This thread explores the current state of decentralization, emphasizing the contrast between permissionless blockchains like Ethereum and websites like OpenSea. Any website can choose whether or not to display an NFT, but they cannot modify the NFT itself. Most Layer 2s are still fairly centralized and controlled by a few parties. Decentralization will likely improve in the coming years.

Electric Capital's Annual Developer Report reveals trends around the increase in multichain development, the U.S. losing developer share, and the growth of new chains like Base and Bitcoin L2s. Infrastructure improvement has enabled the rise of social applications, which are in an experimental stage reminiscent of social media in 2003. NFTs are becoming multichain and are expected to serve as the foundation for various digital assets in the future.

In September 2024, NFT sales experienced a significant decline, reaching their lowest monthly volume since 2021. According to data from CryptoSlam, the total sales volume for NFTs fell to $296 million, marking a 20% decrease from August's $373 million. This drop is even more pronounced when compared to March 2024, which was the strongest month for digital collectibles, where sales peaked at $1.6 billion. The number of NFT transactions also saw a sharp decline, dropping 32% from 7.3 million in August to 4.9 million in September. Despite the overall downturn in sales and transactions, there was a notable increase in the average value of NFT transactions, which rose by 18% from $50.71 in August to $60 in September. This suggests that while fewer NFTs were being sold, those that were sold tended to have a higher value. The decline in the NFT market coincides with increased scrutiny from the United States Securities and Exchange Commission (SEC). In late August, Devin Finzer, the CEO of OpenSea, reported that the platform received a Wells notice from the SEC, indicating that some NFTs on the marketplace might be classified as unregistered securities. This regulatory pressure was further highlighted when the SEC fined the NFT-themed restaurant Flyfish Club $750,000 for selling NFTs, a move that drew criticism from some SEC commissioners who argued that these NFTs should not fall under securities laws. In response to the SEC's actions, Luca Schnetzler, CEO of the popular NFT collection Pudgy Penguins, dismissed the regulatory concerns as unfounded, suggesting that the SEC's focus on OpenSea should extend to larger entities involved in NFTs, such as Sotheby’s, Nike, and Pokémon. This ongoing tension between NFT creators and regulators reflects the broader challenges facing the NFT market as it navigates legal and market dynamics.