Unprecedented Selloff in the NFT Market
The last three days saw the Non-fungible Token (NFT) market experience an unprecedented selloff. The floor price of several prominent, otherwise known as ‘blue-chip’, NFTs saw a record-low plunge. The spillover effect was a significant shock with over 1,200 NFTs being liquidated.
Risk of Liquidation
According to data from the NFT analysis site, Snow Genesis, hundreds of NFTs used as collateral for loans are now at risk of being liquidated. While some of these debts have been settled and repaid, several NFTs have already been listed for auction. The rapid switch of these NFTs to auction listings underline the severity of the situation.
Recent NFT Liquidations
The table given below contains data from the Snow Genesis, pointing to the most recent NFT liquidations occurring at the time of writing.
Impacted Investors
CirrusNFT, Wumbo Labs, elucidated that several investors were impacted during this period. Those investors who took loans on their blue-chip NFT, including NFTs from Azuki, CloneX, MAYC, and BAYC experienced this harsh impact directly. Beanz NFT collection recorded the most liquidation as 636 of its NFTs—equivalent to 3% of its total supply— were affected.
Alarming Liquidation Pace
CirrusNFT stated his concern, highlighting the daily liquidation average for last year, which stood between 10-15 NFTs. Comparatively, the recent rate of liquidations is indeed alarming.
“Good news is that the rate of liquidations has slowed drastically over the last few hours and there aren’t a crazy amount of underwater loans left.” He added.
NFTs’ Floor Price Tanks
Despite an upward trend in the broader crypto market over the past week, the floor price of several NFT collections massively plunged.
Bored Ape NFTs Price Crash
Bored Ape NFTs saw its floor price crash below 30 ETH on July 2, its lowest value since October 2021, before bouncing back to its current worth of 31.5 ETH, according to Coingecko data. In its heyday, Bored Ape NFTs sold for over 500 ETH, with several A-list celebrities, including Justin Bieber, reputedly spending over $1 million on one of the collections.
Azuki’s Substantial Loss
Azuki also witnessed its holders experiencing considerable losses after the release of its Elementals collection. The floor price of the collection fell by more than 20%, leading to its community members proposing a lawsuit against its founder Zagabond for 20,000 ETH.
Other Blue-Chip NFTs Impacted
Meanwhile, other blue-chip NFT collections like DeGods, Pudgy Pegions, Azuki Elementals, and BAKC, Moonbirds also faced significant depreciations in their value during this period.
