Author: Sanqing, Foresight News
Original Title: From the $70 Million Myth to $9 Dolls, Are NFTs Really "Dead"?
On January 5, the NFT Paris developer conference, originally scheduled for February, was suddenly canceled. The banks of the Seine, once alive with all-night parties, are now left with only a cold official tweet: "The market crash has hit us hard. Even with aggressive cost-cutting measures, we are still unable to sustain it."
Five years ago, digital artist Beeple's work "Everydays: The First 5000 Days" sold for a staggering $69.3 million at Christie's auction house. This was followed by CryptoPunks fetching tens of millions and countless digital collectibles backed by mainstream institutions—it was the golden age of NFTs.
From a record-breaking auction sale to a forced industry conference cancellation, NFTs have completed a full cycle from frenzy to reckoning in just five years.
Image – Everydays: The First 5000 Days NFT
Imbalance in NFT Market Supply and Demand
Supply Explosion. According to CryptoSlam data, the supply in 2025 increased by 35% compared to 1 billion in 2024. Over the past four years, the total number of NFTs has skyrocketed from 38 million to 1.34 billion, a growth of approximately 3,400%.
Sales Shrinkage. According to CryptoSlam data, the total NFT sales in 2025 were approximately $5.63 billion, a 37% decrease from $8.9 billion in 2024. According to CoinGecko data, the total NFT market capitalization fell from a peak of about $17 billion in April 2022 to about $2.4 billion by the end of 2025, a drop of about 86%. In 2025 alone, the total NFT market capitalization shrank from about $9.2 billion in January to its year-end size, a staggering 68% drop for the year.
Liquidity Dilution. As the barrier to minting lowered, the market entered a "high-frequency, low-price" mode. According to CryptoSlam data, the average transaction price has fallen from $124 in 2024 to $96 by the end of 2025. Compared to the average transaction price of over $400 during the peak of the 2021-2022 bubble, it has lost three-quarters of its value.
Image Source: CryptoSlam
Even former top-tier NFT projects and blue-chip NFTs couldn't escape the downturn. Taking CryptoPunks as an example, the floor price has fallen to about 30 ETH, down 78% from its peak of 125 ETH in 2021; Bored Ape Yacht Club (BAYC) fell 83% from about 30 ETH to about 5 ETH; Azuki dropped 93% from about 12 ETH to 0.8 ETH.
Collective "Flight" and Evolution of Platforms
The moves of industry leaders signal the end of this cycle.
OpenSea, once the undisputed leader in the NFT marketplace, saw its platform revenue drop from $50-120 million per month during the NFT golden age to less than one million.
Consequently, OpenSea announced a pivot, transforming from a pure "NFT marketplace" to a universal on-chain trading center for "Trade Everything," encompassing physical collectibles and digital assets like tokens, and confirmed it will issue a token.
Blur, which debuted at its peak, has seen its TVL continuously hit new lows, and its token price is down 99% from its high.
Then there's Magic Eden, which rose to prominence on the Solana chain. After a year of operation, it issued a token. Affected by the NFT market sentiment and the realization of airdrop expectations, platform trading volume began to shrink, and its token price also fell over 98% from its high.
Even projects that couldn't keep up with the changing times, like the older NFT marketplace X2Y2, have been eliminated, ceasing operations entirely, with the team shifting to the AI field.
From "Token" to "Brand"
Amid the widespread gloom, Pudgy Penguins has successfully bucked the trend, becoming an outlier in the industry. Its success does not rely on complex innovations in token technology or short-term speculative hype, but rather on transforming digital IP into physical consumer goods, gradually building a sustainable brand ecosystem that bridges Web3 and traditional retail.
Through the dual revenue model implemented by CEO Luca Netz, Pudgy Penguins deeply integrates IP licensing with physical goods. Its physical toys are now available in over 10,000 retail channels globally, including Walmart, Target, and Walgreens. According to an AInvest report, this transformation has brought the project approximately $50 million in annual revenue, effectively offsetting the impact of the overall crypto market contraction.
Image – Pudgy Penguins toy shelf in a US Walmart
During the 2025 Christmas season, Pudgy Penguins spent approximately $500,000 to project a giant animation on the Las Vegas landmark Sphere.
Image – Pudgy Penguins形象 on the Sphere
This advertisement, seen by millions of tourists, avoided crypto jargon and the term NFT, presenting only a family-friendly IP image. This brand exposure, in turn, stimulated liquidity in the secondary market. Over the past 14 days, the floor price of this NFT has risen 25%, and trading volume has increased by about 33%.
This shift from speculation to cultural operation seems to be becoming a consensus among industry survivors. Last May, Yuga Labs, the publisher of Bored Ape Yacht Club (BAYC), transferred the IP rights of the top NFT project CryptoPunks to the non-profit Infinite Node Foundation, aiming to strip it of its speculative, price-volatile nature and seek longer-term artistic preservation and cultural operation.
Physical Backing and Functional Return
Beyond IP branding, NFTs are becoming the underlying tool for connecting real-world assets (RWA).
Physical Card Trading. The platform Courtyard.io is changing the game. They deposit real Pokémon cards into certified vaults and tokenize them as NFTs. In the 30 days leading up to the end of 2025, the platform processed over 230,000 transactions, generating approximately $12.7 million in sales, demonstrating strong market appetite for this type of highly liquid, physically-backed asset.
Functional Tickets. FIFA (Fédération Internationale de Football Association) has also joined this trend, introducing "Priority Purchase Right" NFTs for ticket sales for the 2026 World Cup. These NFTs are not for speculation but serve as a verification tool to prevent scalper premiums and price gouging in the secondary market.
What Died in NFTs, and What Remains
NFTs are not "completely dead," but they have indeed died once.
What died is the fantasy of viewing NFTs as a financial asset that could be endlessly minted and traded based solely on narrative, detached from real-world value. In the face of infinite supply and limited demand, this path was destined to be unsustainable.
What remains is NFT's role as a "credential layer." It is no longer expected to create value alone but is embedded within IP brands, physical assets, and functional scenarios,承担ing the basic functions of rights confirmation, transfer, participation, and verification.
From Pudgy Penguins' toy shelves, to the on-chain flow of physical cards, to the anti-scalping mechanisms for World Cup tickets, NFTs are stepping down from the speculative stage and returning to the toolbox.
For the NFT speculative market, this is undoubtedly a winter. But for NFTs themselves, this is more like a rebirth after disenchantment.
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