- The incident led to a misleading surge in NFT mint volume, involving 430k ETH, which was initially misinterpreted as a spike in NFT market activity.
- Nansen has indicated that the NFT market is not yet back to its full strength despite recording growth in Q1 2023.
Blockchain analytics platform Nansen has announced the removal of Lido NFTs from its NFT Paradise service. Nansen’s NFT Paradise is a platform offering detailed analytics on the NFT market, helping users understand transactions, trends, and dynamics. Nansen’s decision was influenced by user votes following a recent mishap involving Lido, a decentralized finance (DeFi) platform. Lido’s staked withdrawal requests were mistakenly represented as NFTs, leading to an unexpected increase in NFT mint volume.
Lido stated last month that users would receive NFTs as part of the deposit withdrawal procedure. Any time a user unstakes Ether, the decentralized finance protocol issues NFT certificates, which are used to claim their ETH tokens.
The massive spike, which involved a whopping 430k ETH (approximately $780 million), was initially interpreted as a surge in the NFT market. However, closer investigation revealed that this was due to a technical issue rather than genuine market activity. Nansen went on to clarify that the NFT market is not yet back to robust health, tempering expectations for a swift recovery in the near future.
Nansen has previously stated that throughout Q1 2023, NFT trading volumes in Ethereum (ETH) and USD were on the rise. Specifically, a total of 2,839,354 ETH were transacted in Q1, compared to 1,525,471 ETH in Q4 of the previous year. March 2023 marked a yearly high in NFT sales. This surge was largely driven by Blur, an emerging NFT marketplace that quickly overtook established marketplaces to lead the industry in sales.
Despite the uptick in sales and users during Q1, a slowdown in the NFT market was observed in April. Volumes transacted in April saw a drop compared to March, and this trend appears to have continued into May. The total number of NFT holders also increased modestly in Q1, 2023, reaching 13,999,528 compared to 11,233,872 NFT holders in Q4, 2022.