OpenSea sets a new monthly sales record of $5 billion

As OpenSea breaks records, LooksRare makes waves, and Bored Apes rides celebrity attention, the wider NFT sector is expanding. With more than $5 billion in trading volume between Ethereum and Polygon, OpenSea enjoyed a record-breaking January.

Other marketplaces, such as the Bored Ape Yacht Club, Azuki, World of Women, and NBA Top Shot, all saw significant growth last month.

Between Ethereum and Polygon sales, leading NFT marketplace OpenSea generated over $5 billion in total trading volume in January, shattering the previous record set in August 2021.

OpenSea had over $4.95 billion in Ethereum trade volume in January, according to public blockchain statistics compiled by Dune Analytics, plus over $79 million on Polygon, an Ethereum sidechain scaling solution. Both records are for a single month on each platform.

OpenSea's previous Ethereum high was in August 2021, when the NFT market erupted after a slow summer, with a monthly trading volume reaching $3.4 billion. In the meantime, the previous Polygon record of $76 million was reached in December, as NFT trading on the scaling solution has significantly expanded in recent months.

OpenSea had its finest single day in months on the Ethereum front on January 31, with $233 million worth of NFT trade. It's the fourth day in a row that Ethereum trade has exceeded $200 million on the exchange.

OpenSea appeared to be on course for an even bigger win at first. However, transactions received by newer aggregators like Genie and Gem were double-counted in the Dune Analytics dashboard established by Richard Chen, a general partner at crypto venture fund 1confirmation. According to a tweet from Chen, it was corrected on January 20, slashing some earlier trading volume estimates.

Even after the data was adjusted, OpenSea still surpassed its previous Ethereum high as the NFT market rises to new heights. OpenSea also announced a $300 million Series C investment in early January, valuing the company at $13.3 billion.

But it wasn't all plain sailing for OpenSea in January. Due to a UI flaw, certain OpenSea users' high-value NFT collectibles were sold for a fraction of their projected value, and the company has so far paid out $1.8 million in ETH to impacted customers.

Last month, OpenSea revealed plans to cap the quantity of NFTs that can be created using its own smart contract (i.e., computer code), effectively halting certain ongoing initiatives. The news sparked widespread outrage, prompting OpenSea to backtrack and announce that it will instead focus on other measures to minimize the generation of duplicated and fraudulent NFTs on the platform.

Last month, OpenSea revealed plans to cap the quantity of NFTs that can be created using its own smart contract (i.e., computer code), essentially halting certain ongoing initiatives. The announcement sparked widespread outrage, prompting OpenSea to backtrack and announce that it will instead focus on other measures to minimize the generation of duplicated and fraudulent NFTs on the platform.

A market on the rise

Despite a bad month for cryptocurrency prices, OpenSea is a leading indicator of the NFT market's momentum, which has continued to rise. As the crypto market declines, some traders may perceive valuable, blue-chip NFT enterprises like the Bored Ape Yacht Club and Doodles as a store of wealth. Some may be taking advantage of the price drop to make a large investment in NFTs.

Earlier in January, Dragos Dunica, co-founder and chief data officer of analytics firm DappRadar said,

"Investors are currently getting a discount for the most hyped digital asset class, at least on fiat terms." He added, "As NFTs maintain their upward trend, this discount might turn into a neat return on investment as crypto prices pick up too."

An NFT functions as a proof-of-stake deed of ownership for digital property, such as an image, video file, video game item, or anything else. According to data from DappRadar, the market's overall transaction volume increased to an expected $23 billion in 2021.

So far, that momentum has carried over into 2022, and OpenSea isn't the only platform that experienced a lot of trading activity in January. LooksRare, a new Ethereum marketplace, is a good example although it comes with some drawbacks.

The marketplace, which debuted on January 10, is based on its own LOOKS token, which was given out for free to a restricted group of OpenSea users to entice them to join the network. NFT traders that use LooksRare have also been compensated using LOOKS tokens.

Unfortunately, some investors have tampered with the system by selling NFTs at exorbitant rates back and forth across their own wallets, a practice known as wash trading. In recent weeks, LooksRare has produced billions of dollars in fraudulently inflated trading volume from collections like Meebits and Terraforms, which trade without royalties owing to the creators.

Crypto analytics firm CryptoSlam announced on Friday, January 28 that it had discovered over $8.3 billion in wash trading on LooksRare. Dune Analytics reported a total trading volume of $9.5 billion at the time, implying that 87 percent of trade on the site was related to falsified sales at the time.

However, a brand new NFT marketplace in January could have more than $1 billion in legal trading volume—plus activity throughout the weekend and Monday. This is in addition to OpenSea's rising Ethereum engagement.

Magic Eden, the top marketplace on the Solana blockchain, appears to have had a good month as well. As of this writing, DappRadar's estimates indicate more than $531 million in trade activity over the preceding 30 days—a nearly 89 percent increase over the previous 30-day period.

The leading projects

The Bored Ape Yacht Club profile picture project, which recently attracted celebrities including Justin Bieber and Neymar Jr., was undoubtedly the most successful NFT collection in January.

Last month, the primary collection generated $311 million in secondary trade volume, up over 101 percent from December, according to CryptoSlam. When the Mutant Ape Yacht Club and the Bored Ape Kennel Club collections are merged, the total exceeds $600 million. To date, the three projects have surpassed the $2 billion mark.

Additionally, since opening in January, Azuki, a fresh new profile image project, has surpassed $249 million in secondary market volume, while the World of Women project has increased by over 1,100 percent to over $69.5 million. World of Women hired renowned music entrepreneur Guy Oseary to represent it with entertainment and licensing projects earlier this month.

Dapper Labs had a good month in January as well, with over $59 million in secondary trade volume for its NBA Top Shot) product, which operates on the Flow blockchain. That's up 52% from December, and Top Shot also had the most NFT sales in a single month, with over 1.8 billion dollars.

Dapper also debuted its UFC Strike platform for the Ultimate Fighting Championship in January, making $5 million from the sale of 100,000 NFT packs at $50 each. When UFC Strike's secondary marketplace opens on February 7, trading will be available.

However, not every significant NFT project surged in January. With $124.2 million in trade volume, CryptoPunks had its lowest month of trading volume since last June, a decline of nearly 28% from December. The Bored Ape Yacht Club, which offers additional privileges to holders and has recently attracted renowned holders, has been regarded as gaining headway on CryptoPunks.

In addition, Axie Infinity, the most popular Ethereum-based game, continues to see a reduction in NFT trading volume in January, dropping to around $126.5 million. According to CryptoSlam, this is a 58 percent reduction from December and a significant dip from November's total of approximately $754 million.