Market Recovery and Pivot: NFT trading volume doubled quarter-over-quarter in Q3 2025 to $1.58 billion, with sales volume hitting a record high. However, growth drivers have shifted from speculative collectibles to utility-based scenarios like sports, ticketing, gaming, and intellectual property.

Lower Infrastructure Costs: Ethereum's Dencun upgrade pushed Layer 2 fees down over 90%, Solana's compression tech enables low-cost mass issuance, and Bitcoin inscriptions have formed an independent collectibles track, collectively supporting practical applications.

Key Role of Distribution Channels: Base has become a core channel thanks to social distribution and low-cost minting. Built-in passkeys and gas sponsorship in wallets lower user barriers; growth of wallets like Phantom aids mobile penetration.

Evolution of Royalty Models: Royalties became optional in open marketplaces, shifting creator revenue to primary sales, IP partnerships, and retail tie-ins. Closed platforms enforce royalties for premium brands, creating a dual-track system.

Application Scenarios Scale Up: Sports NFT trading volume surged 337%, gaming assets saw steady growth, IP licensing (e.g., Pudgy Penguins in Walmart) bridges physical consumption, and loyalty programs leverage on-chain integration for recurring value.

Future Scenarios & Risks: The baseline annualized trading volume forecast is $5-6.5 billion. Growth depends on wallet UX, royalty policies, project expansion, and distribution breakthroughs. Risks include wash trading distorting data and incentive cycles.

---

NFT trading activity showed signs of recovery in the third quarter of 2025, breaking the prolonged downward trend of the post-hype era.

After two years of market contraction and narrative shifts, the on-chain market has found a new footing. Its growth momentum no longer stems from blue-chip collections or speculative art, but from lower-cost infrastructure, loyalty programs, and sports-related assets. The core value of these assets lies in their utility, not status symbolism.

NFT Trading Volume Rebounds, Sales Hit Record Highs

As Ethereum's scaling upgrades push activity to L2s, Solana holds its ground with high throughput and compression, and Bitcoin inscriptions develop a collectibles culture tied to fee market cycles, the NFT market's focus has shifted to low-cost infrastructure and practical applications.

Today, the keys to market growth are fee levels and distribution channels, not profile picture NFTs (PFPs).

The Dencun upgrade reshaped the economic landscape. Ethereum's EIP-4844 proposal reduced data costs for rollups, driving L2 transaction fees down to cents and enabling gasless or sponsored minting processes for mainstream users. Post-upgrade, L2 fees fell over 90%, a change reflected in minting behavior and propelling Base as a core distribution channel.

In the Solana ecosystem, compression technology allows for the mass issuance of NFTs for loyalty programs and access-gated applications. Deploying 10 million compressed NFTs costs approximately 7.7 SOL, with median transaction fees remaining near $0.003 even under high load.

Bitcoin inscriptions have carved out an independent niche, their development closely linked to mempool cycles and miner income. By February 2025, over 80 million inscriptions had been created, ranking Bitcoin among the top three chains by historical NFT sales volume.

Demand-Side Rebound with Underlying Concerns

Data from DappRadar shows NFT trading volume nearly doubled QoQ in Q3 2025 to $1.58 billion, with sales volume reaching 18.1 million, a record high for quarterly transaction count.

Sports NFTs performed particularly well, with trading volume surging 337% QoQ to $71.1 million. The periodic utility value, access rights, and loyalty benefits of these assets decouple consumption behavior from floor price.

The summer market saw a rapid rebound followed by cooling off. According to CryptoSlam, sales reached $574 million in July 2025 (the second-highest monthly total for the year), but fell about 25% MoM in September as overall crypto market risk appetite declined.

This trend confirms the market has entered a new phase of lower "average selling prices" and shows that even if unique active wallets and utility-based categories remain stable, total NFT trading volume still fluctuates with the broader crypto market.

The Key Role of Distribution Channels Becomes Prominent

Wallets with built-in passkeys and gas sponsorship mechanisms eliminate the friction costs that hindered user onboarding in previous cycles.

Coinbase Smart Wallet offers passkey login and gas sponsorship in supported apps. Phantom reported 15 million monthly active users in January 2025, a user base providing traffic support for mobile and social minting channels.

This distribution reach is crucial in blockchain networks where culture and social traffic reinforce each other, with Base being a prime example.

This year, leveraging low-cost minting, Zora's batch minting rhythm, and distribution channels linked to Farcaster, Base has surpassed Solana in some NFT trading volume metrics.

This trend means creators, when choosing a launch platform, are beginning to model distribution data first before matching it with a fee solution.

Royalties Are No Longer the Core of Revenue Structure

After the 2022 market peak, creator royalty income plummeted as competition among marketplaces made royalties optional on most platforms. Nansen data shows royalty revenue hit a two-year low in 2023 and failed to recover to previous levels.

Conversely, marketplaces enforcing royalties have gradually emerged. In late 2023, Magic Eden partnered with Yuga Labs to launch an Ethereum marketplace enforcing creator royalties, creating a protected distribution channel for influential brands.

The current market has formed a dual-track pattern: in open marketplaces, low fees, primary sales, IP collaborations, and retail integrations constitute the main profit sources for creators. Closed ecosystems enforce royalties via contractual agreements, catering to high-end NFT issuances.

In areas where incentive mechanisms dominate capital flow, marketplace market share remains dynamic. In the Solana ecosystem, Magic Eden and Tensor form a duopoly, with their market shares fluctuating based on reward programs and design adjustments, typically ranging between 40% and 60% during different periods.

This isn't a structural change but the result of incentive cycles; market share charts might appear to show a shift, but they ultimately revert to the mean. For creators, the key takeaway is to negotiate distribution plans during the launch planning stage, rather than defaulting to a single platform.

User Flow Reveals Short-Term Development Path

Sports, ticketing, and loyalty programs can achieve scale because their benefits are periodic and repeatable, and core on-chain functions are embedded into existing ticketing and e-commerce workflows.

DappRadar's Q3 2025 data shows sports NFT trading volume growth has outpaced the overall market, and this is without factoring in full-season or league-wide partnerships.

Growth in the gaming sector is more稳健. According to Messari, Immutable's zkEVM architecture and real-time data show sustained transaction growth. Its design of "Ethereum-level security with L2-optimized user experience" highly aligns with the needs of asset custody and persistent secondary trading fees.

Intellectual property and licensing partnerships are another crucial bridge for NFTs transitioning from digital collectibles (JPEGs) to consumer channels. Pudgy Penguins has entered over 3,000 Walmart stores, building a tangible channel from NFTs to physical retail and licensing revenue.

For creators, the costs and user experience across different blockchains are now clearly distinguishable:

* Ethereum L1 still dominates provenance and high-value art; most platforms have volatile Gas fees, and royalty collection is optional.

Post-Dencun, *Ethereum L2s (like Base)** have transaction fees of a few cents, support sponsored or gasless transactions, and Base offers social distribution channels via the Farcaster ecosystem.

* Solana's compression technology allows the issuance of millions of NFTs for dollar-level costs, leveraging its mobile-first wallet ecosystem for broad reach.

* Bitcoin inscriptions focus on the scarce collectibles niche, where rising fees are a market feature, not a bug.

Macro-Environmental Landscape Evolution

The annualized NFT market trading volume for 2025 is projected to be in the $5-6.5 billion range, with the average sale price in the first half of the year stabilizing between $80-$100, forming the baseline for next year's market scenarios.

Using CryptoSlam's monthly sales data as core data, combined with DappRadar's category breakdown analysis:

* Bear Case: If the overall crypto market stagnates and the average sale price drops, total NFT trading volume could fall to $4-5 billion. Fee-sensitive applications would concentrate on Solana and Ethereum L2s, the Ethereum L1 art market would remain stable, and the inscriptions market would fluctuate with Bitcoin fee cycles.

* Base Case: If embedded wallets and social minting channels continue to expand, sports and live event projects scale across seasons, and brands experiment with launches on royalty-enforcing platforms, total NFT trading volume could reach $6-9 billion.

* Bull Case: If mobile distribution achieves breakthrough growth (Base and passkey logins普及 minting, Phantom MAU surpasses 20 million, ticketing pilots become mainstream, gaming assets form sustainable markets), total NFT trading volume could hit $10-14 billion.

In all three scenarios, Ethereum L2s and Solana are expected to dominate market share, Ethereum L1 will focus on niche areas, and Bitcoin inscriptions will remain stable as a scarce collectibles track.

Six Key Variables Determine Growth Pace

1. Wallet User Experience & Distribution Capability: Key metrics include passkey adoption rates, usage of gas sponsorship, and MAU for Phantom and Coinbase Smart Wallet.

2. Reach of Royalty Enforcement: Impacts high-end NFT issuance, including OpenSea's potential policy shift and the health of creator-friendly marketplaces on Ethereum.

3. Scalability of Sports & Ticketing Partnerships: Expansion from pilot projects to full-season partnerships turns one-off volume into recurring revenue.

4. Base & Zora's Launch Cadence: Judging the sustainability of social distribution channels via monthly mint volume, Base's share of total NFT volume, and the synergy with Farcaster Frames.

5. Adoption Rate of Solana Compression: Gauging whether loyalty programs and media applications are moving from pilots to normalization via compressed NFT mint counts and deployment cost per million assets.

6. Bitcoin Fee Cycle: Its connection to inscriptions and Runes, fluctuating with mempool congestion, continuously affects collectibles pricing.

However, two risks persist. Wash trading and spam still distort GMV and sales figures; therefore, consulting dashboards that filter for average sales and organic search is safer.

Marketplace incentive mechanisms can create the illusion of a "paradigm shift" in market share charts (driven by airdrop cycles), especially within Solana's duopoly. Thus, creators' launch plans should account for this volatility from the start.

Another operational constraint is revenue design: with royalties mostly optional in open marketplaces, primary sales, IP licensing, and retail partnerships bear more responsibility for income. Royalty-enforcing closed platforms only provide a high-end launch channel for a minority of brands, which most creators cannot leverage.

Industry Transition from 'Endgame' to 'Migration'

The JPEG hype frenzy is over. NFT infrastructure costs have dropped significantly, application scenarios have pivoted to ticketing, sports, gaming, and IP, and the wallet and distribution systems are beginning to integrate into users' existing environments.

For investors who once spent six figures on AWS-hosted JPEGs from flagship blue-chip projects like Bored Ape Yacht Club, the situation remains precarious. One such NFT, purchased for over 74 ETH in 2021, is now worth just 9 ETH, an 87% drop in three years.

The speculative mania in non-fungible tokens may have ended, but can the underlying technology gain recognition through practical use cases in the real world?

The answer remains to be seen, but current signs are promising—though this hope offers little solace to those who bought at the peak. The Q3 2025 NFT market closed with $1.58 billion in volume and 18.1 million sales, while its structure continues evolving steadfastly towards utility.