Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

1. Competitive landscape of NFT trading platforms

(1) Rapidly growing NFT market

As of June 30, 2022, the cumulative transaction volume of the NFT industry has reached $67.818 billion, and about 50,000 NFT traders participate in transactions on the chain every day. A figure of $67.818 billion might not seem like much, but what if I told you that a year ago it was only $1.3 billion? In just one year, the cumulative transaction volume of NFT has increased by nearly 50 times.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

(Data source:

(2) Three stages of NFT exchange competition

In such a fast-growing ecosystem, the participants in the ecosystem are also highly competitive. The current competitive state of NFT exchanges is very similar to the DEX competition state of DeFi Summer.

In the first stage, each public chain will have its own NFT exchange, such as Opensea on ETH, Magic Eden on Solana, and Treasureland on BSC.

In the second stage, starting with ether, each public chain will have an endless stream of imitation disks and challengers appearing to compete with leading products. In DeFi, Sushiswap challenges Uniswap; in NFT exchanges, Looksrare and X2Y2 challenge Opensea.

In the third stage, the product that finally wins in the respective public chain will enter other public chains. For example, Uniswap extends Polygon, and Opensea is also compatible with Solona.

(3) The competitive landscape on Ethereum

From the statistics in the above figure, it is not difficult to see that Ethereum is the main battlefield for NFT transactions. I think Ethereum will still be the main battleground for NFT exchanges in the short term. Therefore, the following analysis will mainly focus on the Ethereum chain.

At present, there are mainly three NFT exchanges on the Ethereum chain: Opensea, Looksrare and X2Y2. The average share of transaction volume in the past month is 85%, 6% and 9% respectively (excluding brush volume). In fact, the share of each company will be a little lower than the above data, because only these three companies are counted here, but the transaction volume of other NFT exchanges on Ethereum is completely different from the above-mentioned ones, so there is no need to discuss it. . It is not difficult to see from the chart that the appearance of Looksrare and X2Y2 has indeed seized part of the market of Opensea, but the overall situation is still the dominance of Opensea, and the advantage of Opensea will be difficult to shake in the short term.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

(Data source:

2. Competitive development route of NFT trading platforms

Both Looksrare and X2Y2 were born in early 2022, just as the market started a crusade against Opensea. The reason is that at the beginning of the year, Opensea completed a round of financing at a valuation of 13.3 billion US dollars, and then its CFO’s remarks were similar to Opensea’s plan to go public, which angered many blockchain users who participated in Opensea transactions due to airdrop expectations. Users felt backstabbed by Opensea. After that buzzy crusade came projects like OpenDAO, Looksrare, and X2Y2. Under the banner of “For the people, by the people”, they attract users by issuing airdrops to early Opensea users, and continue to attract users to participate in transactions by staking tokens for transaction fees, transaction mining, pending order rewards, etc. , and finally grabbed a little market share from Opensea.

(1) Transaction mining incentives

1. Transaction mining incentive is the most direct and effective way to increase the transaction volume of the platform

Transaction mining is to use platform tokens to reward transactions. In order to obtain platform token rewards, users will continue to trade on the platform. The cost of user transactions is mainly composed of two parts: transaction fee (platform fee + creator fee) and Gas Fee. As long as the cost is lower than the transaction incentive, there is room for arbitrage, and arbitrageurs will keep brushing until the room for arbitrage disappears.

The effect of transaction mining is very good. After Looksrare launched transaction mining in January, the transaction volume soared, surpassing Opensea for a time.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

(Data source:

It is easy to form a positive flywheel in the initial stage of transaction mining. After the transaction mining is started, the transaction volume of the platform will increase significantly, so the platform fee will soar, and the fee will be 100% captured by the token pledge user. , the increase in token price is caused by the increase in the incentive of transaction mining, so arbitrageurs are willing to brush more volume to earn transaction mining incentives, thus forming a positive cycle. Of course, this cycle in turn is a death spiral. After April, the market share of Looksrare has dropped significantly. Aside from macro factors, another core reason is that its transaction mining reward is halved, which makes both transaction volume and currency price. fell.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

X2Y2 also obviously found that transaction mining is an important means to increase transaction volume in the short term. In April 2022, X2Y2 canceled its own innovative pending order rewards and shifted to transaction mining rewards similar to Looksrare. It can be seen that the transaction volume of X2Y2 before April is almost negligible compared with that after adopting transaction mining.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

(X2Y2 historical transaction volume data data source: Dappradar)

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

2. NFT transaction mining rewards are a means of acquiring customers, not a moat

Transaction mining incentives were first used in the DeFi field, and dYdX is the best among them, but transaction mining in contract transactions helps to improve liquidity and allow prices to be fully discovered. On the one hand, the participants of transaction mining conduct mining arbitrage, and on the other hand, they also contribute liquidity to the platform and become the counterparty of real traders. In NFT transaction mining, the miners’ transaction methods are mostly left-handed and right-handed transactions between the two wallets, which did not contribute to the liquidity of NFTs.

NFT transaction mining can be divided into two stages: in the first stage, there are a large number of participants, and users actively participate in transactions to obtain rewards; in the second stage, giant whales flood in, and several giant whale accounts conduct several transactions of NFTs with inflated prices every day Trading squeezes retail trading mining space.

In the first stage, because the transaction mining incentive has just started, many new users can be attracted to experience the product, similar to the “ten billion subsidy” and “10% off coffee” activities in the Internet. If the product has a good user experience, then There is an opportunity to keep new users and achieve a cold start of the project. At this stage, not only the trading volume of the platform will increase, but also real trading users will be attracted.

In the second stage, when the giant whale finds that the incentive for transaction mining is short-term sustainable and safe, the giant whale will participate in transaction mining. The way the giant whale participates in mining is to choose an NFT without Creator Fees , then set the pending order price to thousands of ETH, and then buy and sell several times with the left hand and the right hand to complete the transaction mining. This process not only does not provide liquidity for NFTs, but also squeezes the enthusiasm of retail traders to participate. At this stage, the core function of transaction mining is to maintain the most basic platform NFT transaction volume data and provide stable ETH cash flow for users who pledge to mine.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

In the second stage of transaction mining, the essence is that the protocol party sells the tokens unlocked every day in exchange for ETH and then distributes it to the current token pledgers in proportion. At this stage, transaction mining has been unable to absorb too many new users for the platform, but through the first stage of customer acquisition, the platform has accumulated some users and established a certain market reputation, the second stage of transaction mining can The platform’s business data is maintained at a relatively “beautiful” level.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

This stage is not only a stage of boiling frogs in warm water, but also a stage of low-key construction by the exchange project side. At this stage, even if the project party does nothing, the platform data can be maintained at the previous level, but this is actually a false prosperity. At this stage, both the investors and the project party themselves should focus on the simple transaction. The share turns to the growth of the real number of users, and the user’s product experience feedback. From another point of view, the project side does not have much performance pressure at this stage, and the platform data can basically cope with investors, so it is also a good time to calm down and polish the product.

The duration of this stage mainly depends on the design of transaction mining incentives. The day when the incentives drop is the day when the second stage ends. The second stage of Looksrare obviously ended in mid-May this year. Transaction mining After the reward was halved, the trading volume of the platform dropped rapidly, resulting in a drop in pledge income, which in turn led to a drop in the price of the currency, realizing the “Davis Double Click”.

When the frog was about to be boiled to death, Looksrare seemed to realize that it was the frog swimming in warm water, so users who have been paying attention to Looksrare recently will find that they have finally started iterative optimization of their products and launched some new features that are quite sincere . But obviously they missed the golden period of optimizing their product, and the best way to stop the death spiral is not to start it. As for X2Y2, its transaction mining will last for 2 years, and the reward is always constant, so the cycle of the second stage will be longer, can you make good use of this time, polish the product, improve the user experience, and try your best to Capturing more traffic and users is the key to the future development of X2Y2.

In general, transaction mining incentives cannot be generalized in the blockchain industry. DeFi transaction mining can bring much more value to the project than NFT transaction mining. Therefore, if you want to develop NFT exchanges in the long run, you must not regard transaction mining as your own moat, because after transaction mining enters the second stage, the source of income mainly comes from the sale of newly unlocked tokens, which is not sustainable in the long term. Transaction mining incentives can attract many real users in the early stage, but it is by no means a moat that a project can sit back and make money.

(2) Incentives for pending orders

Listing Reward means that NFT holders can list the best-selling NFTs at a reasonable price on the platform. Even if the NFTs are not sold, they can get the listing rewards.

1. Change path of exchange incentives

Regarding the pending order reward, the competitive path between Looksrare and X2Y2 is particularly interesting

Looksrare: Transaction Mining → Transaction Mining + Pending Order Rewards

Looksrare started transaction mining at the beginning of its launch on January 11, and then changed its incentive strategy on April 20, allocating part of the original transaction mining revenue to pending order rewards.

X2Y2: Pending Order Rewards → Transaction Mining

When X2Y2 was launched on February 15th, it innovatively proposed a pending order reward. Due to some loopholes in the rules set at the beginning of the launch, the promotion of NFT transactions was not obvious. After a series of corrections, X2Y2 was launched on April 1st. The pending order reward is canceled, and the revenue originally allocated to the pending order reward is allocated to transaction mining.

2. Is the pending order reward effective?

The logic of the pending order reward is that NFT holders are encouraged to list NFTs on the platform through the pending order reward. When a mall has a variety of products, shoppers will of course be attracted to the mall for shopping.

First of all, confirm that the main purpose of the platform’s various incentives is to increase the number of users and thus promote the transaction volume. Therefore, it is most intuitive to see whether the transaction volume is effective or not, or go back to the chart of the historical transaction volume of X2Y2. You will find that the transaction volume of the platform is very low when the platform adopts the mechanism of pending order reward.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

(X2Y2 historical transaction volume data data source: Dappradar)

The reason is that we divide the users who participate in the pending order reward into two categories.

One type is users who really need to sell NFTs. The core demand of such users is to sell NFTs at the price they want as soon as possible, so he will not only hang NFTs on X2Y2 or Looksrare because there is a pending order reward. For these two exchanges, he will definitely place orders on Opensea at the same time. Then, because of Opensea’s traffic, his pending orders are likely to be filled in Opensea (this has been improved after the aggregator appeared, which will be described in detail below), so X2Y2 and Looksrare gave the pending order rewards in vain, but did not promote the transaction volume. At the same time, because the core demand of users is to sell NFTs as soon as possible, the time to place an order will not be very long, so the corresponding reward will not be very high. For some users who are not price sensitive, even if they know that a certain platform has a pending order reward, it may be It will only choose to place orders on Opensea.

The other type is users who do not want to sell NFTs, but want to obtain profits through pending orders. The core demands of these users are: (1) NFT will not be bought by others (2) The longer the time to place the order, the better.

In order to restrict these users from digging wool, the platform will design a series of rules. For example, the pending order price must not exceed a certain percentage of the floor price. For example, only the series with a transaction volume exceeding a certain amount can get the pending order reward. Under such rules, speculators’ practice is to hang a maximum price within the specified range to ensure that their NFTs will not be bought. This does increase the number of NFT pending orders on the platform, but the promotion of transactions is not obvious.

Seeing this, you may wonder, since the reward for pending orders is not very good, why does Looksrare adjust its incentive model and switch to reward for pending orders? This question will be answered later.

(3) Competition for transaction fees

There are two main handling fees in NFT transactions, one is the transaction fee charged by the exchange, hereinafter referred to as “transaction fee”, and the other is the creator fee (Creator Fee) charged by the NFT creator. It should be noted that there is no one-stop agreement for the setting of the creator’s fee collection ratio, that is to say, the creator cannot set it once and it is universal to the whole platform. Often, for some new exchanges, the creator needs to go to the The other party’s website is set, otherwise it cannot be charged.

Any fully competitive market will have a price war, and the price war of NFT exchanges revolves around the above two fees.

1. Transaction fee price war

Let’s talk about transaction fees first. As a leading exchange with a monopoly position, Opensea charges the highest transaction fee of 2.5% in the industry, and basically sets a fee cap for latecomers. Both X2Y2 set lower transaction fees to compete for the market, and there are many exchanges like Alienswap in the market who joined the price war under the banner of 0% transaction fees.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

There is a very interesting phenomenon here. Even though other platforms have obvious price advantages over Opensea, they have not grabbed too much market share.

A simple concept is introduced here called Switching Cost, to the effect that what is the implicit cost of users transferring from using product A to using product B.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

For users of NFT exchanges, the migration cost is extremely low, and the learning cost of the new platform is also very low, because the front-end pages of different exchanges are very different. So theoretically, when the fee of one exchange is one-fifth of the other, rational traders will choose to trade on exchanges with low fees. Especially with the emergence of aggregators like Gem, after solving the traffic entry problem of small exchanges, the rate advantage will become more obvious. But now there is a huge difference between theory and practice, so what is the problem?

One of the reasons must be poor information. Many traders do not know that there is a low-cost exchange, and naturally they will not run to trade.

The deeper reason is that in the current NFT trading market, a large number of traders are not price sensitive. Under the high volatility of the price of NFT itself, the 1%-2% handling fee is not so intuitive, because there are “doubling the cost” and “returning to zero overnight” everywhere. In the face of such gains and losses, the big Most people don’t care about the difference in fees.

However, NFT traders will not always maintain low price sensitivity. Now everyone is not sensitive to fees. On the one hand, they think that the NFT price itself fluctuates violently as mentioned above. High price fluctuations make the fees less important. On the other hand, because NFT is now mainly focused on PFP, it is more like the field of art. Traditional art auction houses like Christie’s charge commission fees ranging from 10% to 20%. In contrast, NFT exchanges charge 2% is not so high.

With the development of the market, traders gradually mature, and traders will gradually realize that the transaction fee of 2% is so unbearable. It is necessary to know that the transaction fee of traditional stock investment is about 3/10,000. At the same time, with the rise of GameFi, the transaction category of NFT may change from pure PFP to NFT in GameFi. At this time, NFT is not just an avatar artwork, it is a production material, and the fluctuation of every transaction fee will As a result, the return period of investors will become longer, and the advantages of low-fee exchanges will gradually increase.

In general, I think the price war on NFT exchanges will intensify. Even a giant like Opensea, which is close to a monopoly, will reduce its handling fee. You must know that Opensea’s single handling fee income is about 600 million US dollars a year. The extremely profitable industry will inevitably flood into a large number of competitors. If Opensea continues to maintain a transaction fee of 2.5%, the price advantage of low-fee exchanges will gradually expand.

2. Creator fees

If the price war of transaction fees is a clear-cut competition, then the creator fee is a dark area. The creator fee is usually set from 0%-10%. As mentioned earlier, this fee requires the creator to go to the platform to manually set it, so there is a loophole that is not considered a loophole. Most creators will only set a creator fee on Opensea, and for some newer, smaller NFT exchanges, for various reasons, creators do not set a fee. This also leads to that for many NFTs, if NFT sellers sell NFTs on X2Y2 or Looksrare, they will receive about 10% more money than they receive on Opensea. So many times you will find that the same NFT may have a higher order price in Opensea, because only Opensea charges creator fees.

The main reason for the dark zone is that no exchange dares to publicly publicize its NFT transactions through official channels without charging creator fees (because this obviously damages the rights and interests of creators), but not charging creator fees in private has become a problem. important propaganda tool. Of course, NFT exchanges do not dare to commit public anger. Generally, creators who take the initiative to go to the platform to set up fees will get the cooperation of the exchange.

Therefore, the price war in terms of creator fees is only applicable to the initial use of small exchanges. If the NFT exchange has the opportunity to achieve a certain scale, the creators will naturally know that there is such a place that he needs to do something. In the future, with the update of some underlying protocols, it may be possible for creators to set up creator revenue sharing at the NFT level. Then the advantages of small exchanges in this regard no longer exist.

3. The battle for the front end of the trading platform – the aggregator

As Opensea’s competitors emerged, a new product emerged, the NFT transaction aggregator. NFT transaction aggregators headed by Gem and Genie quickly seized the entrance of NFT transactions with their almost crushing front-end product experience.

Take Gem as an example to briefly introduce the transaction aggregator. is an NFT exchange aggregator. Gem itself does not provide NFT pending orders and trading services. Gem integrates pending orders from Opensea, Looksrare, X2Y2 and many other NFT exchanges. , find a series of NFTs on Gem, it will show you all the pending orders of the series of NFTs on different exchanges, and also has a shopping cart function, you can buy NFTs in bulk to save gas fees.

The reason why Gem is popular is very simple, because it is very easy to use and very Crypto Native. You can feel that the product manager of Gem must be a senior player of NFT, because every iteration of their functions can poke the pain points of users.

This phenomenon is actually a manifestation of the gradual maturity of the industry. In the past two or three years, the core logic of the blockchain industry is whether users or investors can make money. Users do not care about user experience very much. A product The quality of the currency is mostly linked to its currency price. The rise of products like Gem means that Web3 users are more and more concerned about the user experience.

If we take a longer view, when products such as Gem have accumulated a large number of users, NFT exchanges such as Opensea, Looks, and X2Y2 may become a pure back-end product of Gem. One day in the future, You buy an NFT or conduct a token transaction on a popular front-end APP. The underlying logic behind it may go through some NFT exchanges or DeFi protocols, but for users, they do not need to know at all.

Having said that, back to the NFT exchange, it can be said that Looksrare and X2Y2 are now able to grab a piece of the cake Gem from Opensea. Gem provides a lot of traffic for these small exchanges. As long as there are pending orders on small exchanges and the price of the pending orders has an advantage, it can be discovered and traded by traders. The traffic problem that plagued small exchanges seems to have been solved.

This is also the reason why Looksrare still chooses to launch the pending order reward model when X2Y2 has verified that the drainage effect of the pending order reward is normal. Because of the emergence of aggregators such as Gem and Genie, the pain point of small exchanges lacking traffic has been solved. Before that, NFT exchanges must not only ensure that there are enough pending orders or sellers on the platform, but also need to find enough buyers to shop on the platform . With the emergence of aggregators, the platform does not need to find buyers, but only needs to maintain sellers, so that more and more sellers are willing to come to the platform to place orders at reasonable prices. Gem can help solve buyers’ problems, which may also be a change in Looksrare. The main reason for the incentive strategy.

Fourth, what is the core competitiveness of the NFT trading platform

(1) Pending order volume (liquidity)

There is nothing new under the sun. In this era when everyone has Internet thinking, no one can ignore the importance of traffic. Here we disassemble the traffic of NFT exchanges into two parts: buyer traffic and seller traffic

1. Buyer traffic

Many people say that there is a new solution for Web3 traffic. For example, the solution for NFT transactions is the aggregator. The emergence of aggregation platforms like Gem solves the problem of buyer traffic for small exchanges. It seems that the NFT trading platform does not need to consider whether anyone will buy NFT, because as long as the platform has NFT pending orders, the aggregators will put the pending orders on the shelves.

Aggregators seem to be the saviors of small NFT exchanges. But do NFT exchanges really no longer need to have their own buyer traffic?

The premise of all this is that Gem can always remain neutral and not abuse its bargaining power after controlling traffic. This is like when Meituan and are fighting a price war and almost completely eating the market share. The next step is to Use your own bargaining power to collect returns from platform merchants. Capital is profit-seeking. If any exchange thinks that it can make money all the time with the support of the aggregator, then this must be the first exchange to be eliminated.

It can be said that the premise of the emergence of NFT transaction aggregators is that there are multiple exchanges in the market, and small exchanges can gain a firm foothold in the market without the traffic provided by the aggregators. The two are complementary. But once this honeymoon period is over, I believe that the next step must be aggregators to jointly hunt and kill disobedient exchanges. Not to mention, Gem, now the largest aggregator on the market, has been acquired by Opensea. When your biggest traffic entry is the younger brother of your biggest competitor, you’d better not expect that you can always rely on this product to maintain traffic.

2. Seller traffic

If buyer traffic can still rely on aggregators, then seller traffic is the core competition point of NFT exchanges. After all, Gem and Genie do not dare to do evil on a large scale. In theory, as long as there are enough reasonable prices to place orders, NFT’s Trading volume will not be bad.

Apparently, Looksrare recognized this day in time in April and began to implement a pending order incentive to attract NFT sellers to place orders on the platform. Although X2Y2 canceled the pending order incentive, it launched an incentive activity of 0% transaction fee in April, and has maintained a 0.5% transaction fee in the following months. Here is a popular science, the transaction fee is usually charged to the seller. That is to say, usually the buyer doesn’t care what the transaction fee is, because the price he pays is the price he sees. Sellers are more sensitive to transaction fees. Therefore, whether it is the incentive to place orders or the reduction of transaction fees, they all belong to the seller’s profit.

In addition to selling profits from sellers, actively promoting and cooperating with NFT project parties and keeping up with real-time hotspots are also important channels for accumulating seller traffic. From “Ganbai” some time ago to “Free Mint” now, hotspots in the NFT market continue to emerge, and NFT speculators are constantly chasing hotspots in the market. If the exchange can actively cooperate with the project party, let the project party cooperate and guide, and let NFT holders go to a specific exchange to place orders, if there is an explosion, it can play a big role in drainage.

3. Buying and selling homologous

A big difference between the NFT trading platform and the traditional e-commerce platform is that the NFT exchange is the same source of buying and selling, which means that a user may log on the website last time to buy NFT, and the next time he comes again, he may will be a seller. This is one of the reasons why the importance of buyer traffic is emphasized earlier. If all the buyers on the platform come from aggregators, how can you expect them to choose you when they choose to sell NFTs.

(2) User experience (product iteration capability)

Product experience is a very important moat in Web2, but in Web3 or more narrowly, the blockchain industry is not so important. When I used Curve for the first time, I thought I was back in the era when the village was just connected to the Internet.

The last wave of the currency circle was DeFi. In that round of narrative, the quality of a project or product mainly depends on whether it can bring users to make money. If you can make money, it is a good project. Even if your front end is as bad as Curve, you can’t. No matter how good the front-end experience of a profitable project is, it is useless.

The emergence of products like Gem indicates that the next round of Web3 narrative logic will return to the level of product experience, because no matter how good the protocol and the best underlying infrastructure construction are, it must be implemented at the user level. Someone needs to use it.

The competitive situation in the next stage of the blockchain industry may be that some projects have worked hard to write contracts to make products, and then they will be “marriage dolls” by an aggregated product with excellent user experience, beautiful front-end design, and strong product iteration ability, and then in the division. Cut off the largest piece of the cake. In fact, this has already begun to appear from the CVX nesting doll some time ago.

From the beginning of Crypto Kittiy to today, NFT has entered a stage of rapid development, with new hotspots, new narrative logic, and new demands being born every day. Since the development resources of the project party are limited, it is necessary for the project party to have a keen sense of smell to discover what are the long-term real needs, and consider the ROI behind each new function iteration, so as to convert the product iteration capability into a good one. Product user experience, this is the real moat of a project.

Taking Gem as an example, under the boom of Free Mint, Gem developed a ranking database of Mint data, and directly provided the function of one-click mint on Gem’s official website, which solved the pain points of users who dare not mint NFT and collect data at will. This is only a small fraction of its recent updates, but you can see how a great product can use its own development capabilities to iterate on the product. And Opensea, which acquired Gem, also recently launched its own Seaport protocol, and updated its ever-changing front-end page to launch several small functions that should have existed for a long time. First-mover advantage is critical, but positive and correct product iteration is the key to maintaining dominance.

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

Due to the composability and decentralization of the blockchain, the moat theory of Web2 will not work. The competition in the Web3 industry will be more intense than that of Web2, because the so-called moat is not believed here, and the low cost brought by Web3 Even zero migration cost allows users to choose their own and favorite products more freely. If they want to retain users, the project party must remain vigilant and constantly iterate products, understand users, and meet user needs in order to win in the industry. .

Comprehensive interpretation of the competitive landscape of NFT trading platforms: what is the core competitiveness?

(3) Social attributes

Whoever can build the NFT community into the NFT exchange will get the biggest moat.

The social value of NFT has not been captured by NFT exchanges. The NFT community is mainly concentrated on Discord, and the announcement of the project party is mainly distributed through Twitter and Discord. The experience of NFT users is fragmented.

Imagine if there is an NFT exchange with a built-in function similar to Discord. After clicking on an NFT Collection, users can see the daily updates and announcements of the project party. After purchasing NFT, they can automatically obtain an identity in the community. To verify again, the left side of the computer screen is the price trend of NFT, and the right side is the chat box within the community. Of course, this is just my initial assumption, and the future product model is not the focus of today’s discussion.

Why is it said that the built-in community is the biggest moat, because in Web3 assets belong to users, NFTs held by users can be listed on any exchange, and the migration cost is almost zero, users can trade on Exchange A today, and they can go there tomorrow B Exchange. NFT can be migrated but the community cannot. Even if users buy NFT on other platforms, they will eventually return to the NFT exchange with the community. So the moat was formed. Coinbase emphasized the social nature of NFT when it launched the NFT market this year, but at that time it only stayed at the level of mutual attention between users and users, and did not pay attention to the construction of the NFT community, but it is undoubtedly the NFT exchange to capture the NFT social network. Worth a try.


One of the reasons for writing this article is that I think the future prospects of the NFT market are far more than that. At this point in time, we will feel that Opensea’s position is almost unshakable, but if we extend the time to three to five years, maybe Five years later, yet another batch of NFT exchanges are competing in this market. Imagine the changes in the competitive landscape of currency exchanges in the past ten years. The one I mentioned above may not be just a horror story, so I tried to find some successful points of the exchange to verify my investment logic, but after writing it, I always I feel a little mean.

Another reason is because I really like the token model of Looksrare and X2Y2. Traditional financial practitioners always have a favorable view of projects that can provide stable cash flow. Friends who follow me should know that I have been following NFT exchanges. The reason is also very simple. If Changpeng Zhao came to you ten years ago with a white paper and asked you if you wanted to invest in Binance, would you vote? I didn’t dare at that time. If I gave you the ability to go back to the past, would you still refuse it? Of course, it is more likely that Changpeng Zhao did not vote for Sun Que.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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