Bored Ape Yacht Club (BAYC), one of the most popular NFT collections, is facing a decline in popularity as its floor price dropped to its lowest in nearly two years. The floor price, which represents the lowest price a seller wants for an NFT in the collection, dipped to a 12-month low of ETH, indicating waning public opinion in the collection. However, experts argue that focusing solely on the floor price is not enough to assess the value of an NFT.
Various factors contribute to the valuation of NFTs, including rarity, traits, and cultural significance. Despite the drop in floor price, Apes with rare traits like gold fur are still valued above ETH. This decline in popularity for BAYC can be attributed to its marketing strategies during the bull market, which catered to an elite and insular community. As the market cools down, many collectors have opted to cash out, leaving the project to legitimize its cultural value.
In addition to the decline in floor prices, NFT creators are experiencing a decrease in royalty payments from secondary sales. Data analytics platform Nansen reported that royalty payments reached their peak in April, totaling nearly ETH in one week. However, in June, creators collectively earned ETH, indicating a significant decline in earnings. This decrease is partly due to the competition among NFT marketplaces, leading to changes in royalty payment policies. Platforms like Blur and OpenSea have enforced a minimum royalty payment of ETH. Although collectors have the option to pay more, this practice seems uncommon.
Despite the declining payouts, blue-chip NFT collections continue to receive substantial royalties. Yuga Labs, the creator of Bored Ape Yacht Club and other collections, has earned nearly ETH in collective royalties. This shows that even with the drop in popularity, established collections still hold value in the NFT market.
In other news, Tom Brady’s sports collectibles platform Autograph is reportedly facing troubles and changing its strategy. Brady entered the NFT space in and raised over million from investors for Autograph. However, the platform has experienced financial difficulties, leading to a shift away from crypto and towards generic celebrity loyalty programs.
Despite Autograph’s challenges, major brands and sports teams are still embracing NFTs. This week, Swiss sports and lifestyle brand On released its own sports NFTs. This highlights the continued interest in NFTs within the sports industry, despite the hurdles faced by some platforms.
As the NFT market experiences fluctuations in floor prices and royalty payments, the future of the industry remains uncertain. However, it is clear that factors beyond the floor price alone should be considered when assessing the value of an NFT.