A Look at Nansen's Top 6 NFT Indices: A New Approach to NFT Investing

The Nansen NFT Index is a trusted bellwether for the NFT market, and this update raises the bar for quality financial infrastructure to support the growing NFT industry of users.

Based on the popular blue-chip stocks, the introduction of Nansen expands the scope of the index, thereby giving all clients a basic understanding of the rapidly emerging NFT market.

Nansen uses 6 NFT indices to track market activity on the Ethereum blockchain.

The Nansen index defines the types and subtypes of NFTs based on the use case.

Through these indices, all Nansen users can explore and diversify their participation in different areas of the NFT market.

NFTs are a rapidly emerging asset class and it is a challenge to track innovation in the market. Despite the importance of a framework for classifying NFT use cases, there is currently no relevant definition. To define this gap, Nansen designed six indices to track NFT market activity on the Ethereum blockchain using the ERC-721 and ERC-1155 standards.

These indices include:

Nansen NFT-500
Nansen Blue Chip-10
Nansen Social-100
Nansen Gaming-50
Nansen Art-20
Nansen Metaverse-20
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Depending on the use case or application, each index is designed to track activity in the main categories of NFTs. For design metrics, more than 500 NFT samples were analyzed and reviewed.

new investment signal
The Nansen NFT Index allows investors to determine how a market sector is moving relative to other market sectors and the market as a whole. The performance of the Nansen NFT Index over the past 30 days shows three general trends. Social and Metavers NFT is relatively stable.

The daily market capitalization of the Social NFT sector

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Daily market capitalization of the Metaverse NFT sector

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One possible reason for this phenomenon is that Social NFTs have suffered greater competition in the NFT market. Therefore, the situation of asymmetric price information has been reduced. To date, Socail NFTs account for 50% of the daily NFT market. Market participants have more information that they can use to evaluate the price of Social NFTs. Network effects are also particularly strong due to the community nature of these NFTs. Compared to other NFT fields, Social NFTs have been around for longer. Back in 2017, Social NFTs started to be adopted (for example, Crypto punk); it can be said that the industry is relatively more mature.

Also, while the concept of integrating NFTs into the Metaverse is unprecedented, the concept of the Metaverse itself is not new (e.g. Second life proposed it in 2003). We hypothesize that familiarity with the concept of the Metaverse, as well as the acceptance of the space by other large companies (such as Facebook's rebranding to Meta and the Decentraland (MANA) trust provided by Grayscale), may be a factor in the instability of Metaverse NFTs . The Social-100 Index shows that as of February 21, 2022, Social NFT products lead the NFT market with a 30-day return of 24%. Meanwhile, the Metaverse-20 index has returned -3.9% over the past 30 days.

Gaming NFTs have underperformed in the past 30 days compared to other NFT types