X2Y2 is closing its marketplace after three years, acknowledging the decline of NFT trading and shifting focus to AI.

NFT marketplace X2Y2, which was launched as an alternative to OpenSea and LooksRare, will shut down on April 30, citing a steep decline in trading activity and the challenges of staying competitive.

NFT marketplace X2Y2 will shut down on April 30, after three years in the industry, the project's mysterious TP founder announced on March 31.

Announcing the closure of the platform, which is shutting down as an NFT marketplace but not completely stepping away from crypto, TP said the team is shifting focus to AI, which he describes as "hands down the biggest paradigm shift we'll see in our lifetimes."

"We're sunsetting X2Y2 as an NFT marketplace and closing the market on April 30," he announced."90% shrinkage of NFT trading volume from its peak in 2021 is for sure one of the many reasons."

The NFT chapter taught us a lot — most of all, that lasting value beats chasing trends. That lesson's why we're drawing a line here, not a pause or a maybe, but a full stop on X2Y2 as we knew it.

But it's not the end of the journey. Far from it.

We're closing one loop to open another, pivoting towards a new frontier: AI. It's the biggest paradigm shift we'll see in our lifetimes, and we're going all in.

The move comes as the NFT market continues to struggle, with trading activity dropping sharply from the highs of 2021.

X2Y2, which was once positioned as a key player in the space, reached $5.6 billion in all-time trading volume and peaked as the second-largest NFT marketplace behind OpenSea. However, the platform has since shrunk to $53.6 million, according to data from Token Terminal.

The platform's smart contracts will remain operational, allowing users to interact with them. However, the team warned that the shutdown could impact its token.

"I know this might sting, especially when it comes to token price. X2Y2 tokens were tied to this NFT vision, and as we close this chapter, that's likely to hit hard. I feel that with you, and I'm not here to sugarcoat it," TP said.

Following the news, the X2Y2 token dropped 6.95%, according to data from crypto price aggregators.

While closing the marketplace, X2Y2 is not completely stepping away from crypto. The team hinted at a pivot into AI, calling it "hands down the biggest paradigm shift we'll see in our lifetimes."

"We're closing one loop to open another, pivoting towards a new frontier: AI. It's the biggest paradigm shift we'll see in our lifetimes, and we're going all in," they wrote.

Describing their next project as something that "takes everything we've learned and aims higher," the team said they will be focusing on "yields in a permissionless way, powered by AI."