The NFT industry will continue to prosper in 2023. Total NFT transactions in Q1 2023 are valued to be $4.7 billion. And, as the saying goes, with great power comes great responsibility.
The NFT market handles the assets of several investors worth billions and trillions of dollars. Accordingly, there is an immense need for NFT creators and wallet providers to provide adequate security for these digital assets. Recently, there have been reports of thefts and scams in the NFT space.
The Trend of NFT Thefts and Scams in Q1 2023
A report by PeckShield indicates that $31.5 million worth of NFTs were stolen within the first three months of 2023.
In January, $4.4 million was stolen while $16.2 million was stolen in the succeeding month. However, a 32.72% reduction in the amount of NFT scams in March showed that the NFT market is bolstering its security; $10.9 million worth of NFTs were stolen in March.
The report shows that 50% of the stolen assets were sold on NFT marketplaces within two hours of the theft. About 74.9% of the stolen NFTs were immediately sold on Blur, while another 19.5% were sold on OpenSea. The remaining stolen assets were sold on LooksRare.
In the past four months, OpenSea has gradually lost its popularity as the first point of contact for sales of stolen NFTs. In March, attackers shifted their focus to Blur.
The increased attention on Blur might result from the recent spike in popularity. Last month, Blur accounted for 69% of Ethereum’s volume while OpenSea managed only 20%. However, CryptoSlam has recently accused Blur of suspicious activities and artificial inflation of trading volumes.
Blur vs. OpenSea
A report by DappRadar compares the relatively new Blur with the leading OpenSea. Blur recorded a sales volume of $2.7 billion, a 783.89% increase from its volume in Q4 2022. The marketplace dominated the NFT market in the first quarter of the year by 57.44%, dominating the market in March by 70.5%.
OpenSea’s reign as the undisputed leader of NFT marketplaces is threatened by Blur’s emergence. OpenSea managed a sales volume of $1.4 billion and dominated the NFT market by 31.1% in Q1 2023. However, the NFT marketplace’s trading volume decreased to $381 million, and its market dominance fell to 22%. OpenSea has not recorded such market share since February 2021.
Hacks and Exploits in the NFT and Crypto Space
The DappRadar report also highlights a massive $373 million funding loss due to “hacks and exploits” in the first quarter of 2023. Although that is a sizeable 92.6% decrease in Q3 2022’s $5 billion, the industry is not entirely void of security concerns.