NFTs in 2023, Review of the Year

TL;DR
2023 started as a tough period for NFTs, but the outlook improved a lot towards the end of the year. There were some big hits and welcome surprises mixed in with some unexpected fumbles, it was a year of non-stop art and creative AI experimentation, and Solana and Bitcoin both flipped Ethereum for NFT sales.

If you’ve been trading NFTs in 2023, then sit back and relax: you’ve made it to the end of an emotional year and sentiment is now cautiously optimistic, so let’s review this year’s big NFT ups and downs.

Key 2023 NFT Events

Considering we started the year in a bear market, there was still a huge amount going on in NFTs if you were paying attention.

The Pudgy Penguins Comeback

At the beginning of the year, a flightless bird JPEG wasn’t top of everyone’s shopping list, but under the stewardship of Luca Netz, who had taken over Pudgy Penguins in 2022, the project pivoted towards physical toys, while emphasizing the centrality of the original PFPs. The plan worked, with Pudgy Toys launching in September, and floor prices on PFPs climbing to currently sit close to 11 ETH.

Nakamigos Take Over

With prices crashing and buyers fleeing, there was no way early 2023 was the right time for yet another pixelated PFP collection. And yet… Nakamigos launched, soared to around 0.9 ETH, and completely took over the timeline, even leading Beeple to include them in his artwork.

Did Nakamigos then need companion collection Cloaks, which dropped later in the year? Arguably not, but Nakamigos’ early performance on center stage was a lot of fun, and they still trade at a little under 0.2 ETH.

DeGods Quits Solana for Ethereum

In 2022, DeGods was a prestigious Solana collection, but after SOL was hit hard by the FTX collapse, DeGods founder Frank DeGods–in April 2023–migrated the project to Ethereum.

It was a big call, but was it the right one? SOL has performed explosively since then, rallying to a $126 high this month from a sub-$10 low at the end of 2022, and what’s more, Solana NFTs flipped Ethereum NFTs in sales volume.

Dookey Dash Golden Key Fetches $1.6 million

Yuga Labs–creator of Bored Ape Yacht Club–dominated the NFT space in 2021/22, and in 2023 worked on various interactive experiences, while Otherside metaverse development continues.

2023’s launches included, at the start of the year, Dookey Dash, a gaming event with a Golden Key NFT for the winner, Twitch streamer Kyle Jackson (AKA Mongraal), who then sold the Golden Key for an impressive 1,000 ETH (or about, at the time, $1.6 million.)

Azuki Drops the Ball

When top-tier project Azuki released companion collection Elementals at the end of June, it came across as a severe fumble. The new PFPs looked almost identical to the originals, and Azuki seemed to have simply diluted supply, with the floor price on original PFPs quickly dropping from around 17 ETH to below 6 ETH, and then further to below 4 ETH, before recovering a little to trade between 5 and 6 ETH.

Jack Butcher Launches Checks and Opepen

One of the breakout NFT names of the year is Jack Butcher, the artist who created both Checks and Opepens. Opaque from the outside, absorbing and entertaining if you buy in, these projects were appealing for anyone into graphic design, blockchain experiments, or who simply wanted to flip digital collectibles during a market lull.

Ordinals on Bitcoin, and Then Everywhere

Ordinal Inscriptions on Bitcoin grabbed a lot of attention at the start of the year, faded into the background for a few months, and then came back strongly in Q4, with collections such as Ordinal Maxi Biz and Bitcoin Frogs becoming highly sought after.

Ordinals have also spread to other chains, including Ethereum, Avalanche and Polygon, but the tech is not universally welcomed, as it’s sometimes been responsible for network congestion and high transaction fees.

Solana Flips Ethereum, Bitcoin Flips Everything

There has been some serious flipping going on when it comes to dominant NFT chains. While previously, Ethereum was the go-to NFT network, by the end of the year, Solana was beating Ethereum for sales, but it was Bitcoin–through its Ordinal Inscriptions–that came out on top.

Mad Lads Ascendant

One standout project of the year is Mad Lads. This PFP collection is part of the Backpack development (which is building a wallet and an exchange), and it has benefited greatly from being on Solana while SOL has been surging.

The upshot is that its floor price rocketed from the 50-60 SOL range, to highs above 200 SOL, while it maintains a vocally enthusiastic community.

A Year of Non-stop Art

Creators continued to drop new collections, regardless of market conditions. Generative art was the dominant style, and artists creating an impact this year have included Vera Molnar, who sadly passed away in December, Richard Nadler, and Refik Anadol.

We’ve also seen alternative art platforms such as Verse and Prohibition become more influential, and Red Bull played an unexpected role, with its Bybit-partnered Velocity Pass project launching new work from artists Snowfro, Jack Butcher, Per Kristian Stoveland and Rik Oostenbroek.

AI Art Takes Off

It’s been a year of AI experimentation, with some of the notable artists dropping NFTs in this field including Claire Silver, Roope Rainisto and Pindar Van Arman.

These creators have all also collaborated with BrainDrops, which grew in 2023 (although it began in 2021) as a key AI/NFT platform, and a useful starting point from which to explore. Accompanying all this, there have been debates and disagreements (mostly friendly, but sometimes heated) about the role AI can play in the artistic process.

Legacy Media Declares NFTs “Totally Worthless”

In September, NFTs got a huge volley of gloating condemnation from traditional media, with Rolling Stone announcing “Your NFTs Are Actually–Finally–Totally Worthless.”

This NFT obituary actually came while Bored Apes, which originally minted at 0.08 ETH, were trading at around 24 ETH, and a headline like that is often a signal that the lows are in. From that point, Bored Apes jumped up to above 30 ETH and then back to around 27 ETH, there’s been a lot of subsequent NFT action on Solana and Bitcoin, and NFT trade volume has increased.

When traditional media declares any aspect of crypto to be dead, it isn’t always a buy signal, but it might be an indicator that recovery is overdue. And so as we head into the new year, JPEG traders are starting to wonder which projects can, potentially, lead NFTs towards previous highs.