With a market dominance of over 80% since about February 2022, Opensea, an NFT marketplace built on the Ethereum blockchain in 2017, has a stranglehold on the NFT industry.
In January 2022, OpenSea’s monthly trading activity on Ethereum hit a new historic level of US$5 billion, surpassing the previous peak of US$3 billion attained in August 2021. In January 2022, at a valuation of $13.3 billion, OpenSea raised US$300 million in Series C funding.
Competition For Novices
However, competition is rising as established and new players use increasingly aggressive strategies to carve out a piece of the market. CryptoSlam CEO and founder Randy Wasinger predicted the rise of additional NFT marketplaces beyond the Ethereum platform. Those markets that have already adopted NFT will thrive as its use becomes more widespread. “And there will be imitators who do the same thing, perhaps with a slight variation,” he predicted.
Attempting to lure customers away from OpenSea, the new NFT marketplace LooksRare initiated a “vampire attack” on January 13, 2022. LooksRare, which airdropped $LOOKS tokens as able-to-trade rewards, surpassed OpenSea’s sales volumes by a factor of 5. However, wash trading, in which NFTs are bought and sold between two wallets controlled by the same individual or group in order to claim the $LOOKS, contributed to the high volumes.
On January 29, 2022, CryptoSlam tweeted that it had adjusted its January sales volume figures by subtracting over US$8 billion due to wash sales. Meebits, an avatar NFT collection, took the biggest hit from wash trading, with US$4.4 billion lost. And then there came Loot ($705m), Cryptophunks v2 ($251m), and Terraforms ($2.9bn).
By Holding A Fire Sale Of Nine Mutant Ape Yacht Club NFTs
By retaining a liquidation sale of nine Mutant Ape Yacht Club NFTs, due to the steep discount, the offer was gone in almost no time. CEO and co-founder Zach Burks compared the shift to the sales promotions provided by Amazon and Alibaba.
NFT marketplaces have become increasingly competitive, with many sites like Rarible and SuperRare joining Nifty Gateway. Gaming NFT marketplace Fractal and native marketplaces for a certain collection like Axie Infinity and Larva Labs are just two examples of the smaller players pursuing these growing niches. Binance, the-ekrona.com, and Coinbase are just a few of the cryptocurrency exchanges competing for customers. The top trading platform in the United States, Coinbase, is operating with Mastercard to open an NFT marketplace.
You have now completed your brief knowledge of the competitiveness of NFTs. CryptoSlam’s CMO, Yohann Calpu, praised the proliferation of NFT markets, stating that niche players would increase competition and benefit consumers. “It’s like a first-time shopper who wants to check out everything at a big store like Walmart,” he explained. However, he continued, “Someone who is certain about what it is that they want will head to the market, where they will have a better chance of finding a bargain.”