Despite the lack of liquidity and volume in the NFT market, the ERC-721 is overtaking the classic Ethereum token
The number of ERC-721 transfers on the Ethereum network beat the same metric for another standard, ERC-20. While some users may think that ERC-721 is a unique type of token, it is the only NFT token standard used in every collection.
ERC-721 is a standard for non-fungible tokens, which are unique assets with different values than other tokens issued from a smart contract due to their rarity or sequences.
Each token issued with the ERC-721 standard has a unique variable, called tokenId, which will be globally unique. Token ID is used by decentralized apps to output an image of a certain object.
Despite the steep decline in the popularity of NFTs, the ERC-721 standard is currently overtaking ERC-20 in terms of the number of transactions, which can be tied to a number of things, including the number of DeFi apps that use ERC-20. There is also a decline in activity. The popularity of the return of the standard and NFT collections.
As data from CryptoRank shows, NFT transfers hit a massive spike that the market hasn’t seen since 2019 and exceeded transfer volumes of regular ERC-20 tokens.
But while there were no major collection releases nor a significant increase in volume on the digital art marketplace, we can suggest that the volume is tied to projects using NFT technology.
For example, almost every GameFi project in the industry is actively using ERC-721 on their platform for unique game items and characters. Other platforms use NFTs as loan collateral or certificates that confirm the funds being lent.
As of press time, the NFT market cap has grown marginally over the past few days to reach $3.18 billion. The NFT market has lost over 50% of its capitalization since its all-time high.