Interested in everything innovation and thus, appeared some when in Web3. Former founder of Gaming Companies. Technical.
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Interested in everything innovation and thus, appeared some when in Web3. Former founder of Gaming Companies. Technical.
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After the first tweet of Yan (our creative lead) and the following retweet by the Gang as well as my own tweet, I’ve expected two possibilities, how the community will react:
Overwhelming support, gratitude and encouragement
Naysayers, critique or anything else, telling us that this is not possible
A third eventuality occurred, which I did not expect: Small support from the gang, however more silence than anything else. I started wondering: Why is that the case? There is a large NFT community by now, shilling their NFTs to sell within different discord channels - being a tedious and time-intensive task. A community which was awaiting marketplaces for long by various players, which however was always being postponed. I’ve expected a lot, but not restraint.
A process in my subconscious started to evaluate, why this was the case. The process ended up with two possibilities:
We do not have enough reach
People do not trust in our abilities
There could not be more. We might have not enough reach to communicate the message to the whole Hedera NFT community. Possible. However, which is even worse: People might not trust us. However, if this would be the case, and even naysayers are not stepping in and start talking us down, we need to get that right. This is another level of mistrust, however, based on nothing. On a second thought, I started recognizing a reasoning for that, which explains it quite well for me. If every core player within the ecosystem is postponing, saying it is not possible, postponing launches, doing token launches to finance development or taking other funding in etc., I would not trust any developer team - stating that they do it within max. 10 days - neither. I’d think this is some form of another BS. This is not the case, thus, I’ve decided to write down our approach and outline, why and how we make it work.
Before I am explaining our planning, let’s dive into what is holding back marketplace development currently. This analysis is somewhat technical and somewhat opinionated. Read with caution and discuss it with me. Very happy to dive into it.
On January 9th, there were almost 199.82 million USD transacted via OpenSea, the largest NFT marketplace out there. OpenSea takes a transaction fee of 2.5% per sale, leading to 4.9955 million USD revenue - on one single day, January 9th 2022. This was a spike in transactions that specific day, but even if you take the smallest transacted USD of 120.47 million in that time period, this still leaves OpenSea with 3.01 million USD on a single day. Plotted onto the year (without factoring NFT growth in there), this leaves OpenSea with a 1,098.65 million USD (yes, this is more than a billion) revenue forecast for the year 2022. You can blame this as an easy calculation and I could surely better (holding an economics degree), but this should only underpin one statement: Within the marketplace business model, there is a lot of money involved.
The Hedera NFT market is not transacting millions of USD a day (yet?), however the transaction fee on any sale leads to a pretty large amount pretty quickly. You see, there is a lot of money involved. Thus, there is a large race, to build that marketplace - to reach those crazy numbers. It does not always hold true that the first player wins - in fact, history shows that this is not at all an indicator of success, take Google for example. However, it might be a scenario within the ecosystem operating where we are in, that the first player can secure a lot of market share. Thus, there is a rush of making this work.
Why no marketplace has appeared yet, may have many-fold reasons. However, one of the main reason I am seeing, is the possibility to realize transaction fees.
This question can be answered more easily by describing how a marketplace works. Interestingly, I’ve written back then my bachelor theses about success factors for platforms and marketplaces, thus, this is an easy take for me.
Let’s have a look at the upper graphic: A marketplace helps, in its main form, facilitate trade. It acts as a trusted intermediary, pooling Sellers on one side and Buyers on one side. There are different forms of Marketplaces, however this is the main form.
In most markets, mostly digital, however, there is a lot of mistrust of both parties. A Buyer wants to receive their bought item, a Seller wants to receive the amount an item was sold for. Having an independent third party in between ensures trust and allows that the trade is facilitated.
Furthermore, marketplaces can provide more visibility for Sellers and more comparisons and information for Buyers - so, helping both sides.
Marketplaces are businesses and want to earn money - thus, they are putting a fee on top of the transactions. To earn money, to finance staff, marketing activities, development and so forth. There are other possibilities to earn money, however is that provisional one of the most used - e.g. by Amazon, Ebay, Airbnb, you name it.
To ensure that the transaction fee is landing at the middle-man, which is the marketplace, needs to receive the payment and redistribute it. This is not the only reason why the middle-man needs to receive it: To ensure safety, the payment is escrowed by the middle-man and released after a buyer confirmation was received. Thus, safe trade can happen.
Why this build up, you may ask. In my opinion, it is important to understand the underlying principles, to understand what is going on. Within Hedera, this middle-man-account is troublesome. We are early, and the infrastructure is not there to handle that kind of transaction efficiently. It might be done not, or semi-automatically, however not fully-automated from my perspective. This is the reason, why development has slowed down and marketplaces. These circumstances are being worked on and are expected to change in Q2 2022. With the NFT space heating up, new projects coming in and more attention being raised by existing projects, the missing marketplace is however a large canyon in the ecosystem.
A marketplace is beneficial in various terms, which I probably do not have to outline here. However, we hold the opinion, that any form of marketplace helps in this current stage.
If you understood the upper, this question should arise, and I do not want to leave it unanswered. A missing intermediary, the third party (the middle-man), leads to not receiving and forwarding the transactions - and are thus not being able to realize transactions fees to finance further development, financing the team and earning profits. So, why are we not waiting for new standards to gain a share of the profits appearing?
This can be answered coming from various cardinal directions:
Necessity of funds
The team of the Guilty Panda Prison Gang is familiar with developing web applications, efficiently and fast. As a side-business, we have been running a web-development agency for some time now and developed many applications for a variety of clients. Drawing back to those experiences and a trained skill set to build applications fast, reduces our expenditures by a lot. We are efficient and fast, thus, not depended on any external functions.
The Greater Goal
We are allocating our time and efforts to support the Gang. We've come up with a planning to help and empower our NFT holders through different ways: One of that is advancing the Hedera ecosystem, which is leading us to being an established player within the ecosystem. Furthermore, we expect by that to increase value of our NFTs and thus, increasing the value for our holders. This is one of the key principles we have committed to and serves as our polar star, where we are navigating to.
The build of the former passages might lead to the thought, that the Middle-Man is missing - which would lead to missing safety. This is however not the case by a walk-around we are planning to use: HashPacks Secure Trade.
The team of HashPack has introduced a secured trading feature with their latest release. While we want to stay independent of any wallets, it is the only player within the ecosystem to have such a feature (which we are aware of). This allows to split the middle-man.
As explained earlier, the Middle-Man has two main functions to fulfil:
Secure trade
Facilitate trade
While the technical boundaries do not allow us to secure trade at this point of time, we outsource that to e.g. HashPack. The marketplace we develop is focussing on the second point, facilitating trade.
The Gang Marketplace (name not final yet) is mainly facilitating trade. I explain this high-level concept directly and get concrete - what are we offering?
We allow for sellers to list their NFTs through a secure method
We allow buyers to search for the NFTs they are willing to buy
We enable communication between both parties to enable price discussions etc.
We provide structured data to see collection data and NFT data easily
We take care of reports, selling prices, portfolio overviews etc.
We allow for confirmed secondary sales, leading the marketplace to confirm floor prices, price development and other collection related metrics
More features are to be followed and are dependent on the community using the marketplace, proposing features and supporting future development.
If there is one takeaway you should take away from that post and to answer the entrance question:
Yes, we are serious. Yes, we are capable of doing this. Yes, this will happen.
After the first tweet of Yan (our creative lead) and the following retweet by the Gang as well as my own tweet, I’ve expected two possibilities, how the community will react:
Overwhelming support, gratitude and encouragement
Naysayers, critique or anything else, telling us that this is not possible
A third eventuality occurred, which I did not expect: Small support from the gang, however more silence than anything else. I started wondering: Why is that the case? There is a large NFT community by now, shilling their NFTs to sell within different discord channels - being a tedious and time-intensive task. A community which was awaiting marketplaces for long by various players, which however was always being postponed. I’ve expected a lot, but not restraint.
A process in my subconscious started to evaluate, why this was the case. The process ended up with two possibilities:
We do not have enough reach
People do not trust in our abilities
There could not be more. We might have not enough reach to communicate the message to the whole Hedera NFT community. Possible. However, which is even worse: People might not trust us. However, if this would be the case, and even naysayers are not stepping in and start talking us down, we need to get that right. This is another level of mistrust, however, based on nothing. On a second thought, I started recognizing a reasoning for that, which explains it quite well for me. If every core player within the ecosystem is postponing, saying it is not possible, postponing launches, doing token launches to finance development or taking other funding in etc., I would not trust any developer team - stating that they do it within max. 10 days - neither. I’d think this is some form of another BS. This is not the case, thus, I’ve decided to write down our approach and outline, why and how we make it work.
Before I am explaining our planning, let’s dive into what is holding back marketplace development currently. This analysis is somewhat technical and somewhat opinionated. Read with caution and discuss it with me. Very happy to dive into it.
On January 9th, there were almost 199.82 million USD transacted via OpenSea, the largest NFT marketplace out there. OpenSea takes a transaction fee of 2.5% per sale, leading to 4.9955 million USD revenue - on one single day, January 9th 2022. This was a spike in transactions that specific day, but even if you take the smallest transacted USD of 120.47 million in that time period, this still leaves OpenSea with 3.01 million USD on a single day. Plotted onto the year (without factoring NFT growth in there), this leaves OpenSea with a 1,098.65 million USD (yes, this is more than a billion) revenue forecast for the year 2022. You can blame this as an easy calculation and I could surely better (holding an economics degree), but this should only underpin one statement: Within the marketplace business model, there is a lot of money involved.
The Hedera NFT market is not transacting millions of USD a day (yet?), however the transaction fee on any sale leads to a pretty large amount pretty quickly. You see, there is a lot of money involved. Thus, there is a large race, to build that marketplace - to reach those crazy numbers. It does not always hold true that the first player wins - in fact, history shows that this is not at all an indicator of success, take Google for example. However, it might be a scenario within the ecosystem operating where we are in, that the first player can secure a lot of market share. Thus, there is a rush of making this work.
Why no marketplace has appeared yet, may have many-fold reasons. However, one of the main reason I am seeing, is the possibility to realize transaction fees.
This question can be answered more easily by describing how a marketplace works. Interestingly, I’ve written back then my bachelor theses about success factors for platforms and marketplaces, thus, this is an easy take for me.
Let’s have a look at the upper graphic: A marketplace helps, in its main form, facilitate trade. It acts as a trusted intermediary, pooling Sellers on one side and Buyers on one side. There are different forms of Marketplaces, however this is the main form.
In most markets, mostly digital, however, there is a lot of mistrust of both parties. A Buyer wants to receive their bought item, a Seller wants to receive the amount an item was sold for. Having an independent third party in between ensures trust and allows that the trade is facilitated.
Furthermore, marketplaces can provide more visibility for Sellers and more comparisons and information for Buyers - so, helping both sides.
Marketplaces are businesses and want to earn money - thus, they are putting a fee on top of the transactions. To earn money, to finance staff, marketing activities, development and so forth. There are other possibilities to earn money, however is that provisional one of the most used - e.g. by Amazon, Ebay, Airbnb, you name it.
To ensure that the transaction fee is landing at the middle-man, which is the marketplace, needs to receive the payment and redistribute it. This is not the only reason why the middle-man needs to receive it: To ensure safety, the payment is escrowed by the middle-man and released after a buyer confirmation was received. Thus, safe trade can happen.
Why this build up, you may ask. In my opinion, it is important to understand the underlying principles, to understand what is going on. Within Hedera, this middle-man-account is troublesome. We are early, and the infrastructure is not there to handle that kind of transaction efficiently. It might be done not, or semi-automatically, however not fully-automated from my perspective. This is the reason, why development has slowed down and marketplaces. These circumstances are being worked on and are expected to change in Q2 2022. With the NFT space heating up, new projects coming in and more attention being raised by existing projects, the missing marketplace is however a large canyon in the ecosystem.
A marketplace is beneficial in various terms, which I probably do not have to outline here. However, we hold the opinion, that any form of marketplace helps in this current stage.
If you understood the upper, this question should arise, and I do not want to leave it unanswered. A missing intermediary, the third party (the middle-man), leads to not receiving and forwarding the transactions - and are thus not being able to realize transactions fees to finance further development, financing the team and earning profits. So, why are we not waiting for new standards to gain a share of the profits appearing?
This can be answered coming from various cardinal directions:
Necessity of funds
The team of the Guilty Panda Prison Gang is familiar with developing web applications, efficiently and fast. As a side-business, we have been running a web-development agency for some time now and developed many applications for a variety of clients. Drawing back to those experiences and a trained skill set to build applications fast, reduces our expenditures by a lot. We are efficient and fast, thus, not depended on any external functions.
The Greater Goal
We are allocating our time and efforts to support the Gang. We've come up with a planning to help and empower our NFT holders through different ways: One of that is advancing the Hedera ecosystem, which is leading us to being an established player within the ecosystem. Furthermore, we expect by that to increase value of our NFTs and thus, increasing the value for our holders. This is one of the key principles we have committed to and serves as our polar star, where we are navigating to.
The build of the former passages might lead to the thought, that the Middle-Man is missing - which would lead to missing safety. This is however not the case by a walk-around we are planning to use: HashPacks Secure Trade.
The team of HashPack has introduced a secured trading feature with their latest release. While we want to stay independent of any wallets, it is the only player within the ecosystem to have such a feature (which we are aware of). This allows to split the middle-man.
As explained earlier, the Middle-Man has two main functions to fulfil:
Secure trade
Facilitate trade
While the technical boundaries do not allow us to secure trade at this point of time, we outsource that to e.g. HashPack. The marketplace we develop is focussing on the second point, facilitating trade.
The Gang Marketplace (name not final yet) is mainly facilitating trade. I explain this high-level concept directly and get concrete - what are we offering?
We allow for sellers to list their NFTs through a secure method
We allow buyers to search for the NFTs they are willing to buy
We enable communication between both parties to enable price discussions etc.
We provide structured data to see collection data and NFT data easily
We take care of reports, selling prices, portfolio overviews etc.
We allow for confirmed secondary sales, leading the marketplace to confirm floor prices, price development and other collection related metrics
More features are to be followed and are dependent on the community using the marketplace, proposing features and supporting future development.
If there is one takeaway you should take away from that post and to answer the entrance question:
Yes, we are serious. Yes, we are capable of doing this. Yes, this will happen.
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