Non-fungible token (NFT) marketplace X2Y2 announced it is shutting down after three years of operation.
According to a March 31 announcement, X2Y2 will shut 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:
“It’s a pivot. Over the last 12 months, we’ve been diving deep into AI—hands down the biggest paradigm shift we’ll see in our lifetimes—and how it can transform crypto. We’re building something new.“
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 the decision is not a sign of decline in the NFT market. She told Cointelegraph:
“The speculative phase focused on collectibles and trading is over, but NFTs are now entering their next growth era as core infrastructure enabling massive opportunities in gaming, AI, fan engagement and content authentication. “
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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. She said 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 Cointelegraph that the apparent slump is just part of a larger NFT market cycle. His comments echoed Sethi’s, who also said that utility is key:
“NFTs remain one of the most powerful primitives in crypto, and the next wave will be led by projects that focus on strong use cases, whether in gaming, digital identity or brand engagement.”
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A 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:
“This isn’t just another project; it’s our shot at creating real, long-term value in crypto for the broader community we’re proud to serve.“
The announcement follows early February reports that tokens tied to artificial intelligence agents were down by as much as 90% from 2024 highs. Still, 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.
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