Introduction / Glossary

What is Optimism?

Optimism is a layer 2 chain essentially meaning that it needs Ethereum, layer 1 chain, to operate properly. Transactions that take place on Optimism are still posted to the mainnet where they are validated. Optimism is a helpful tool to help scale Ethereum. Essentially what it does it "rolls up" many transactions into one and then sends different receipts back to Ethereum. This helps reduce gas fees.

\n What is an NFT?

A non-fungible token, NFT, is essentially a digital asset that could represent just about anything and is often built using the same kind of programming as cryptocurrencies. It could represent anything from the real world ranging from objects to music to in-game items. They are sold online and bought using cryptocurrency. Some NFT’s come with utility such as the flipside NFT godmode that allows users access to all of their bounties.

Metrics / Methodology

The goal of this dashboard is to try and see if there is a correlation between the price of OP and the functionality of their NFT marketplace. To do that we will be looking into three different sets of analysis and see what we can learn. We will look into the total sales volume and sales in general, we will look into user behavior and onboarding, and finish off with profitability. By using these different metrics we will be able to figure out if there is a correlation and what kind there is from the data. If there is a correlation we would expect the activity to decrease, however, if there is a correlation that happens to be negative it could point to a much more promising truth for Optimism in that users are continuing to use their Layer 2, but even more, meaning the decrease in value of OP would be correlated to the bear market, not the activity and success of itself.

This was made possible thanks to flipside crypto and their databases. For this to be accomplished I used optimism.core for finding the information.

Below you will find a more in depth breakdown of the different sections and organization of the dashboard.

1. Get the Price of OP

2. Compare it to NFT Sales Volume and Total Sales

   1. total sales volume rollings
   2. number of sales rolling
   3. what is selling
   4. top 100 NFT’s being sold over time
   5. total

3. User stats

   1. new sellers / buyers
   2. unique buyers and sellers per day
   3. total sellers
   4. what users buying for the first time

4. Profitability

   1. total profitability of all NFT’s
   2. who’s made the most profit
   3. what NFT’s are making the most profit
   4. Top 10 that make profit what are they and how do they look over time

NFT Sales Volume Observations

1. Total activity and volume of sales has actually been going up a lot this year contrary to the price of OP
2. The only similarity between the highest grossing NFT’s and the highest total number of sales is the project Optimism
3. There are 138 different NFT projects that came to a total of 177,000 sales, grossing over $5,000,00, with an average sale of roughly $29
4. There were very few sales occurring until the end of April and have been very consistent since throughout the bear market

User Activity Observations

1. There are more buyers than sellers, which tends to be normal in most markets
2. Much like the entire market since the end of April sales have been higher and new users coming in and making their first purchase for the first time is no different and most likely is a major reason for the consistent increase in sales
3. Mirror, Optimism, and Optimistic explorer take up about 44% of all of users first purchases
4. Mirror was purchased over 14,000 times by users making their first purchase
5. There seems to be a negative correlation between user onboarding and the price of OP

Profitability Observations

1. It is tough to make a profit in this market and user are probably better just holding onto their NFT’s and waiting for the market to change
2. That being said although the profit and profit margin look discouraging the overall profit margin was only -16.65%, which is not as bad as it seems
3. May was the best time to be selling for profit
4. Almost every NFT was sold at a lost and the profit margin for those who made a profit regardless of how much money was always less then 0.5
5. There seems to be a correlation between loss of money and the value of OP

Conclusion

This was a very interesting conclusion to come to, but the only correlation between the price of OP dropping and user activity, total sales and volume, and profitability, is that users are losing money when selling NFT’s. That being said the market is more active than it ever has been in 2022. That means there is a correlation, but that correlation is negative. What this most likely points to is that the market may be down, but that does not mean inactive. If the OP NFT marketplace is consistently getting more and more new users and the revenue continues to grow than it can be assumed that once the bear market begins to turn into a bull market that the price of OP will go up and hopefully the profitability of this marketplace will as well, due to the correlations that I found today. What is also particularly interesting is that there seems to be a negative correlation between user growth and total revenue from the OP price, which also could be influenced by the price of ETH as well. Overall, very interesting to learn that the OP NFT marketplace is growing and sustaining itself, although not profitable yet, it seems there is a high possibility of that in the future!