Challenges of data accessibility in the NFT market

Lack of data accessibility is a key challenge for the NFT sector. Here is how a data analysis tool is bringing transparency and liquidity to the market.

Nonfungible tokens (NFTs) have grown into a distinct sector within the blockchain industry, but they still have to address several challenges before aiming for mass adoption. One of the key issues of the space has to do with data accessibility, or mostly, the lack of it. Unlike the broader crypto industry, the NFT market is still in its infancy, and there are relatively few resources available for tracking NFT collections, exploring detailed statistics and analyzing market trends.

To begin with, the NFT market lacks standardized data formats and metadata. This can make it difficult for NFT buyers and sellers to share and analyze data, such as ownership history, provenance and other important details. Without access to meaningful data, it can be challenging for buyers to make informed purchasing decisions and for creators to accurately price their NFTs.

One of the reasons for the current situation is that the NFT market is highly fragmented, with thousands of different collections and individual NFTs available for purchase. This makes it challenging for any single resource to provide a comprehensive view of the market as a whole.

Users can still rely on blockchain analytics resources like Nansen or DappRadar, but they are not NFT-oriented and may not cover the NFT market from all angles.

How data accessibility can improve the NFT market

Boosting data accessibility in the NFT space can contribute to a more mature and efficient market in which buyers and sellers can make informed decisions based on a complete view of the space. This, in turn, can drive growth and innovation in the market, leading to increased adoption and participation over time.

Here are some ways in which dedicated NFT analysis resources could help the market:

• Market analysis — with access to relevant data on NFT collections and market trends, buyers and sellers can better analyze the market and identify emerging trends and opportunities.
• Transparency — easy access to data on NFT ownership history, provenance and other details would bring more transparency. This can help buyers make more informed decisions.
• Liquidity — improved data accessibility can make it easier for buyers and sellers to connect and trade NFTs. This can have an indirect positive impact on market liquidity and create more opportunities for investors and collectors.
• Price discovery — improved liquidity and data accessibility can, in turn, help creators determine a fair price for their NFTs.
• Standardized data formats — standardized data formats and metadata can make it easier to compare and analyze different NFT collections and marketplaces. This can help to create more consistency and predictability in the market, making it easier for participants to navigate.

NFT analytics — Addressing demand in an unexplored market

The huge demand for reliable NFT analytics tools is a good opportunity for developers to come up with solutions. Some companies are already well ahead in this race. One example is bitsCrunch, an NFT-oriented data analytics firm. Its flagship product is Unleash NFTs, a leading AI-powered NFT analytics platform that provides a comprehensive overview of the NFT market, along with rich infographics, in-depth market reports, relevant statistics and insights into wash trading patterns.

Saravanan Jaichandaran, the chief data scientist at bitsCrunch, shared:

“Data accessibility remains a core issue despite the prominence of NFTs in the last few years. Recognizing that, we have built Unleash NFTs to offer reliable insights that let people make more informed decisions on their NFT investments, thus adding more trust and transparency to the ecosystem.”

With Unleash NFTs, bitsCrunch is aiming to make NFT analytics more accessible to NFT investors, creators, and enthusiasts. The company relies on three core values:

• Accuracy — the company’s data scientists pursue precision to deliver concrete analytics and data that help its clients make a better judgment on their NFT investments. All critical indicators, such as market capitalization, trading volume and other trading activities are regularly updated.
• Transparency — bitsCrunch provides reliable AI-powered solutions designed to create trust and transparency in the ecosystem.
• Accessibility — the company’s products are accessible to NFT market participants worldwide through clean and easy-to-understand API.

Besides offering in-depth reports and rich infographics, Unleash NFTs has a dedicated tool to identify wash trading, an activity where one or more traders have schemed to create an artificial demand for an NFT by buying and selling it multiple times.

Data accessibility is a critical factor for the growth and maturation of the NFT market. The lack of standardized data formats and metadata, along with the highly fragmented nature of the NFT sector, presents significant challenges for buyers and sellers looking to navigate this emerging space.

Thankfully, there are signs that the situation is improving. New platforms and tools show up, aiming to provide greater transparency and better market analysis while leading to increased liquidity in the NFT market. Additionally, there are efforts underway to develop standardized data formats and metadata that can bring more consistency and predictability to the market.

Source: https://cointelegraph.com/news/challenges-of-data-accessibility-in-the-nft-market