Ordinals volume down 97%? Talking about the three major mistakes reported by DappRadar

Original author: trevor.btc

Original compilation: Luffy, Foresight News

Recently, the author @the_LeticiaMelo from DappRadar published a popular article about Ordinals, saying that Ordinals transaction volume has dropped by 97% since May, but this data is not accurate.

The article was subsequently reposted by Cointelegraph's Brian Quarmby, further fueling the spread of misinformation.

For the uninitiated, you might think that DappRadar does a deep dive. But this is not the first time DappRadar has made mistakes, I remember DappRadar made a big announcement when it launched Stacks integration in 2022, and all the data was wrong. They launched a dashboard ranking apps by TVL, active users, etc., but none of the numbers were right.

Unfortunately, this article on Ordinals is another example of DappRadar publishing misinformation.

What's wrong with DappRadar?

1. Trading volume data error

DappRadar claims that Ordinals saw $452 million in volume in May and $35 million in July. July was down 92% from May. is it right? No.

Ordinals volume was $195M in May and $65M in July, according to @cryptoslamio.

Still a massive 66% drop, I know, but it tells a very different story than DappRadar.

Let's look at another set of data. @domodata's Ordinals Marketplaces Dune data panel shows Ordinals sales of $155M in May and $50M in July. This is almost the same as the 68% drop shown by CryptoSlam.

There is no doubt that the market is falling after the hype cycle, but as you can see, DappRadar's data on the extent of the decline is not accurate.

As any math geek knows, a 92% drop is worse than a 67% drop and then another 67% drop.

So DappRadar's data is not only inaccurate, but also highly misleading.

2. No mention of BRC-20

The DappRadar article does not mention BRC-20.

According to Dune, 74% of sales in May came from BRC-20, which I think is a major oversight.

Why? This article compares the BRC-20 + Bitcoin NFT volume trend with the Ethereum and Polygon NFT volume trends. When writing about NFTs, you shouldn't mix inappropriate data.

3. Comparing the ATH of the hype cycle to a mature ecosystem that is not in the hype cycle is meaningless

To quote DappRadar author Leticia:

“Bitcoin Ordinals faced a steeper decline, suggesting possible concerns about the utility of its platform or its NFT products.

It’s important to understand that while Bitcoin Ordinals brought innovation, Ethereum and Polygon have a longer-lasting reputation and wider adoption in the NFT space, which makes them less susceptible to drastic changes in the market. "

This then begs the question, has Ethereum NFT volume ever experienced a significant drop in two months?

Yes, they are also doomed to fall.

According to Dune analysis:

• From January to March 2023, the volume of NFT transactions on Ethereum will drop by 49%
• From April to June 2023, the volume of NFT transactions on Ethereum will drop by 77%

The drop in trading volume that happened to Ordinals is not uncommon in the NFT hype cycle. In fact, things are even worse for Ethereum in April 2023.

Keep in mind that even Bitcoin fell 76% from a high of $68,000 to a low of $16,000, although the time frame for Bitcoin's decline was much longer.

Concluding Thoughts

Has Ordinals accelerated the hype cycle? Absolutely.

Has Ordinals volume dropped significantly compared to its peak? Yes.

Can it fall again? certainly.

But so what?

The Ordinals marketplace is no different than any other new asset in the space, or what we've seen in other NFT ecosystems.

History, in a sense, always repeats itself. A lot of people know that a dip will happen sooner or later, but that hasn't changed my belief in technology or the future of the space.