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OpenSea has been the premiere marketplace since the NFT boom of 2021.
2 years ago, everyone was almost certain that OpenSea couldn’t be dethroned as the go-to NFT marketplace.
We couldn’t be more wrong.
Sudoswap: Kicked off the shift with a marketplace rocking zero royalties.
LooksRare: Shook things up by dropping $LOOKS and pulling users from OpenSea.
BLUR: Jumped in the ring, throwing $BLUR into the mix & stealing more OpenSea users.
Magic Eden: Building slowly but surely, adding more heat to the competition.
Fast forward to now, and OpenSea's not just playing catch-up; there are whispers about them being open to a buyout. 😳
OpenSea CEO Devin Finzer says the NFT platform is open to deals.
At the same time, its competitors are shipping hard.
Magic Eden is open-sourcing its platform, introducing a new rewards system, launching a wallet, and collaborating with Yuga Labs to build a marketplace that enforces royalties.
Tensor, a Solana-based marketplace, just revamped its user reward system.
Rarible just launched RARI Chain – a new Layer 3 scaling platform built on Arbitrum that enforces royalties.
With all of these upgrades, OpenSea is losing more and more ground, and Magic Eden (in particular) has the opportunity to dethrone it as the go-to NFT marketplace.
Will that happen? Will Magic Eden emerge as the NFT marketplace winner? 👑
Let’s dig in and find out. ⏬
Context: Magic Eden started off as the main NFT Marketplace on Solana. During the bear market, they’ve been expanding across Ethereum, Bitcoin, and Polygon as well.
Early last week, Magic Eden announced plans to open-source their minting and trading protocols as well as their grant governance in collaboration with newly formed Non-Fungible DAO.
The DAO will bring decentralized governance over Magic Eden’s decisions, led by $NFT holders – a token that will be airdropped soon to early Magic Eden users.
How will the $NFT allocation be decided? Let’s find out. 👇
Last week, Magic Eden introduced a revamped rewards system. “A meticulously crafted plan to give back to Magic Eden’s OGs, collectors, creators, and degens alike.”
They’re distributing so-called Diamonds 💎 to users who buy, sell or make offers on NFT collections within the top 100.
Users can also boost their allocations by having 100% loyalty, which is earned by NOT using other NFT marketplaces.
Now, Diamonds on Magic Eden have been a thing since March 2023…
However, starting February the 2nd, Magic Eden will do a retroactive airdrop of Diamonds to active users all the way back from 2021.
If you’ve used Magic Eden in the past few years, you’ll get your Diamonds!!
Magic Eden Ticket holders are included…
1 year ago, Magic Eden dropped ‘Tickets’, a collection of 30,000 NFTs to its most active platform users.
‘Tickets’ were meant to be membership passes to the Magic Eden DAO, however, the plan to build a DAO pretty much failed.
It’s good news that ‘Ticket’ holders will be rewarded with Diamonds though. 👍
It’s likely that your $NFT allocation will depend on how many Diamonds you collect.
The most interesting thing about Magic Eden’s reward system is that it’s happening across all supported chains: Solana, Polygon, Ethereum and Bitcoin.
To manage all of these rewards, Magic Eden users will obviously need a wallet that supports all chains.
Meet the Magic Eden Wallet – which is most likely going to officially launch today – it’s been in Beta for months now.
This wallet will make it easy for users to manage and transfer cryptocurrencies across Solana, Ethereum, Polygon, and Bitcoin Ordinals within a single interface.
With all of these upgrades, there’s no reason why Magic Eden won’t overtake OpenSea as the most popular NFT marketplace around.
But let’s not overlook the other marketplaces and what they’re up to. 👀
Tensor, a Solana NFT marketplace, has seemingly overtaken Magic Eden (by a landslide) in both volume and users over the past 1 month.
So is Tensor the biggest NFT marketplace right now?
Certainly not! Most of the trades happening on Tensor right now are wash trades, aka people buying and selling their own NFTs to accrue Tensor Points (rewards).
Think of Tensor as the Blur of Solana. With their new ‘Price Locks’ release, they allow users to long and short NFTs using leverage.
Tensor realized that they had 0 chances of competing against the likes of Magic Eden, so they pivoted to offer leveraged NFT trading.
To incentivize users, they’re giving away bonus points to those who use Price Locks.
Naturally, with Tensor’s Season 3 being in full swing, traders are bidding, listing, and market-making to earn points.
Similar to Blur, until rewards stop, users will continue to flock to Tensor to farm an upcoming airdrop.
But don’t get fooled by the analytics – most of the numbers are fake!
The RARI Foundation has launched the RARI Chain.
This is an Ethereum-based Layer 3 chain that tackles NFT ecosystem scalability, offers customizable rules and governance, and embeds creator royalties directly.
The RARI chain will be governed by the RARI DAO and supported by $RARI token holders, focusing on satisfying the needs of NFT creators.
This is a big deal. This could be a chain that’ll be used by lots of creators and users during the bull market.
And with $RARI being worth just $36 million in fully diluted valuation, $RARI could be a good play during the bull run. 🚀
Reply to this email with YES if we should do a $RARI deep dive!!
In 2021, OpenSea was a dominant player in the NFT market, seemingly unshakable due to its early start.
However, by 2024, it's struggling to stay afloat. This situation offers several key lessons:
User Engagement: OpenSea's decline shows the importance of listening to users.
In the profit-driven NFT market, users quickly shift to platforms that offer better incentives, such as higher rewards or airdrops.
User Needs: OpenSea didn't adequately cater to its two main user groups:
Traders looking for profits – OpenSea never launched a token.
Creators seeking enforced royalties – OpenSea removed these all together.
This oversight led to a significant user migration to other platforms.
Consistency and Vision: The platform's approach to royalties illustrates a lack of clear principles and consistent strategy.
Their inconsistent approach – from removing to optionally enforcing, then back to removing royalties – highlights a lack of decisive leadership and clear vision.
Although OpenSea faces challenges, it's not too late for a turnaround.
Its future depends on a new, strong leadership that can redefine its direction and reestablish its market presence.
It’ll be interesting to watch it all unfold. 👀
Thanks for reading. And remember, you're strong, you’re powerful, you’re alpha! ❤️
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Disclaimer: This article is for informational purposes only and not financial advice. Conduct your own research and consult a financial advisor before making investment decisions or taking any action based on the content.
Kyle Reidhead
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