Another war is around the corner, the latest DappRadar industry report says. It suggests that top marketplaces are vying for a slice of the NFT market pie and changing the balance of power. As per experts, recent big-ticket acquisitions hint the looming platforms battle for influence and market share. OneArt dives deeper to figure out if the war really is on the horizon.
Centralized monopolist takes control
Last year, OpenSea was averaging about 90–95% of the market, Martha Reyes, Head of Research at Bequant, explained to CNBC. In February 2022, experts from Footprint Analytics claimed that OpenSea was to the NFT market what Ethereum was to DeFi. At that time, the platform accounted for over 80% of the market.
OpenSea still tops the chart in terms of trading volume, transactions, and daily active users, Nansen reports.
In this case, decentralization seems not more than a beautiful wrapper for dominance, which aligns with Web2 values but has nothing to do with Web3.
However, OpenSea’s market share for NFT has dropped to 75% amid not only hot rivalry but also security issues, allegations of insider trading, outages, frauds, and user complaints. Some users even refer to it as “Brokensea” pointing to its slow loading and lack of search features.
Now it’s a question of how long OpenSea can stay on top with more and more players tapping into the NFT frenzy.
In war, as in love, all shots are allowed
Vampire attacks
In January, LooksRare celebrated a launch with a “vampire attack” on its rival — OpenSea. It tried to lure the top dog’s users away via LOOK tokens airdrop.
In just one day it managed to generate $235 million. To be true, that wasn’t without wash trading.
Earlier, Infinity also tried to top the market leader with an airdrop for existing OpenSea users. A bit later, Mintable used the “vampire” scheme to try to dethrone the leader by selling collectibles at a loss. X2Y2 also didn’t shy away from attacking its rivals.
Acquisitions
In a highly competitive environment, OpenSea tries to keep the lead and expand its services. And it’s not just about moving to the Seaport protocol. In April, it bought Gem — a marketplace aggregator — to enhance its “pro” community experience. It got a chance to integrate Gem’s popular features, such as collection floor sweeping and rarity-based ranking tools.
UniSwap has also gotten into the game by buying Genie, another NFT aggregator, to bring ERC-20s and NFTs to its users. Additionally, Genie allows users to batch buy non-fungible tokens + save up to 40% on gas.
The throne may stagger under the king
DappRadar says these purchases are likely to make UniSwap and OpenSea direct rivals. Moreover, the number of competitors grows by leaps and bounds. The long also list includes
- $7 billion valued LooksRare with its LOOKS to share revenues with users
- $1.6 billion worth MagicEden that in May managed to outperform OpenSea in terms of number of daily users and transactions
- SuperRare with celebrities’ drops and a focus on exclusive art
- Nifty Gateway with NFTs by Beeple, Pak, and Grimes
- Rarible with more focus on decentralization and royalty fees of up to 50%
- X2Y2 with over 30% of the market as of May 29 (wash trading, most likely)
- Foundation with exclusive art and curated NFTs but higher fees.
Specific collections like BAYC or CryptoKitties have their own marketplaces. Niche platforms, e.g., gaming-focused Fractal, also enter the game, as well as big players, such as Binance and Crypto.com. eBay is gunning for the piece of the action: in June, the company bought KnownOrigin, the Ethereum-based NFT marketplace.
A few days ago, GameStop, a video game retailer, announced its beta NFT marketplace, which managed to outperform the Coinbase NFT marketplace in terms of the trading volume. In two days, it generated at least 3,167 ETH — almost 2x more than Coinbase’s marketplace that went live in May. BTW, the latter is most likely a debacle with ≈ $37,000 in average daily trading volume (OpenSea’s number is 2,000x higher).
Some crypto enthusiasts think that even Apple, infamous for its crackdowns on Web3 apps, eyes finding a place in the NFT sun.
What’s next?
Platforms will put more focus on fitting into virtual worlds and virtual economies, Martha Reyes predicts. Randy Wasinger, CryptoSlam’s founder and CEO, expects more marketplaces, including copycats, to emerge. Users will benefit from the fierce competition, as the rivals will cook up various ways to poach users away from competitors. Wait for new features and perks. So will OneArt — to add the most popular to our app.
The #2, 3, 4, etc. marketplaces won’t wait before Akela misses the kill to try to eat away at monopoly. But the leader will for sure battle hard. OpenSea, with 1.5+ million active users, has cornered the multibillion dollar NFT market and won’t give up its current 75% market share just like that. The “Battle of Winterfell” is ahead. Which player would you bet on?
