Capital Continues to Fuel the NFT Space as OpenSea’s Throne is Threatened

NFT marketplaces are cropping up right left and center amid continued inpouring of venture capital funding— and some are now threatening to dethrone OpenSea.
Image source: Medium/IrisNet blog

Quick take:

  • Venture capital investors do not show any signs of backing off their commitment to investing in NFTs.
  • On Wednesday, venture fund 1confirmation raised $100 million to invest in NFTs.
  • The influx of venture capital funding has inspired the formation of several NFT marketplaces, some of which are threatening to dethrone OpenSea.

As of this writing, the highly incentivised NFT marketplace X2Y2 is just edging above OpenSea in terms of the daily transaction volume. Last week, X2Y2 consistently outperformed OpenSea following the top NFT marketplace’s migration to its new platform Seaport.

Even LooksRare appeared to surge above OpenSea towards the end of the week. However, as it turned out, the migration process had its impact on OpenSea transactions, with a majority not being captured on leading NFT statistics dashboards on Dune Analytics.

When the data started to reflect correctly this week, it emerged that X2Y2 was still the most popular by transaction volume with 18.83k ETH compared to OpenSea’s equivalent of 18.58k ETH.

Source: @zxsasha Dune Analytics

On the other hand, LooksRare remained a distant third with a transaction volume of 7.09k ETH on June 21 according to a dashboard prepared by @zxsasha on Dune Analytics.

As a result, X2Y2 accounted for a market share of 42.3% while OpenSea has a slightly smaller share of 41.8%. LooksRare’s 15.9% puts it third in the ranking.

Source: @zxsasha Dune Analytics

Based on this data, it is clear that X2Y2’s highly incentivise platform is threatening to take the market away from OpenSea. However, it is also important to point out that OpenSea still controls the lion’s share of the market in terms of users and the number of traders with 91.7% and 91% respectively.

Moreover, there is also a question about the sustainability of the programs offered by platforms like X2Y2 and LooksRare. The latter challenged OpenSea in January consistently posting higher transaction volume but it has since fallen behind. 

Whether that means OpenSea should feel comfortable about its position in the industry is another thing.

X2Y2 is not the only platform threatening to take over from OpenSea. The industry is attracting players from the mainstream that are either acquiring NFT marketplaces or launching their own in partnership with Web3 developers.

The latest example, in this case, is eBay, which announced its acquisition of KnownOrigin to further its NFT plans. Founded in 2018, KnownOrigin allows users to create, buy and sell NFTs on the blockchain. The platform could benefit significantly from eBay’s huge financial war chest.

Earlier this month, customer relationship management company Salesforce also decided to act on its initial plans to launch an NFT platform. The company said it is launching a pilot version of its NFT cloud platform, allowing customers to mint, manage and sell NFTs.

OpenSea is also facing competition from popular decentralised finance protocols like UniSwap, which acquired the leading NFT aggregator platform Genie on Tuesday. Earlier this year, OpenSea bought Genie’s rival and the largest NFT aggregator by transaction volume Gem.

The leading NFT marketplace crown could also be under threat from other platforms that have shown an inclination towards offering more user-friendly services, both in terms of gas fees and other incentives.

KuCoin and OkCoin are good examples while Rarible recently partnered with Mfers to launch a community-first NFT platform allowing users to explore all types of utility and applications of their NFTs.

Solana-based Magic Eden NFT platform just raised $130 million valuing the company at $1.6 billion. It said it plans to extend its product offering to other marketplaces. This poses a huge threat to OpenSea.

OpenSea, with its fair share of drawbacks, which include among others, removing NFT collections from the platform without notifying the owners (the latest example— the RR/BAYC collection) is about to get a run for its money.

And with venture capital funding continuing to flow in as shown by 1confirmation’s $100 million Fund dedicated to investing in NFTs, there more startups could continue to crop up with their own platforms offering attractive rewards and incentives to traders.

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