OpenSea is the undisputed giant of the NFT arena. The website was the first non-fungible token market and is also the largest in terms of traffic and valuation: the company recently raised $300 million in new funding at a valuation of $13.3 billion.
However, the site has had its share of growing pains. a scandal over internal traininghigh profile attacks on usersY Bans on Iranian users may leave opportunities for many OpenSea competitors to capture a share of the NFT market, which is estimated to be worth tens of billions of dollars.
Some of OpenSea’s competitors offer different approaches on the business side. Selected art markets like Foundation and SuperRare try to exhibit exclusive artists, while decentralized marketplaces like LooksRare and Rarible distribute their fees to users instead of keeping them for themselves. Even more marketplaces operate on smaller blockchains or service-specific projects.
Based on social media insights provided by our parent company, Thinknum Alternative Data, Opensea has the most Twitter followers in the NFT space and has shown the most growth over the past six months compared to the competition.
Here’s our guide to the NFT markets you should know about and what they’re bringing to the Web3 table. Quick disclosure: I bought and sold NFT through OpenSea, and not through any of the other sites referenced here, but have no affiliation with the company except as a user.
The first and largest NFT market, Open sea has taken a formative advantage among its competitors. Their latest funding roundrun by venture capital firms Paradigm and Coatue Management, saw the four-year company valued at $13.3 billion.
OpenSea’s model is simple: the company keeps 2.5% of every NFT transaction made on its marketplace. Trading volume at Opensea last month was nearly $2.5 billiongiving OpenSea an approximate revenue of $62.5 million, which isn’t bad for not selling any physical assets or launching significant new features.
OpenSea currently operates on two blockchains: Ethereum, which is the major blockchain for buying and selling NFTs, and Polygon, a so-called “Layer 2” or “sidechain” system that works on top of the Ethereum blockchain to allow transactions with lower fees and faster speeds. OpenSea is also expected to introduce support for Solana, an Ethereum competitor with its own development of the NFT ecosystem.
The platform is also relatively easy to understand for people who are new to NFT and has an elegant and information-rich user interface. Sales can take the form of direct auctions or listings, and users can view their NFT collection on their profile page. OpenSea also supports a wide variety of crypto wallets, including MetaMask, WalletConnect, Coinbase Wallet, and a dozen others.
While cryptocurrency and Web3 evangelists often cite decentralization as a core principle, OpenSea can look a lot like a Web2 company operating in the Web3 space. Instead of doling out its fees to users or giving them the option to vote on business decisions, as some marketplaces do, OpenSea operates like a typical technology company.
One implication of this is that OpenSea will take steps to freeze assets when they are reported stolen, and not allow them to be bought or sold. Truly decentralized platforms tend not to intervene in these situations. Although in theory OpenSea’s approach should protect victims, in practice the policy results in unwitting buyers get stuck with assets They didn’t know they were stolen.
OpenSea has also run into other drawbacks. Open sea lost its product headNate Chastain, for an insider trading scandal, after he was suspected of profiting by acquiring project NFTs shortly before they were promoted on the OpenSea website.
The platform also recently Iranian users banned of using the market in accordance with international sanctions, which greatly angered his community of Iranian artists. The site has continued to fight to reduce plagiarism and copyright infringement in its market, again needing to weigh the risks between stepping in as a consumer-friendly central authority and catering to constituents who would like to see it become more decentralized.
While OpenSea’s approach is to maximize the volume of buyers and sellers, BaseThe strategy of focuses more on exclusivity. Anyone can buy an NFT for sale on the market, but artists must be invited by community members to join the platform.
If OpenSea is Etsy, catering to anyone who wants to buy or sell NFTs, Foundation sees itself as an NFT-focused version of Christie’s or Sotheby’s, curating high-quality collections for a distinguished clientele. The Internet’s iconic Nyan Cat, for example, was sold as NFT on Foundation, getting 300 eth, almost $600,000 at the time, but more than $1,000,000 today given the rise in value of ether.
Foundation currently only supports Ethereum NFT and charges a fee of 5% of all transactions. The company website claims that artists have made nearly $200 million from selling NFTs on its platform, which would bring the company $10 million in revenue since its inception.
While Foundation has seen respectable sales volume, it has struggled to grow the number of users who consistently visit the site. According to web traffic data from Thinknum Alternative Data, OpenSea and, to a lesser extent, Rarible have a significant lead in web traffic over Foundation.
Next up we have the ‘Weird’ squad, three markets with similar sounding names but different curation and business models. Super rare it is most similar to Foundation, selecting a selection of artists to sell NFTs on the Ethereum blockchain.
Both SuperRare and Foundation house artwork that is more like traditional art than much of the business or game oriented projects at OpenSea. SuperRare primarily operates on an auction-based system, with the platform charging 15% of the initial sale and 3% of subsequent sales as a fee.
This work, titled All Time High in the City, was originally sold in November 2018 by pseudonymous digital artist XCOPY for 0.5 eth, about $1600 today. Three years later, it sold for 1,630 eth, nearly $6.2 million at the time.
However, unlike Foundation, this fee is not intended for a company with a traditional structure. Instead, SuperRare is operated by the super rare DAOor decentralized autonomous organization, which votes on proposals that govern the market using $RARE tokens that were distributed to prominent artists and collectors on the platform.
This means that SuperRare is following a Web3-style approach to running the platform, distributing fees to the community and relying on a diverse coalition for governance rather than ceding leadership to a CEO or board of directors.
LooksRare and X2Y2
AppearanceRare Y X2Y2 combine OpenSea’s strategy to welcome all sellers and SuperRare’s governance and fee redistribution strategy. LooksRare only deducts 2% of a sale as a fee, 20% less than OpenSea, and redistributes those fees to those interested of the platform’s $LOOKS token, including the platform’s pseudonymous founding team.
To put it as simply as possible, LooksRare rewards its platform users and true believers in its business model, those who are willing to risk cryptocurrency tokens, by redistributing the fees it collects from NFT trades to those users. While the platform has seen impressive volume in sales, some have raised concerns that the volume consists largely of laundering trade by users looking to earn rewards by buying and selling NFTs with each other.
X2Y2 follows a similar model to LooksRare, and both platforms were launched by airdropping their respective tokens to the most active users on OpenSea, attempting to divert your user base.
Founded in 2019, the Los Angeles-based company queer is another NFT market, notable for service four different blockchains: Ethereum and Polygon, which also supports OpenSea, but also Tezos and Flow. Rarible also follows a decentralized governance structure, allowing holders of its $RARI token to vote on proposals that govern the market.
Rarible charges the same platform fee as OpenSea, 2.5% on each transaction. However, Rarible allows NFT creators to set their royalties at up to 50%, while OpenSea and most other marketplaces cap royalties at 10%. Royalty fees allow NFT creators to continually profit from secondary sales of their NFTs: a 50% royalty would see an NFT seller only receive 47.5% of the winning bid after royalties were collected and platform fees.
In this graph comparing the growth of Twitter followers for OpenSea and Rarible, the two markets show similar trends, although OpenSea has a clear advantage.
But wait, there is more
Soon: MagicEden Y solanarte serves NFT on the Solana blockchain. ingenious gateway it has sold parts to NFT giants Beeple and Pak, and has been acquired by the Winklevoss twins, owners of the Gemini cryptocurrency exchange. Mark Cuban has endorsed mineable. MakersPlace has financing from Sony Music and Eminem. Top Tier NFT Projects Cryptopunks and axie infinity They have their own markets.
Suffice to say, there is a solid market of markets to choose from, both as an NFT collector and as an NFT artist. What remains to be seen is whether OpenSea will survive its growing pains and crush its competition, or whether the company simply rests on a shaky foundation.