Lido NFTs Axed from Nansen’s Service After Mint Volume Mishap

Blockchain analytics platform Nansen has announced the removal of Lido NFTs from its $NFT Paradise service. Nansen’s $NFT Paradise is a platform offering detailed analytics on the $NFT market, helping users understand transactions, trends, and dynamics. Nansen’s decision was influenced by user votes following a recent mishap involving Lido, a decentralized finance (DeFi) platform. Lido’s staked withdrawal requests were mistakenly represented as NFTs, leading to an unexpected increase in $NFT mint volume.

Lido stated last month that users would receive NFTs as part of the deposit withdrawal procedure. Any time a user unstakes Ether, the decentralized finance protocol issues $NFT certificates, which are used to claim their $ETH tokens.

The massive spike, which involved a whopping 430k $ETH (approximately $780 million), was initially interpreted as a surge in the $NFT market. However, closer investigation revealed that this was due to a technical issue rather than genuine market activity​​. Nansen went on to clarify that the $NFT market is not yet back to robust health, tempering expectations for a swift recovery in the near future.

Nansen has previously stated that throughout Q1 2023, $NFT trading volumes in Ethereum ($ETH) and USD were on the rise. Specifically, a total of 2,839,354 $ETH were transacted in Q1, compared to 1,525,471 $ETH in Q4 of the previous year. March 2023 marked a yearly high in $NFT sales. This surge was largely driven by Blur, an emerging $NFT marketplace that quickly overtook established marketplaces to lead the industry in sales​​.

Despite the uptick in sales and users during Q1, a slowdown in the $NFT market was observed in April. Volumes transacted in April saw a drop compared to March, and this trend appears to have continued into May. The total number of $NFT holders also increased modestly in Q1, 2023, reaching 13,999,528 compared to 11,233,872 $NFT holders in Q4, 2022.