X2Y2 NFT Marketplace Shuts Down After 90% Drop in Trading Volume

The non-fungible token market is gradually maturing and turning competitive, with only a small, consistent community of dedicated NFT collectors and projects remaining active.

Non-fungible token startup X2Y2 is shutting down its NFT market platform on April 30, its blockchain startup announced on March 31. The startup, which began as a fork of the LooksRare NFT platform, is shutting down its NFT exchange to pursue an artificial intelligence project.

The startup's closure comes after a 90% drop in trading volume. Over three years, X2Y2 processed $5.6B in transactions. The startup's team has now shifted its focus to AI, combining NFTs and innovation.

“After 3 incredible years and $5.6B in trading volume, X2Y2 will be sunsetting as an NFT marketplace on April 30, 2025,” the startup announced.

“We’re shutting down the market, but not the smart contracts—those will continue to be maintained. We’ll also be sticking around in the crypto space, pivoting to a new project focused on blending AI and NFTs.”

The startup's closure follows early February reports that tokens linked to artificial intelligence agents had dropped by as much as 90% from 2024 highs. However, recent reports suggest that the rise of AI-driven crypto agents may be following a familiar trajectory.

Earlier this year, Animoca Brands' NFT startup Quidd announced the closure of its platform. The startup, which focused on 3D collectibles, ceased operations on January 3.

The startup confirmed its closure in a statement to BlockVisio. A spokesperson for Animoca Brands confirmed that the startup would be shutting down its platform.

“After a great run, Quidd is shutting down on January 3, 2025,” the spokesperson said. “We’re grateful for the incredible community we’ve built over the years and the opportunity to work with some of the most talented creators in the world.”

Quidd was an NFT startup that sold licenses for non-fungible tokens. It was best known for its partnership with Warner Bros. to sell Batman-themed NFTs.

The startup's closure comes amid a broader slowdown in the NFT market. After a boom in 2022, NFT trading volume has fallen sharply this year.

The startup's closure is also a setback for Animoca Brands, which has been a major investor in blockchain startups. The startup, which is planning an initial public offering, has invested in more than 300 startups.

Another digital art market startup, The MakersPlace, also shut down its operations early this year due to “ongoing market challenges” after six years.

Announcing its closure, the startup said it had no plans for a new product launch. The startup’s CEO, Slava Pastukh, said in a statement that the startup had made the “difficult decision” to wind down operations.

“Despite our best efforts, we were unable to overcome the challenges of the current market conditions,” Pastukh said. “We are grateful to the artists, collectors, and partners who supported us on this journey.”

The startup, which launched in 2017, brought together renowned artists and photographers to create a marketplace for their work. The startup also supported emerging artists via its own grants.

Earlier this year, one of the leading crypto exchanges, Kraken, closed its NFT marketplace due to poor market conditions.

Announcing the closure of its NFT venture, Kraken said it had seen a "significant decline" in interest from new users toward NFTs this year.

"We've reached a point where we no longer have the capacity to continue investing in our NFT efforts to the degree that would be required to maintain a competitive marketplace," the exchange said in a statement.

The exchange, which began offering NFT services in August 2023, said it would be shutting down the marketplace in April 2024. It added that it had seen a "natural evolution" in user behavior.

"We've seen a shift in user preference toward other products and services, such as spot trading and futures," the exchange said.

The startup's closure follows reports that a time-tested investing strategy, known as the "box-bottom triple-top," may be indicating that the rally in artificial intelligence (AI) tokens is nearing its peak.

The startup's closure also comes after reports that the price of tokens linked to AI agents had dropped by as much as 90% from 2024 highs. However, recent reports suggest that the rise of AI-driven crypto agents may be following a familiar trajectory. Despite the setbacks, one venture capitalist firm is still optimistic about the future of AI startups.