top-level domains to one another. 

NFT Marketplaces

When it comes to exchanging NFTs, a number of niche marketplaces have begun to see steady growth in the past year. In particular, OpenSea is looking to be the de facto NFT marketplace with collectibles from over 180 unique dApps and even more one-off events (like SFBW attendance tickets). While the volume on OpenSea is quite low, we are starting to see a clear trend that usage and volume is increasing. As such, it seems likely that as NFT usage begins to increase, there will likely be an opportunity for someone like OpenSea to become to eBay or Binance of non-fungible tokens.

Similarly, OpenSea has also aggregated a “leaderboard” to show which dApps are seeing the most volume on a 7-day period. For those of us who are still looking for that first killer NFT-based game, leaderboards such as this may be a great reference to keep an eye on.

Data via OpenSea

Acquisition Signaling

In addition to on-chain growth, the industry at large is also showing signs of the growing NFT narrative with recent company acquisitions. Just today, Nifty Gateway, an exchange that allows you to buy NFTs with a credit card, was acquired by Gemini, one of the leading digital asset exchanges here in the United States. Gemini’s CEO Tyler Winklevoss stated:

“NFTs and the digital goods (and collectibles) they enable will play a major role in the next era of the digital economy. They are the perfect form factor for crypto-collectibles, crypto-art and much more – laying the foundation for entirely new multi-billion dollar businesses to emerge”


With the recent explosion in usage from God’s Unchained, it’s reassuring to see the substantial growth within the Ethereum ecosystem despite the slow-down on ether’s price action. Moreover, it is comforting to see other aspects of Ethereum begin to see usage outside of crowdfunding (in the form of ICOs) and Decentralized Finance (DeFi). All in all, non-fungible tokens have a promising future as the community continues to discover new and interesting use cases for a digitally verifiable unique token.  

If you’re interested in staying on top of emerging token economies and the tokenization of assets, sign up for Token Tuesdays and follow us on socials.


Writers: Lucas Campbell —
Cooper Turley —

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