In the NFT space, Nansen’s indices highlight interesting tendencies

Despite a corrective 28.8 percent decrease over the past 30-days, the platform’s newly-introduced NFT-500: ETH index reveals a 68.5 percent gain for the top-500 Ethereum NFTs since the beginning of the year.

Nansen, a well-known blockchain data company, has released a comprehensive twelve-page analysis assessing the success of Ethereum-based nonfungible tokens, or NFTs, since the turn of the year, revealing a number of intriguing indicators as to the ecosystem’s economic and cultural future.

The report considers the vast potential for comparable models focusing on NFTs, arguing that their widespread use could significantly improve both education and adoption. It cites the profound impact of traditional financial indexes such as the Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite.

Nansen released six NFT indexes last month: Nansen NFT-500, Nansen Blue Chip-10, Nansen Social-100, Nansen Gaming-50, Nansen Art-20, and Nansen Metaverse-20, all of which were designed to “raise the bar for quality financial infrastructure that supports the growing depth of the NFT industry,” according to the accompanying blog post.

Nansen’s NFT-500 index combines the performance of the top 500 NFT collections on Ethereum for both ERC-721 and ERC-1155 across market capitalisation of Ether (ETH) and USD. Since January 1, 2022, these collections have accounted for 85.4 percent of daily market volume.

When examining the performance of the NFT-500 index from January 1, 2022, to March 9, 2022, it was discovered that the price of assets increased by 68.5 percent when evaluated in ETH and 20.9 percent when measured in USD.

The performance of the ETH index during the last 30-days, as seen in the line graph below, is starkly different, with -28.8 percent and -38.5 percent in ETH and USD, respectively.

“The index level is the worth of an investment compared to its value at one set point in time,” said Louisa Choe, a research analyst at Nansen, in response to our request for particular explanation on the calculation technique for the numerical figure displayed on the y-axis. On January 1, 2022, the index began at 1,000.”

Multiple media outlets spoke with Choe to have a better understanding of how Nansen sees quantitative data sources like NFT indexes positively influencing the industry.

Before revealing the service’s intended purpose, Choe remarked, “We believe that trustworthy data (both on a broad market level, such as through the index, and micro-level, such as on a wallet basis) can allow market participants to better navigate this environment.”

“One of the main goals of the index was to help users distinguish between hype and reality, or to improve their due diligence process.”

Nansen is well-known for its decentralised finance (DeFi) services, in addition to delivering NFT analytic dashboards and trend data for both retail and institutional investors over numerous timeframes. The platform began integrating data from Solana (SOL), Arbitrum, Fantom (FTM), and Avalanche (AVAX) in November 2021.

In June 2021, the company raised $75 million in a Series B investment led by Accel, with participation from Andreessen Horowitz (a16z) and Tiger Global, among others, and succeeding their $12 million Series A just six months previously.

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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