NFTs are unquestionably the most-hyped crypto subsector of 2021. 

But the rapid hype-boom-bubble-bust that tends to characterise new markets using blockchain doesn’t seem to have hit NFTs. 

We’re seeing ever more adoption from mainstream players, with Marvel now joining the likes of NBA and Formula One in selling one-of-a-kind figures, tokens, comics and video game items.

The price tags for individual NFTs are becoming ever more eye-catching; from Tim Berners- Lee’s $5.43m world wide web source code, to CryptoPunks #7252, sold on OpenSea for 1000ETH ($2.9m) two months ago, then relisted and sold for 1,600ETH ($4.6m) less than 30 days later.

The question cropping up now is: could NFT markets become more valuable than DeFi?

Numbers up

One of the difficulties of comparing the two markets is that the standard metrics they use count totally different things. 

To accurately measure usage, we normally like to know how many people (that is, your average man or woman on the street) are using a product on a daily basis. 

Tech and mobile apps tend to turn to Monthly Active Users (MAUs) to count this. 

For example, video sharing app TikTok crossed 1 billion MAUs in September 2021. Crypto wallet MetaMask, one of the key ways that people interact with DeFi apps and NFT markets, announced it had grown from 545,000 to 10 million MAUs by August this year. 

But it’s hard to separate out how many people are using DeFi apps at any one time. And it’s something of an open secret in DeFi that a small number of high net-worth whales exaggerate the user numbers. 

In DeFi, you’ll likely have come across the ‘TVL’ metric, or Total Value Locked in smart contracts. TVL represents the daily value of all the assets staked in DeFi protocols. 

DeFiPulse, the industry standard data aggregator, shows that TVL jumped to a fresh all time high of $98bn by 7 September 2021.That’s beyond the May 2021 peak of $85bn, when the price of Bitcoin was some $17,000 higher than it is now.


“TVL is artificially inflated by a small number of power users,” writes Richard Chen, a partner at crypto venture firm 1confirmation. 

“A handful of users are responsible for the vast majority of usage...A single MakerDAO CDP holder #3088 has 127,274ETH as collateral, 17x the amount of collateral as the next largest CDP holder. Three users are responsible for 80% of all user deposits on InstaDApp.”

And while Dune Analytics suggests that there are 3 million DeFi users, it couches this fact in the knowledge that “since a user can have multiple addresses, this is an overestimation”.

By contrast, stats from the most recent Coinmetrics State of the Network suggest that NFT usage is growing faster than DeFi. 

“With thousands of different NFT projects launching every day, NFTs now represent a material percentage of all activity on Ethereum. The daily number of ERC-721 transfers has increased by more than 10x from the beginning of 2021 to today, despite a recent pullback in activity.”

In a 27 April blog post, Metamask owner Consenys said: “The recent mainstream craze over NFTs has attracted a much larger audience to the Ethereum ecosystem. Furthermore, on-chain data clearly indicates that NFTs are being widely embraced by users across the Ethereum ecosystem. In fact, accessing NFTs is now the second most popular use case for MetaMask, only behind swaps.”

Further evidence comes from Google Trends worldwide data, showing that ‘NFT’ has produced on average 4x more search volume than ‘DeFi’ over the last 12 months. 

The success of NFTs has become so overwhelming that even blockchains like Bitcoin Cash have instituted upgrades to allow them. Since a May 2021 hard fork, every BCH transaction now contains an output called OP_RETURN. Simple Ledger transactions reside here, and can be used to mint NFTs

Sizing the market

If we stick with TVL, the market size for DeFi — around $100bn or so — would appear to be around 20x larger than the NFT market. 

But we are being forced to compare apples with oranges. NFT metrics tend to rely on the total amount of product sold, rather than the number of users. 

Even so, in 2020, the NFT market produced sales of around $338m, according to Nasdaq. 

Sales volume soared to $2.5bn across the first half of 2021, but that figure is being surpassed on a monthly basis now. According to data from, 30-day sales regularly exceed $2bn. 

The total addressable market for collectibles — from Magic, The Gathering trading cards, to Warhammer 40k figurines, to baseball cards, to NBA videos, is around $370 billion.

While DeFi use appears to be restricted to tens of thousands of sophisticated traders — those who can afford the network fees that Ethereum still charges, despite the promises of EIP 1559 —  NFTs and digital collectibles in general are much more universal. 

Keep it simple

We know that DeFi is dominated by whales and they skew the market size. It’s also hard to get people super pumped about financial yield farming or lending, no matter how much crypto we could stack from doing so. Andreas Freund wrote about this for Consensys back in 2019: 

“As exciting as DeFi is, the tethering of use cases into regulatory frameworks that are not designed for seamless user experiences does not lend itself to rapid blockchain mass adoption.”

So to answer the question: could NFTs overtake DeFi? Our assertion is that they already have. If not in raw numbers, then certainly in terms of cultural impact. Once the crypto world figures out how to compare them side by side, we’ll be able to offer a more definitive statement.

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