NFT Market Heats Up: On-Chain Data Shows Rising Ethereum Gas Fees

• Increasing competition among the top marketplaces and new projects entering the market is driving positive sentiment.
• Upstart marketplace Blur recently toppled OpenSea to become the top platform for digital collectables.

On-chain data shows an increase in activities based on the Ethereum application layer – partly due to high NFT transactions – an indication that the market for digital collectables could be preparing for a comeback.

Per a report compiled by Glassnode Monday, the median transaction gas price on Ethereum has spiked to 38 Gwei, comparable to a range of between 10 and 20 Gwei, equivalent to $0.5 and $2, in the past nine months. The analytics firm maintains that the uptick signifies a possible network resurgence. Gas prices fluctuate depending on the demand for the network from users seeking to add their transactions to a new block.

Among the factors driving NFT transactions on Ethereum is the increasing competition between OpenSea and its upstart rival, Blur. The latter, launched in 2022, recently overtook the dominant OpenSea, taking over 78% of the total NFT transfer volume since its airdrop on February 14. Blur’s differentiated approach to onboard professional traders gives it a hedge over OpenSea’s preferred segment of creators and collectors. Blur – which now commands a 34% market share compared to Opensea’s current 15% – also charges modest trading fees and optional royalty payments.

Gas usage for Ethereum NFT transactions up 97% in two consecutive months

Overall, the total gas usage on Ethereum, specifically tied to NFTs, has jumped to 97% in two consecutive months, according to the report, and is now approaching the highs last seen during the 2021’s NFT boom. Besides the competition between Blur and OpenSea, popular projects are also launching new NFTs, notably Yuga Labs, Doodles, and Moonbirds.

Glassnode noted that despite the renewed interest in the asset class, there is little to no effect on the number of new addresses on Ethereum, subdued at 40% lower compared to the past year – meaning the top marketplaces, Blur and OpenSea – are attracting the same users they have had before. It remains to be seen how the rivalry between the duo plays out – considering the plans for the former to have a second airdrop for loyal customers.

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