X2Y2 NFT marketplace is shutting down after three years of operation

Token Terminal data shows that X2Y2 saw $53.6 million worth of trading volume over the last 365 days.

Non-fungible token (NFT) marketplace X2Y2 is shutting down after three years of operation, the company announced on Friday.

According to a March 31 announcement, X2Y2 will close down on April 30, with the team switching its focus to an artificial intelligence project. The team shared its enthusiasm for the rapidly growing sector:

We’re shutting down X2Y2 to focus on a new project in the AI space, which we’re even more excited about. Imagine yields, in a permissionless way, powered by AI. Earn insane profits throughout bear and bull markets, and complete market cycles.

— X2Y2 (@X2Y2official) March 31, 2024

Token Terminal data shows that X2Y2 saw $53.6 million worth of trading volume over the last 365 days. While this is a far cry from market leader Blur with its $3 billion worth of trading volume, it still awards the protocol fourth place behind Blur, OpenSea and Immutable.

X2Y2 365-day trading volume chart. Source: Token Terminal

Charu Sethi, president at NFT-focused Polkadot and Kusama chain Unique Network, said that the decision is not a sign of decline in the NFT market. Sethi told Cointelegraph that the platforms need to integrate NFTs into real-world applications.

Real-world implementation is key

Sethi highlighted initiatives such as Mythical Games issuing large numbers of NFTs on Polkadot meant for in-game integration following a $75 million fundraise in 2021. She also pointed out a DappRadar report showing that the blockchain gaming sector reached 7.4 million daily unique active wallets in 2024.

According to Sethi, “X2Y2’s experience highlights that NFT platforms cannot rely solely on marketplace network effects.” Instead, companies should focus on building communities and market resilience by building NFTs into real-world applications. Sethi stated that the key is in valuing utility over speculation.

“Platforms should pivot toward utility-driven models that incentivize consistent user engagement, whether through gaming, sports fandom or AI-backed applications,” Sethi said. “Successful platforms will create ecosystems where NFTs are part of an ongoing value cycle, not just speculative trading assets,” she added.

Alexander Salnikov, co-founder of the Rarible NFT marketplace, told CoA new focus

The announcement was scant on details concerning the project that the X2Y2 team is focusing on. Still, the firm suggested that the readers should imagine “yields, in a permissionless way, powered by AI.”

The new platform will reportedly allow users to earn profits throughout bear and bull markets and entire market cycles, in what is presumably a somewhat decentralized variation on AI-powered trading:

We're shutting down X2Y2 to focus on a new project in the AI space, which we're even more excited about. Imagine yields, in a permissionless way, powered by AI. Earn insane profits throughout bear and bull markets, and complete market cycles.

— X2Y2 (@X2Y2official) March 31, 2024

The announcement follows early February reports that tokens tied to artificial intelligence agents 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 that mirrors the initial boom, bust and resurgence of ICO-era projects.