#254: The Next Chapter of Growth for NFT Marketplaces

🏪 What are Magic Eden, LooksRare, Blur, and OpenSea up to?

I’m 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 doesn’t take days off 😵‍💫

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 announced…a wallet?! Not your average wallet extension though, this one’s 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, you’ll be prompted to enter your email to sign up for the waitlist.

Emmy the mascot is pretty cute

So why create a browser extension when there’s 2891 other wallets out there? Let’s look at my browser extensions as an example for someone who’s 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 extension’s 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 Eden’s 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 Eden’s 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 you’ve ever had to download new wallets for different blockchains like I shared above, or had to bridge assets from one blockchain to another, it’s daunting. You might get used to it if you’re active across various ecosystems.

But let’s face it, this is us:

ME’s 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 isn’t exactly novel. There are other cross-chain solutions that have been in the works or recently announced, such as Phantom’s Cross-Chain Swapper, LayerZero’s 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 I’m 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, I’ve been meaning to explore the Solana NFT ecosystem but haven’t 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 you’re wondering what he’s referring to regarding BAYC’s ETH marketplace, Magic Eden and Yuga Labs are partnering to create a marketplace that enforces royalties, announced earlier this month during Ape Fest.

While I’m still digesting all those Thanksgiving leftovers, it’s great to see Magic Eden continuing to cook.

LooksRare’s 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.

How does it work?

• 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 ‘active’ 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 aren’t 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 ‘escape-ETH’ 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 didn’t have the chance to mint, acquire more Agents to increase their chances of winning, or provide another way to leave the game without escaping

LooksRare’s strategy is clearly different than Magic Eden’s Wallet extension, but this game deserves recognition as this NFT marketplace isn’t just a place to buy and sell NFTs. They’re 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 Blur’s Season 2 airdrop mechanics last week, so I’ll 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, it’s clear that the team views NFTs beyond just digital collectibles, but rather financial assets. Regulatory gray area? Maybe, I’m 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 🫨

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 cycle’s 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 ‘Opensea 2.0’ to allow for faster innovation.

What does that mean? No idea 🤷‍♂️

As it stands today, OpenSea is an easy target to make fun of and it’s 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, they’re 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 we’re seeing from some of the top NFT marketplaces, we get something like this:

There’s no right or wrong approach, as the NFT space is expanding again vs. contracting over the past several months. We’ll see which of these approaches pan out.

The future of marketplaces is bright, especially for those in web3.

See you Thursday!