Recent NFT startup acquisitions and other moves suggest a potential “war” ahead between NFT marketplaces, writes DappRadar.
OpenSea currently leads all NFT marketplaces, but new rivals are emerging and gaining traction in the space.
Even amid a weakened NFT market over the last couple months, top marketplace OpenSea has retained the dominant position in the space. But that first-mover advantage could come under threat from rivals that are both expanding in number and consolidating.
That’s according to a new industry report from blockchain analytics firm DappRadar, which pointed to the number of NFT marketplaces and aggregators acquired in recent months, potentially setting up what it describes as “looming NFT marketplace wars.”
OpenSea itself made the first big acquisition in recent months, acquiring NFT marketplace aggregator Gem in April. Gem allows users to purchase NFTs in batch buys across multiple platforms, and OpenSea CEO and co-founder Devin Finzer described the move as part of “a need to better serve more experienced, ‘pro’ users.”
Gem will remain an independent platform, however some of its features will also be integrated within OpenSea’s own platform. And OpenSea also recently launched its own Seaport marketplace protocol, which adds advanced features and cuts down on Ethereumgas fees (the costs associated with making transactions on the network).
The move will see the largest DeFi protocol, which enables non-custodial trades between users, now attempt to replicate that success in the NFT space. “These acquisitions will most likely pit OpenSea and Uniswap in direct competition with each other soon,” the DappRadar report surmises.
One day later, online marketplace eBay announced that it acquired KnownOrigin, a long-running NFT marketplace. While not a platform that has put up significant trading volume sums, KnownOrigin gives eBay the potential opportunity to quickly be a player in the NFT space.
An NFT is a blockchain token that can prove ownership for an item, including digital goods like artwork, profile pictures, video game items, and sports and entertainment collectibles. The market generated some $25 billion in trading volume in 2021, per DappRadar, and has already yielded around $20 billion in organic trading so far in 2022 per the latest report.
But the potential for changing tides in the NFT marketplace space is about more than just acquisitions. Newer rivals are also taking hold, including Magic Eden and X2Y2.
Meanwhile, Coinbase’s own NFT marketplace was expected to make waves across the industry, but so far it has apparently struggled to attract traders. A Coinbase representative told Decrypt that it is focusing on social aspects of the marketplace for now. We’ll see over time whether that approach translates into significant on-chain metrics too.
Whether it’s enough to avoid a prospective battle against rising and up-and-coming rivals, however, remains to be seen. But NFTs are still selling, despite falling prices and significantly diminished trading volumes amid the crypto market crash, so there’s still potential opportunity for fierce competition between platforms.
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