NFT tokens are a bet on the recovery of a category that overshot badly in 2021-2022. APE, BLUR and the rest of the sector trade well below their all-time highs, and the honest question is whether NFTs ever return as a mass-market consumer product or remain a niche within crypto-native culture.
For context see the NFT glossary entry and the broader Ethereum ecosystem sector — most NFT activity still lives on Ethereum.
The fungible-token layer beneath NFTs
The distinction the top of this page flags matters: individual NFTs (a Bored Ape, a CryptoPunk, a specific art piece) are one-of-a-kind assets that trade on marketplaces. The fungible tokens tracked in this sector are ordinary ERC-20 tokens issued by the projects, companies, or marketplaces that operate in the NFT space.
Marketplace tokens are the core of the sector. BLUR launched with a governance and incentive token that rewarded trading volume — the resulting flywheel made Blur the largest NFT marketplace by volume within months of launch. OpenSea has tokenized as SEA. LooksRare (LOOKS), X2Y2, and Magic Eden each issue tokens tied to marketplace fees, rewards, or governance.
Project/community tokens come from NFT collections that expanded into full ecosystems. ApeCoin (APE) is the most famous — originally created by Yuga Labs (of BAYC/MAYC) as a governance token for the Ape ecosystem, later used for Otherside land sales and various community initiatives. PUDGY (Pudgy Penguins) launched in 2024 with similar ambitions.
Infrastructure tokens sit behind the scenes. Immutable (IMX) provides L2 scaling specifically for NFT-heavy workloads (notably games). Superverse, Mocaverse, and various gaming tokens all count here.
What broke in 2022 and what’s different now
Aggregate NFT trading volume peaked at roughly $17B/month in January 2022. By late 2023 it had fallen 95%+. Blue-chip collection floor prices collapsed 70-90%. The category’s failure had multiple causes: wash-trading inflation of the peak volumes, insufficient real utility beyond profile-picture signaling, Ethereum gas costs making mint events prohibitively expensive, and the broader 2022 crypto drawdown dragging speculative assets down with it.
What’s different in 2026: the trading infrastructure is genuinely better (L2 gas costs near-zero, aggregators like Blur/Tensor consolidating liquidity). The surviving collections have smaller but stickier communities. Gaming NFTs on chains like Ronin and Immutable have found product-market fit in specific titles. And the “every project needs a PFP collection” era is thankfully over.
Risks and realistic expectations
The category is fundamentally speculative and sentiment-driven. NFT tokens have historically had even higher beta than their underlying collections — a 20% drop in BAYC floor typically produces a 30-40% drop in APE. Liquidity is thin outside the top 5-10 tokens. And the narrative cycle is short: sectors can run hard for months then go dormant for years. Size positions as speculative, not core. For broader crypto exposure frameworks, see best crypto to buy.
Data below is live from CoinGecko.