Hello everyone. I hope you’ve had a great start to 2022. To start my year on a productive note, I have done lots of reading and talked with prominent players in blockchain technology investments. No two investors agree on the best investment approach, so my solution has been to try and understand their mindset. In my opinion, it is really important to grow a strategy play based on your own knowledge, connections, and risk tolerance.
Why is this important for creators? We should be thinking about investing some of our income to fund creative projects or startups and to build a nest egg for retirement. Eventually, I will be publishing informative posts on NFTs (digital assets stored in smart contracts on a blockchain), blockchain infrastructure, smart contracts, and cryptocurrencies. Each of these topics exists in its own ecosystem. The main ideas here are registration of ownership, a decentralised protocol for validating transactions, and platforms for creating and trading tokens. At the end of this megathread, you will see links for further reading.
None of the views expressed here are financial advice. Please do your own research, as always.
One of the first questions I am asked after “What are NFTs?” is “Where should I sell them?” Today’s post will give you some guidance through a discussion of NFT marketplaces. This presentation was first published on October 13, 2021 by Mide, an angel investor and crypto trading expert I met on Twitter Spaces. He published a megathread on his Twitter timeline to discuss his outlook on marketplaces for non-fungible tokens. So far, players with real world skills are entering the community. And they are bringing marketing expertise, professional teams, and networking skills to a market that is saturated with art. These newcomers will be competitive if they can offer tangible value to collectors. Marketplaces will then compete to provide a platform for the most popular project owners, and depending on the outcome of the negotiations, primary market collectors will benefit.
NFTs. They are everywhere these days. And if you’ve ever bought or sold one, you probably did it on Open Sea. The world’s largest NFT marketplace has handled a whopping $8 billion worth of transactions since the start of 2021.
The success of NFTs is no longer a point of discussion. Rather, it makes sense to think about the continued success of Open Sea as a marketplace. In the latter months of 2021, there was a surge in rival NFT marketplaces, many aiming for the top spot. So, is Open Sea under threat? That is what I want to explore today.
In the summer of 2021, the earliest sign of an Open Sea competitor came from one of the largest decentralized exchanges, SushiSwap. Sushi has announced its own NFT platform called Shoyu (meaning soy sauce in Japanese). The platform is currently in the final stages of development. Shoyu’s main advantages are integration with existing Sushi Swap protocols and the distribution of transaction fees to SUSHI token holders.
However, from the SHOYU NFT teasers released so far, the marketplace looks more like a competitor to Super Rare than OpenSea. This is because it targets individual artists and art collectors rather than NFT flippers (people who buy NFTs and resell them for a bigger profit).
The next marketplace that caught my eye is the newly launched Infinity. Entering the scene in October, 2021, Infinity has been trying to lure Open Sea users to its platform with the promise of a token airdrop (free tokens sent directly to wallets visible on the Open Sea platform).
Anyone who has spent more than 0.02 ETH ($US 62) on OpenSea can claim a bag of Infinity tokens if they spend an equal amount of ETH on the Infinity marketplace. Additionally, Infinity aims to be community-driven and completely decentralized, with user governance coming from holders of the airdropped tokens. Infinity even admits that it uses the same smart contracts as Open Sea. The Infinity developers are transparent about trying to lure users away from Open Sea in a so-called “vampire attack.”
On the centralised exchange side, there is a new offering from FTX US. The exchange’s latest marketplace launched in October. It offers a much-needed improvement to NFT trading on Solana. It also provides a safer and more intuitive way to discover NFTs. At present, FTX only supports Solana NFTs but has said it intends to add support for Ethereum-based NFTs soon. FTX already runs an NFT marketplace and users can bid on experiences like a match in the popular League of Legends game.
Finally, we have Coinbase NFTs. Nasdaq’s first cryptocurrency exchange says that it will help creators to flourish on the exchange. In the announcement of its waitlist, it said that “by fostering connections, Coinbase NFT will help creators, collectors, and fans build community.” However, despite the optimism of this presentation, it is newcomer FTX that has the biggest chance of dethroning Open Sea, in my opinion. The platform has proven that it will get what it wants. It has also spent millions on marketing and promotional partnerships. It has already made a name for itself as a provider of cryptocurrency derivates, and I believe that it will be able to achieve the same level of success with NFTs.
The Year in Ethereum 2020
Josh Stark and Evan Van Ness via Medium
Why I’m bearish on Ethereum
Solana: A new architecture for a high performance blockchain v 0.8.13
$LUNA Investment strategy discussion on Twitter Spaces (recorded)