Bubble or Not: An Analysis of Ethereum ERC721 and ERC1155 Non-fungible Token Ecosystem

The non-fungible token (NFT) is an emergent type of cryptocurrency that has garnered extensive attention since its inception. The uniqueness, indivisibility, and humanistic value of NFTs are the key characteristics that distinguish them from traditional tokens. The market capitalization of NFT reached 21.5 billion USD in 2021, almost 200 times that of all previous transactions. However, the subsequent rapid decline in NFT market fever in the second quarter of 2022 casts doubt on the ostensible boom in the NFT market. To date, there has been no comprehensive and systematic study of the NFT trade market or of the NFT bubble and hype phenomenon. To address this gap, we conduct an in-depth investigation of the entire Ethereum ERC721 and ERC1155 NFT ecosystems by dividing the NFT ecosystem participants into three categories: creators, transferors, and holders, to understand their manipulations of NFTs and infer their intentions. We examine the differences between NFT and ERC20 traders and then analyze the possible reasons behind these differences, leading us to gain insights into the varying degrees of market bubble associated with the two kinds of tokens. Through the construction and analysis of the NFT transfer graph (NTG), we uncover certain anomalous behaviors related to bubbles, along with quantifying the proportion of these anomalous behaviors, to reveal the degree of bubbles within the entire ecosystem.