Nansen's Coverage of NFTs on Arbitrum One: A Deep Dive

Nansen's Coverage of NFTs on Arbitrum One: A Deep Dive

Nansen’s on-chain insights point to the growing adoption of NFTs on Arbitrum One via the Treasure Marketplace.

Nansen Lite now offers NFT Market Overview and Trends for free via email sign-up on the Arbitrum One network. Full Nansen subscribers have the added benefit of Mint-Master and being able to drill-down into individual projects and wallets using NFT God Mode, NFT Wallet Profiler and NFT Item Profiler. This coverage will enable users to discover opportunities, perform due diligence and make strategic decisions when investing in Arbitrum-based NFT projects. 

Using Nansen’s new coverage we found that:

  1. The transaction volume processed and the number of transactions completed on Arbitrum One has increased in Q1 of 2022 compared to Q4 of 2021. Year-to-date, we have witnessed 205% growth in Arbitrum One NFT users. 
  2. The growth in both new and returning users remains volatile on Arbitrum One. 
  3. Contracts with 1000 or more sales per week and 10 or more sales per week have experienced growth since the start of the year. 
  4. 4.5% of wallets have currently made a minimum of a 100% return on investment in their Arbitrum-based NFTs with the top 20 wallets all exceeding 10,000%. This was enabled in large part through Treasure’s free mint model which launched the popular Smol Brains and Legions NFTs.

With the benefits of low gas fees, it is no surprise that more users are switching to Arbitrum One, allowing the protocol to lock in over USD 4 billion in total value. Among the many developments on Arbitrum One, the Treasure Marketplace has emerged as its biggest marketplace for NFTs denominated in Treasure’s native token $MAGIC. To understand how Nansen can support data coverage for this community, we conducted an informal focus group session with several Arbitrum One users. Astrololo, an Arbitrum enthusiast, pointed out that:

“Arbitrum has low network fees. It allows users to do much more for less. For example,  it allows you to play on-chain games such as on ETH. You need to pay like $80 to do a transaction. On Arb[itrum], you pay under $1, and you're always guaranteed a mint most of the time. It allows creators to make games that require interaction and constant gas fees while making it something people can afford to play” - Astrololo

Additionally, Treasure’s free mint model and organic community growth have been one of its critical strengths. One user of Atrbitrum One, Travis, believes that “a solid [Arbitrum] community is the core for all successful projects, as they are able to withstand changes in the market performance, and any external attacks/breaches on the project, seen in the recent events.” Another Artibirum user, sisu, shared:

“The thing that sets us apart is that everything on the Treasure Marketplace feeds back into each other. It's all denominated in $MAGIC, and each listing is part of the larger whole, with their respective games, increasing the network effects of the ecosystem.” - sisu

Responding to the enthusiasm of Arbitrum One and Treasure users, Nansen asked users how we could provide data coverage for this community. Arcanic shared: 

“Nansen can help participants on Treasure/Arbitrum by not only bringing over the same features and utility as on L1 but also gather[ing] and collect smart data regarding the tokenomics of the various collections on Treasure, possibly creating tools that can help visualize data such as yield when inputting certain values (i.e. NFTs held - boosts)”. - Arcanic

Adopting Arbitrum One users’ feedback, Nansen now offers users a network of real-time dashboards centered on the NFT-related activities on Arbitrum One. 

Arbitrum One’s Coverage on NFT Paradise

The following are trends gathered through Nansen’s coverage of NFT-related activity on the Arbitrum One Network and Treasure Marketplace.

1. The transaction volume processed and the number of transactions completed on Arbitrum One has increased in Q1 of 2022 compared to Q4 of 2021. 

Transaction Volume on Arbitrum One

Number of transactions on Arbitrum One

The volume of transactions and transaction count decreased drastically during the first week of March; this could reflect the exploit incident on Treasure, where Treasure instructed users to delist NFTs after the exploitation. Similarly, this trend was reflected in the secondary sales market on the Treasure Marketplace. 

Transaction volume on Treasure Marketplace

2. We see a growth in users transacting on Arbitrum One. Year-to-date, we have witnessed 205% of growth in Arbitrum NFT users. 

Year-to-date, Arbitrum One has processed 75.9k ETH. Additionally, 19.3k unique wallets have made NFT-related transactions on Arbitrum One. Of the volume processed and unique wallets transacting, the Treasure Marketplace accounted for a volume of 73.5k ETH – 96.8% of total transactions on Arbitrum One.

3. The growth in both new and returning users remains volatile on Arbitrum One. 

Buyers per Day on Arbitrum One
Buyers per Day on Treasure Marketplace

One possible reason for the volatility in returning and new users may be that the NFT transactions on Arbitrum One are still in its early growth phase. However, when comparing the Buyers per day on the Treasure Marketplace, we can see a distinct growth in returning buyers returning to Treasure. 

4. On Arbitrum One, contracts with 1000 or more sales per week and 10 or more sales per week have experienced growth since the start of the year.

While the growth in contracts with 1,000 or more sales per week experienced a much more visible growth, the contracts with 10 or more sales had a less volatile growth trajectory. This could mean that small projects or peer or community-driven projects are gradually sustained in the Arbitrum One and Treasure ecosystem. 

5. “SoTiny” has the most considerable NFT-related profit on Arbitrum One: 610 ETH in profit. 

Using information derived from our Profit Leaderboard, we analyzed a sample of 665 wallets transacted on the Artbirum network. Out of 665 wallets, 389 wallets were in profit and were, on average, 28.4 ETH in profit. The remaining 276 wallets were in a deficit and were, on average,  -28.1 ETH in deficit. 

Additionally, about 4.5% (30 out of 665) of the wallets made a minimum of 100% return on their investment. When analyzing profits as a percentage of initial spending, we found that the average profit was approximately 21.3%, with a max profit return of 1,797% for one wallet. The most significant loss was about -1%. Perhaps, the free mint model is a facilitating factor behind such gains. 

6. The top 5 NFT collections transacted on Treasure include Smol Brains, Legions, Seed of Life, Tales of Elleria, and Realm.

Top 5 NFT Collections on Arbitrum One
Most expensive NFT Collections on Arbitrum One

For users new to Arbitrum One’s NFT ecosystem, NFT Paradise’s Market Overview provides detailed information on notable NFT collections transacted on Arbitrum One. Furthermore, Legions and Smol Brains are leading as some of the most expensive purchases on the Arbitrum One. 

Investigating Smol Brains using NFT God Mode

Capitalizing on the unique insights provided by Nansen’s NFT God Mode, we can zoom in on such notable collections. For example, we can see that the average price of Smol Brains has been trending downwards. However, it appears that the sale prices of Smol Brains have converged into a more consistent range (i.e., less volatile sale prices). In addition, Nansen’s NFT God Mode enables users to do deep dives on projects of interest, such as understanding the price actions on an Arbitrum NFT collection, how Smart Money interacts with the collection and the growth of unique holders of that specific collection. 

Investigating Smol Cars using NFT God mode

Entering the contract address of any Treasure NFT into NFT God Mode allows a comprehensive breakdown of top holders, unique addresses and a variety of key metrics.   

In addition, when combined with the broader Arbtirum One coverage offered by Nansen, users can now dig deeply into associated tokens such as the smart money movement for the $MAGIC engine underpinning Treasure. 

NFT God Mode for the $MAGIC token tracking Smart Money trades and top balances

Final comments

While OpenSea may have the lion’s share of the NFT market, the popularity of NFTs is growing by the day. With that comes the demand for what other protocols have to offer. Nansen’s on-chain insights point to the growing adoption of NFTs on Arbitrum One via the Treasure Marketplace. We believe that Arbitrum One, and thus the Treasure Marketplace’s coverage, will enable users to discover opportunities, perform due diligence and make strategic decisions when investing in Arbitrum-based NFT projects. 

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