Polygon NFTs

Introduction: Polygon is a popular Layer 2 on top of Ethereum known for fast transactions and low fees. The purpose of this analysis is to understand the adoption, usage and impact of NFTs on the Polygon blockchain.

Methods:

Analysis is from January 1st, 2021 - July 14th, 2022.
NFT Transactions were defined as distinct tx_id where to_label_type = ‘nft’ in the flipside_prod_db.polygon.transactions table.
NFT sales prices and buyers/sellers were pulled from NFT transactions in the flipside_prod_db.polygon.udm_events table where the to/from addresses were not the OpenSea contract 0xf715beb51ec8f63317d66f491e37e7bb048fcc2d.
Used the old Polygon tables to get data older than June 2022, since most of the NFT activity occurred then.

Question #1: How popular are NFTs on Polygon?

Question #2: How many Polygon users started off with NFTs?

Questions #3: Who made the most profit?

95% of Polygon transactions are not labeled, so analysis should be taken with a grain of salt since transactions with missing labels may contain NFT data. However, using this filter to find NFT transactions, we find that 98% of NFT transactions occurred on OpenSea.

It appears Polygon NFTs were launched on OpenSea in June 2021 and grew pretty consistently until peaking in January 2022 and declining since, along with MATIC price, which seems to be correlated.

Average monthly NFT sale prices were high in the beginning but declined 2 months later and haven’t come with 25% of prices during the first 2 month since.

Conclusion

NFT prices were highest in the first months after initially launching in June/July 2021, but are down ~80% now.
NFT transaction volume is correlated with MATIC price.
Only 1% of new users are acquired through NFTs, so potential opportunity for user acquisition.
Despite many degen’s dreams of sitting at home, flipping NFTs and becoming an instant millionaire, 62% of NFT investors are down and <10 have become a millionaire.

Only 8 NFT millionaire traders and 62.5% of users are down on their NFT investments. Profit was calculated by subtracting the sum of all NFT buys from sum of all sells. Note: Only realized profits were calculated so if a user has many valueable NFTs, there value was not taken into consideration.

Daily Active NFT users held steadily over 10k from September 2021 until dropping in March 2022. Daily Active users are either buyers or sellers of an NFT on a given day.

Only 1.4% of new users buy an NFT on the same day as their first transaciton.