Non-fungible tokens (NFTs) have skyrocketed in popularity over the last year. NFTs are blockchain-based digital items whose units are designed to be unique, unlike traditional cryptocurrencies whose units are meant to be interchangeable. NFTs can store data on blockchains — with most NFT projects built on the Ethereum blockchain — and that data can be associated with files containing media such as images, videos, and audio, or even in some cases physical objects. NFTs typically give the holder ownership over the data, media, or object the token is associated with, and are commonly bought and sold on specialized marketplaces, which we’ll explore in more detail later on in the report.
So far in 2021, users have sent at least $26.9 billion worth of cryptocurrency to ERC-721 and ERC-1155 contracts, the two types of Ethereum smart contracts associated with NFT marketplaces and collections.
Chainalysis Blog | [Report Preview] The 2021 NFT Market Explained
