After the NFT collapse: speculation is dead, should tools be established?

Original author: Sanqing, Foresight News

On January 5th, the NFT Paris Developer Conference scheduled for February was suddenly canceled. Once hosting all-night parties by the Seine River, now only a cold official announcement remains: “The market crash has dealt a huge blow to us. Even with aggressive cost-cutting measures, we still cannot sustain.”

Five years ago, digital artist Beeple’s work “Everydays: The First 5000 Days” sold at Christie’s auction house for a staggering $69.3 million. Subsequently, from CryptoPunks with multi-million dollar sales to countless digital collectibles endorsed by mainstream institutions, that was the golden age of NFTs.

From a record-breaking auction sale to an industry conference forced to cancel, NFTs have completed a full cycle from frenzy to liquidation in five years.

Image - Everydays: The First 5000 Days NFT

NFT Market Supply and Demand Imbalance

Supply explosion. According to CryptoSlam data, the supply in 2025 increased by 35% compared to 2024’s 1 billion units. Over the past four years, the total number of NFTs soared from 38 million to 1.34 billion, a growth of approximately 3,400%.

Sales contraction. CryptoSlam data shows that the total NFT sales in 2025 were about $5.63 billion, down 37% from $8.9 billion in 2024. According to CoinGecko data, the total market cap of NFTs peaked at around $17 billion in April 2022 and fell to approximately $2.4 billion by the end of 2025, a decline of about 86%. In just 2025, the total market cap shrank from about $9.2 billion in January to its end-of-year scale, a 68% decrease within the year.

Liquidity dilution. As minting thresholds lowered, the market shifted into a “high-frequency, low-price” mode. CryptoSlam data shows that the average transaction price dropped from $124 in 2024 to $96 by the end of 2025. Compared to the peak average price of over $400 during the bubble in 2021-2022, it has fallen by three-quarters.

Chart source: CryptoSlam

Even top-tier NFT projects and blue-chip NFTs are not immune. For example, CryptoPunks’ floor price has fallen to about 30 ETH, down 78% from its peak of 125 ETH in 2021; Bored Apes (BAYC) dropped 83% from about 30 ETH to around 5 ETH; Azuki declined 93% from about 12 ETH to 0.8 ETH.

Collective “Escape” and Evolution of Platforms

The moves of industry leaders mark the end of this cycle.

Once dominant in the NFT market, OpenSea’s platform revenue has fallen from the golden era of $50 million to $120 million per month to less than one million dollars.

Therefore, OpenSea announced a transformation, shifting from a simple “NFT marketplace” to a “Trade Everything” universal on-chain trading hub, covering physical collectibles and tokens, and confirming plans to issue tokens.

Blur, which debuted at its peak, continues to see its TVL hit new lows, and its token price has dropped 99% from its high.

Similarly, Magic Eden on Solana, after a year of operation and token issuance, has seen trading volume shrink due to market conditions and bearish expectations, with its token price falling over 98% from its peak.

Even projects that can’t keep up with the times, like the veteran NFT marketplace X2Y2, have been eliminated, completely shut down, with the team shifting focus to AI.

From “Tokens” to “Brands”

Amidst the bleak landscape, Pudgy Penguins has successfully defied the trend and become an industry anomaly. Its success does not rely on complex token innovations or short-term speculation, but on transforming digital IP into physical consumer products, gradually building a sustainable brand ecosystem spanning Web3 and traditional retail.

Through CEO Luca Netz’s dual-income model, Pudgy Penguins has deeply integrated IP licensing with physical merchandise. Its toys are now available in over 10,000 retail outlets worldwide, including Walmart, Target, and Walgreens. According to AInvest, this transformation has generated approximately $50 million annually, effectively offsetting the overall shrinkage of the crypto market.

Chart - Pudgy Penguins toys on Walmart shelves in the US

During Christmas 2025, Pudgy Penguins invested about $500,000 to project a giant animation onto the Sphere (the globe-shaped landmark) in Las Vegas.

Chart - Pudgy Penguins image on the Sphere

This advertising campaign, targeting millions of tourists, avoided crypto jargon and NFT terms, instead presenting family-friendly IP images. Through brand exposure, it indirectly stimulated liquidity in the secondary market. Over the past 14 days, the NFT floor price increased by 25%, and trading volume rose by about 33%.

This shift from speculation to cultural operation seems to be a consensus among industry survivors. Last May, Yuga Labs, the publisher of Bored Apes (BAYC), transferred the IP rights of the top NFT project CryptoPunks to the nonprofit Infinite Node Foundation, aiming to detach it from volatile price speculation and pursue long-term artistic preservation and cultural management.

Physical Endorsements and Functional Return

Beyond IP branding, NFTs are becoming foundational tools connecting physical assets (RWA).

Physical card trading. The platform Courtyard.io is changing the game. They store authentic Pokémon cards in certified insured vaults and tokenize them as NFTs. Within 30 days of 2025, the platform processed over 230,000 transactions, generating about $12.7 million in sales, demonstrating strong market demand for high-liquidity, physically-backed assets.

Functional tickets. FIFA has also joined this camp, introducing “priority purchase” NFTs for the 2026 World Cup ticket sales. These NFTs are not for hype but serve as verification tools to prevent scalping and price fraud in the secondary market.

What Has NFT “Died,” and What Remains?

NFTs haven’t “completely died,” but they have experienced a death once.

What died was the illusion that NFTs could be detached from real value, endlessly minted and traded based solely on narratives. In the face of infinite supply and limited demand, this path was doomed to be unsustainable.

What remains is NFTs’ role as a “proof layer.” They are no longer required to generate value on their own but are embedded within IP brands, physical assets, and functional scenarios, serving as the foundation for rights confirmation, circulation, participation, and verification.

From Pudgy Penguins’ toy shelves, to on-chain circulation of physical cards, to anti-scalping mechanisms for World Cup tickets, NFTs are stepping back from the speculative stage and returning to a toolbox.

For the NFT speculative market, this is undoubtedly a winter. But for NFTs themselves, it is more like a rebirth after disillusionment.