What Coinbase's entry into the NFT market means for OpenSea?
Nifty Gateway, SuperRare, and MakersPlace were among the early entrants to establish a foothold in the market for non-fungible tokens (NFTs). However, the website OpenSea has since established a chokehold on it.
OpenSea, which handled about 35% of NFT trading volume between February and April (including a Quartz article sold at auction in March), has increased its market share to more than 95%, making it the top player by far in the business of matching buyers and sellers of what is essentially ownership proof, stored on i blockchain, for cryptocurrencies.
According to data from the crypto websites Dapp Radar and CryptoArt, of the $2.8 billion spent on NFT marketplaces in September, $2.72 billion went to OpenSea. In September, SuperRare saw less than $25 million in trading volume, putting it in second place among NFT marketplaces.
While OpenSea appears to have quickly gained control of the NFT market, its dominance may be threatened by an approaching crypto incumbent. Coinbase, the worlds second-largest crypto exchange, announced on Oct. 12 that it will create a NFT marketplace. Its a direct challenge to OpenSea, one that will put the top player in 'emerging markets' to the test.
NFTs for the masses are becoming increasingly popular.
Users must purchase the cryptocurrency ether on a crypto exchange like Coinbase and establish 'metamask' to connect to the platform in order to transact on OpenSea. A Coinbase NFT platform could simplify the process by allowing users to buy NFFs on the exchange with a credit or debit card.
NFTs are still a niche business, although they have grown in popularity. According to the website Nonfungible, there were only about 10,000 active NFT wallets each week in the last month. However, Coinbase, which has 68 million users (pdf), may make NFTs available to a much wider audience. For Coinbase customers who are already involved in the NFT market, the idea of having a single home for cryptocurrencies and NSFs may be attractive, while those who're new to the tokens will have 'a relatively easy way to buy or sell them'.
Mike Proulx, a vice president at the market research firm Forrester, said the business is betting on distinguishing itself by having slick [user interface] that demystifies the NFT process and makes it more accessible to the everyday creator and collector.
Comparing OpenSea and Coinbase, OpenSEA vs CoinBA.
OpenSea is in a good position as he is merely 'a relative old-timer', technically speaking. It supports many types of blockchains, provides excellent analytics, and has built credibility with verified user profiles, all of which will make it difficult to dislodge as the dominant NFT marketplace.
NFTs, on the other hand, are now available to a whole new audience on Coinbase. The company is among the go-to platforms for all things crypto, especially for noobs. Coinbase is almost certain to be a part of this growing business by reducing the friction of getting started in the NFT market and letting clients purchase an NTF with merely swiping.
Many believe that Coinbase will be an OpenSea killer, and it certainly has the potential to do so, said Pedro Herrera, a senior blockchain analyst at the crypto research firm DappRadar. At this moment, Id say it will hinder OpenSeas dominance, but for the time being, Openseal will remain a premier marketplace. Either way, Im getting my popcorn out.