Low Gas Fees Boost OpenSea Trading 12%

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The leading NFT Marketplace bounces back

A reduction in the cost of gas fees on Ethereum has stimulated an increase in trading on the NFT marketplace OpenSea. According to data from DappRadar, the number of traders on Opensea increased by 12% to over 12,000 in the past 7 days. This increase of traders stimulated over $25.8 million in transaction volume. 

Last week we reported on how blockchain game Axie Infinity was quickly catching up with OpenSea as the most active NFT marketplace. Much of this activity for Axie Infinity has come about as a result of launching its own Ronin sidechain in order to circumnavigate gas fees for simple actions in the game. 

Now, as gas fees start to normalize on Ethereum amidst a market cool down. OpenSea is seeing a slight surge in activity. Still, further increases for Axie Infinity in the last few days mean it is still getting much closer and has surpassed Opensea in terms of traders. However, the Axie Infinity Marketplace is still a few million short on volume. 

Why gas fees matter 

Simply put, Ethereum gas fees represent a fee for a transaction on the network. Actions such as swapping tokens, buying a new Axie, or purchasing an NFT from a marketplace, all require a gas payment for the service. The more activity the network has to deal with, the higher these fees become.

High fees are quite acceptable when moving large amounts of value. But not when trying to complete a small $10 transaction, for example, and paying more than that amount in fees. A quick glance at gas fees over the last three months reveals the situation more clearly. 

As you will see, there has been a huge fluctuation in the price of gas as the Ethereum network came under increasing pressure. Peaking at almost $75 in May, gas fees are now fluctuating at a much more reasonable level around $4. At the time of writing, Ethereum gas fees per transaction are around $3. This far lower fee for a transaction means that digital collectible buyers can once again purchase NFTs without being crippled by fees and OpenSea is benefiting directly. 

NFTs ride the storm

Sales of NFTs have been holding up well amidst the recent crypto price crash as investors look to NFTs as a store of value and continue to engage with the idea of low-value digital collectibles.  NBA Top Shot last week received a nice 50% bump in sales week-over-week whilst low-value digital collectibles on Wax appear completely unaffected by the recent crypto crash. 

NFTs on Ethereum had been suffering from gas fee issues for a while now. Leading to the rise of multiple NFT projects on alternative chains. Projects such as Tiny Titans and CrypoBunks on Binance Smart Chain and Aavegotchi on Polygon have attempted to lure NFT enthusiasts with similar projects minus the fees. It will be fascinating to observe how these now lower gas fees impact digital collectibles on Ethereum overall.  

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