Analysis of NFT-based public chain, L2 and side chain, what is the potential of the future?

1. NFT development history and industrial value chain

1.1 Recently, NFT has developed rapidly, and the transaction volume has risen sharply.

Recently, NFT has developed rapidly, and the transaction volume has increased significantly. According to Dune Analytics data, Opensea’s transaction volume reached an all-time high of $3.426 billion (equivalent to 1 million ETH) in August 2021, a 941% increase from July. The star product in NFT, Cryptopunks, contributed 200,000 Ethereum transactions in August.

After August 2021, the trading volume of Opensea will gradually decline, but after mid-to-late November, it can be seen from the daily trading volume of Opensea that the NFT boom has recovered. In January 2022, the monthly transaction volume of Opensea (based on Ethereum) exceeded 4 billion US dollars, and there are many star products.

Figure : Opensea monthly trading volume Opensea daily trading volume

Ethereum Source: DuneAnalytics

1.2 The NFT industry value chain is divided into three layers

At present, the NFT industry value chain is divided into three layers. For the infrastructure layer, it mainly covers public chains, side chains/Layer 2, token standards, development tools, storage, wallets, etc.

Infrastructure projects are usually the first to benefit from the upturn in industry sentiment. Taking public chain and side chain/Layer2 as an example, it captures the NFT primary market Mint and the gas fee of secondary market transactions; taking storage as an example, the recent high growth of Arweave's storage business is partly due to the prosperity of the NFT market .

For the protocol layer, it mainly includes NFT minting protocol and primary market, liquidity protocol, DeFi + NFT, etc. In the protocol layer, art/collection and game/metaverse projects are more outstanding - the cumulative transaction volume of BAYC has reached 2 billion US dollars, the cumulative transaction volume of Cryptopunks has reached 1.9 billion US dollars, and the cumulative transaction volume of Axie Inifinity has reached 3.3 billion US dollars.

For the application layer, it mainly includes pan-NFT vertical applications, pan-secondary markets, and finance. Among them, the secondary market represented by Opensea occupies a large volume and occupies a pivotal position in the market.

This article will explain in detail the public chain, side chain/Layer 2 part of the NFT industry value chain