Unveiling Digital Asset Movement and Market Characteristics: A Study of Non-Fungible Token Dynamics Ownerships

Abstract

This study aims to understand the characteristics of the digital asset market by analyzing the dynamics of Non-Fungible Token (NFT) movements and ownerships that shape market concentration and current market interest. We explored the distribution of NFT across various wallets to determine whether collections form randomly or tend to cluster. We examined how NFT interacts within wallets by utilizing network analysis of 2.8 million transactions from the top five NFT marketplaces between November 2017 and April 2021. Employing centrality metrics and modularity analysis uncovered the most influential NFT and the community structure, including the five prominent communities within the network. Our findings demonstrate how diversification and ownership patterns in the ‘Games’ and ‘Art’ categories provide fresh insights into preferences and behaviors of market characteristics, highlighting the dynamics of the NFT interconnectedness.