#254: The Next Chapter of Growth for NFT Marketplaces
đȘ What are Magic Eden, LooksRare, Blur, and OpenSea up to?
Iâm back from a Thanksgiving weekend spent with family and food. For those of you that celebrated, I hope you had a good one! Time to dive back in, this industry doesnât take days off đ”âđ«
While I was busy eating turkey, turkey leftovers, and recovering from the turkey food coma, a couple of NFT marketplaces made some notable announcements.
Magic Eden introduces the Magic Eden Wallet
Yesterday morning, Magic Eden announcedâŠa wallet?! Not your average wallet extension though, this oneâs dedicated to the Magic Eden marketplace platform.
The wallet extension is only available to a select group of testers currently. However, if you download it, youâll be prompted to enter your email to sign up for the waitlist.
So why create a browser extension when thereâs 2891 other wallets out there? Letâs look at my browser extensions as an example for someone whoâs active onchain and has experimented across a few different blockchains (still predominantly focused on the Ethereum and EVM ecosystems though).
I had 6 different crypto wallet extensions before adding Magic Eden, with a few I forgot about. So why is ME launching a new wallet extension app in this seemingly crowded space? The extensionâs description in the Chrome Web Store provides a good idea with select points below:
Instantly transfer cryptocurrencies between chains and easily collect any NFT on Solana, Ethereum, Polygon, or Bitcoin Ordinals
Use a single cross-chain wallet without switching between multiple chain-specific wallets
Direct integration with Magic Edenâs NFT platform gives you better NFT management, experience, and rewards on Magic Eden
Do more with your NFTs directly from your wallet. View, purchase, list, and sell NFTs on Magic Eden without leaving your wallet.
Use easy payment methods such as debit card, bank transfer, or Apple Pay to buy or sell across chains. Magic Eden Wallet supports localized currency in select regions.
If I were to summarize these points into one theme:
Reduce friction
Breaking down these points again from the angle of reducing friction:
Reduce cross-chain crypto friction: Instantly transfer cryptocurrencies between chains and easily collect any NFT on Solana, Ethereum, Polygon, or Bitcoin Ordinals
Reduce wallet extension friction: Use a single cross-chain wallet without switching between multiple chain-specific wallets
Reduce platform friction: Direct integration with Magic Edenâs NFT platform gives you better NFT management, experience, and rewards on Magic Eden
Reduce NFT management friction: Do more with your NFTs directly from your wallet. View, purchase, list, and sell NFTs on Magic Eden without leaving your wallet.
Reduce payment friction: Use easy payment methods such as debit card, bank transfer, or Apple Pay to buy or sell across chains. Magic Eden Wallet supports localized currency in select regions.
If youâve ever had to download new wallets for different blockchains like I shared above, or had to bridge assets from one blockchain to another, itâs daunting. You might get used to it if youâre active across various ecosystems.
But letâs face it, this is us:
MEâs wallet extension plans to put this activity where IMO it belongs: the background. And instead, focus on the fun stuff: collecting and transacting.
What the ME wallet is doing isnât exactly novel. There are other cross-chain solutions that have been in the works or recently announced, such as Phantomâs Cross-Chain Swapper, LayerZeroâs cross-chain protocol, Metamask Snaps, and more.
But again, this solution is specifically integrated and specialized for the Magic Eden marketplace and NFTs (and likely eventually beyond), creating what I imagine is the beginning of an expanding product portfolio, mirroring their cross-chain NFT expansion efforts over the past year.
What Iâm curious about as the ME Wallet extension rolls out:
Is the ME Wallet experience so much better as an alternative to the point that onchain users like myself will switch over?
If these users switch over, to what degree will they switch over? For example, Iâve been meaning to explore the Solana NFT ecosystem but havenât due to time and attention constraints. Will the ME Wallet help me break that barrier? And if it does, will I use it solely for Solana NFTs, or eventually shift more of my NFT activity to the ME platform in general?
How might ME incorporate additional incentives with its rewards program to boost wallet extension adoption and retention?
Jay from Web3 Academy also had a great take on the ME Wallet announcement:
If youâre wondering what heâs referring to regarding BAYCâs ETH marketplace, Magic Eden and Yuga Labs are partnering to create a marketplace that enforces royalties, announced earlier this month during Ape Fest.
While Iâm still digesting all those Thanksgiving leftovers, itâs great to see Magic Eden continuing to cook.
LooksRareâs Infiltration
Last week LooksRare, another NFT marketplace that launched back in January 2022 along with a token ($LOOKS), launched Infiltration, a NFT collection and survival game that includes some big prizes.
The Agents were minted for 0.05 ETH (~$100) each, with a max supply of 10,000
The game starts 24 hours after the conclusion of the mint, with all Agents having an âactiveâ status
Every 7 minutes, 0.3% of all active Agents are wounded. Players have several hours to heal their Agents, using the LOOKS token. Wounded Agents that arenât healed eventually die.
25% of the LOOKS used for healing are burned, and the remaining 75% goes to the top 50 Agents as an additional prize
Agents accrue âescape-ETHâ over time and can escape at any time
Once there are 50 Agents left, the game enters the final stage. One agent will die every round until there is only 1 Agent left, winning the grand prize.
Agents can be bought and sold on the secondary market, allowing new players to join if they didnât have the chance to mint, acquire more Agents to increase their chances of winning, or provide another way to leave the game without escaping
LooksRareâs strategy is clearly different than Magic Edenâs Wallet extension, but this game deserves recognition as this NFT marketplace isnât just a place to buy and sell NFTs. Theyâre using their platform as a launchpad for different onchain games to generate awareness and attract attention and engagement while using their token as an additional incentive along with their Gems Rewards program which is also tied to LOOKS rewards.
Speaking of games, LooksRare has launched other games in the past, like Raffles (exactly what you think it is), YOLO (a roulette-like game) and Poke the Bear (coming soon).
In case you were wondering, waaz won the pot with a 10.87% probability. Gotta love the game of chance!
Blur doubles down on NFTfi with Blast
I covered Blurâs Season 2 airdrop mechanics last week, so Iâll keep this brief.
Pacman, the founder of both Blur and Blast (the L2 that will launch early next year), shared his thoughts on why he decided to build Blast:
Reducing NFT transaction costs
Institutional-grade NFT perps: a financial derivative similar to futures based on the price of the asset without holding the asset itself
Allowing assets on the blockchain to earn yield natively. Hold ETH or stablecoins on Blast and earn 4% or 5% respectively.
With the direction that Blur and Blast are going, itâs clear that the team views NFTs beyond just digital collectibles, but rather financial assets. Regulatory gray area? Maybe, Iâm not a lawyer.
The speculation around the L2 (generous to call it that at this point) with the expectation of yield and rewards has resulted in a TVL of $602M so far đ«š
That said, Dan Robinson (research partner at Paradigm, lead investor of Blur and Blast) shared his thoughts regarding his concerns around Blast:
And that leaves us with OpenSea
Last cycleâs crown jewel of NFT marketplaces has been sailing in some rough waters lately. Earlier this month, Devin Finzer, CEO of OpenSea, announced that the company conducted another round of layoffs and would be reorienting the team around âOpensea 2.0â to allow for faster innovation.
What does that mean? No idea đ€·ââïž
As it stands today, OpenSea is an easy target to make fun of and itâs easy to forget that their marketplace was probably where many of us bought our first NFT from.
OS is still objectively the most reputable marketplace, especially for larger brands entering the space. I also imagine they will be focusing on different ways to engage and support creators in a deeper and richer way.
After all, theyâre still hiring for a Product Lead, Creator role
OS is down, but not out. How will they bring volume, retention, and engagement back to their platform when you have ME, LooksRare, and Blur making their respective moves?
Putting it all together
Comparing (and simplifying) each of the directions weâre seeing from some of the top NFT marketplaces, we get something like this:
Thereâs no right or wrong approach, as the NFT space is expanding again vs. contracting over the past several months. Weâll see which of these approaches pan out.
The future of marketplaces is bright, especially for those in web3.
See you Thursday!
Hey @tpan thanks for sharing this insight, whatâs your take on blending marketplace with web3 social???
Great read! I lol'd at "And that leaves us with OpenSea" xD
BTW, gave you a follow on Twitter! @thisissmooth is my handle, would love to connect!