The declining prices of NFTs have made investors and enthusiasts slow down purchasing these digital assets. The value of an NFT can vary over time, and it is common for the price of an NFT to drop.
Factors contributing to a drop in price include supply and demand, changes in the popularity or desirability of the item represented by the NFT, and issues such as fraud. In addition, some have criticized the high prices and perceived lack of value in certain NFTs, leading to a decrease in demand and a drop in market value.
Additionally, issues such as platform exploits and the sale of inappropriate or fake assets have damaged the reputation of the NFT market and raised concerns about its sustainability. As a result, some investors are divesting from NFTs or rethinking their involvement in the market. With that said, here are some major developments in the NFT industry as of 5 January.
Fanatic Sells 60% Share in Candy Digital
On 4 January, the CEO of Fanatic, Michael Rubin, announced that the company would sell its shares in the sports NFT firm to protect its investors. According to Michael, the company has its investors’ investment at heart, and the dropping value of NFTs will create further losses for investors.
The NFT firm Candy Digital has had a lot of success with NFT since its launch in 2021. The company created NFTs for popular brands such as World Wrestling Entertainment and the popular TV show Stranger Things.
In late 2021, the NFT firm raised over $100 million in the first round at a more than $1.5 billion valuation from investors worldwide, like Insight Partners and Peyton Manning.
The 2022 crypto slump destroyed the stocks of the NFTs, and companies in the NFT world were not immune to layoffs. For example, Drapperlabs, another popular NFT provider, had to axe more than 20% of its workforce.
The crypto winter is finally catching up with Candy Digital, and we may see the same mass layoffs if this trend continues. According to an earlier statement, Fanatic believes that NFTs are not sustainable when not connected to physical products and that the physical products will make them profitable.
Solana’s MagicEden Suffers NFT Exploit
MagicEden, Solana’s largest NFT market, has come under a lot of pressure after an unsolved internal issue led to more than 25 NFTs appearing in other marketplaces. MagicEden says the problem stems from an update to the snappy marketplace and attributes the bug to two major updates.
First, according to the company, ten collections suffered the exploit from the bug that allows people to list NFTs without verification. @HGE.SOL, DeGods (creator of y00ts), and MagicEden sounded the alarm saying that people should not buy any collections on the platform as many fakes are circulating as part of a massive exploit on the platform.
That is the second time in 48 hours that MagicEden has come under scrutiny; in the last two days, users were furiously reporting pornographic assets on the platform. The company has promised to refund their users and ensure that the problem does not repeat itself. According to MagicEden, the platform is back, and users can now safely trade without worrying about any more exploits on the platform.
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