The NFT trading boom started in the second half of 2020 and continues to this day. The NFT transaction volume last year was US$17.69 billion, and the NFT transaction volume in the first quarter of this year has reached US$26 billion, exceeding the total of last year.
Among the NFT trading platforms, OpenSea is the largest contributor to NFT trading volume. The trading volume of OpenSea last year was about 15 billion US dollars, accounting for 84.8% of the total annual volume.
Although OpenSea was challenged by competitors such as LooksRare, Rarible, and Magic Eden this year, the transaction volume of OpenSea in January and February this year still reached US$4.98 billion and US$3.58 billion respectively, both higher than last year’s highest monthly transaction volume.
At present, the NFT trading platform generally presents the following trends: multi-chain development, function aggregation, NFT+SocialFi, and NFT liquidity improvement.
Multi-chain development: Although NFT transactions are currently concentrated on the Ethereum chain, NFT trading platforms with a certain transaction volume have also appeared on public chains such as Solana, Flow, Polygon, WAX, and BSC, occupying a certain market share. Some NFT trading platforms choose to deploy on multiple public chains to expand user groups.
Function aggregation: The NFT trading platform has added functions such as NFT project data, NFT project forecast, and batch transactions in addition to the transaction function, providing users with one-stop NFT services, and continuously adding new functions according to user needs.
NFT+SocialFi: The NFT trading platform builds a bridge between creators and fans. Creators release NFT, spread it through Web3 social applications, and use NFT as a link to form an NFT fan community.
NFT liquidity improvement: NFT financial applications such as fragmented NFT trading, NFT liquidity mining, and NFT mortgage lending are aggregated with NFT trading platforms, and an NFT trading platform with NFT liquidity solutions has emerged.
The development of the NFT trading platform is of great significance to the entire NFT industry. As a place for the presentation and trading of NFT projects, the self-optimization of the NFT trading platform brings project parties, creators, buyers and sellers closer together to promote the benign nature of the NFT industry. developing.
The overall situation of NFT transactions
Total amount of NFT transactions
- Transaction volume overview
Since last year, the NFT market has ushered in a blowout growth. According to data released by NonFungible.com, the NFT transaction volume reached $17.69 billion last year, a year-on-year increase of 21,350%. The number of buyers reached 2.301 million, a year-on-year increase of 2,962%, and the number of sellers reached 1.19 million, a year-on-year increase of 3,669%.
The popularity of NFT transactions has continued unabated this year. The NFT transaction volume in the first quarter of this year has exceeded the transaction volume in the whole of last year. As of March 24, this year’s NFT transaction volume reached $26 billion, an increase of about 47% over last year’s full-year transaction volume.
- Public chain transaction performance
Ethereum is the blockchain with the largest NFT transaction volume. As of March 24, the NFT transaction volume on the Ethereum chain reached $20.6 billion, five times that of the second-placed Ronin chain.
The public chain competition in the NFT industry is in a trend of coexistence. There are 7 public chains whose NFT transaction volume has exceeded 100 million US dollars, namely Ethereum, Ronin, Solana, Flow, Polygon, WAX and Avalanche. Among them, Ronin, Flow and WAX are public chains built for NFTs.
These three public chains built for NFT ranked the top three of all public chains in terms of NFT transactions, Flow ranked first with 18.627 million transactions, and WAX and Ronin ranked second and third respectively.
Transaction volume of top NFT projects
As of March 24, the transaction volume of five NFT projects exceeded $1 billion, namely Axie Infinity ($4.03 billion), CryptoPunks ($2.14 billion), Bored Ape Yacht Club ($1.55 billion), Art Blocks ($1.21 billion) billion), Mutant Ape Yacht Club ($1.05 billion).
Including these 5 projects, there are already 42 NFT projects whose transaction volume has exceeded $100 million.
The transaction volume of top NFT projects has increased significantly in the past week. Data on March 24th shows that among the top ten projects in terms of weekly transaction volume, 6 projects have increased by more than 100% month-on-month. The biggest gainer was Bored Ape Chemistry Club, which rose 538.18%.
Affected by the launch of ApeCoin, the trading volumes of Bored Ape Yacht Club and Mutant Ape Yacht Club were $107 million and $59.15 million respectively, far exceeding other NFT projects.
The overall situation of the NFT trading platform
Top NFT trading platform trading volume
DappRadar data shows that as of March 24, OpenSea’s total transaction volume was $23.5 billion, ranking first, and LooksRare ranked second with $18.16 billion. Magic Eden and Solanart, the two NFT trading platforms on the Solana chain, ranked third and fourth respectively.
OpenSea is the absolute overlord in the current NFT trading platform.
OpenSea hit a record monthly trading volume of $4.96 billion in January this year, and the highest three-month trading volume exceeded $3 billion each ($4.96 billion in January this year, $3.58 billion in February this year, and $3.42 billion in August last year).
In the past 7 days, OpenSea’s transaction volume has reached 630 million US dollars, ranking first.
LooksRare is a rising star in the NFT market and officially launched in January this year. After going online, relying on its transaction mining, the daily transaction volume once exceeded 800 million US dollars.
At present, its trading volume has gradually stabilized, with a trading volume of $500 million in the last seven days, second only to OpenSea.
The NFT trading platforms Magic Eden and Solanart on the Solana chain ranked third and fourth. The total transaction volume of Magic Eden and Solanart was US$736 million and US$636 million respectively, which was not the same as OpenSea and LooksRare on the Ethereum chain. level.
Features of NFT Trading Platform
- Creator’s online works
Creating and listing NFT works is the basic function of the NFT trading platform. Both project parties and ordinary users can create NFTs through the NFT trading platform and wait for buyers to buy them.
Taking OpenSea as an example, OpenSea will launch the “collectibles manager” function in 2020, users can freely create NFT works, and NFT works can be launched without gas fees.
The NFT trading platform can be understood as the Launchpad of the NFT project. New NFT projects are promoted through the NFT trading platform to expand the group of NFT holders.
Trading is the basic function of the NFT trading platform. Buyers can make quotations to sellers, and both parties can reach a transaction price. When the popularity of NFT projects is relatively high, sellers hope to sell NFTs at high prices within the acceptable range of the market. The rise in NFT transaction prices has led to an increase in NFT floor prices.
During the transaction process, the NFT trading platform will collect a certain transaction commission from it, and the creator can determine the royalty. Transaction costs mainly include platform transaction commissions, royalties, gas fees, etc.
- Transaction Aggregator Batch Transactions
The transaction aggregator supports users to purchase NFTs issued by all platforms. The transaction aggregators Genie and Gem have batch transaction functions. Users can purchase NFTs in batches from the market by setting a budget and the NFT items they want to purchase. A transaction contains multiple NFTs, which reduces transaction costs and the time cost of searching for NFTs.
- Platform token pledge
There are two main ways for users to pledge platform tokens. The first is a simple single-currency pledge. Taking LooksRare as an example, LOOKS token holders can obtain LOOKS or WETH rewards by staking LOOKS tokens. The second is Yield Farming, where token holders earn profits by providing liquidity to liquidity pools.
- social function
The NFT trading platform is a bridge between creators and fans. Creators with certain influence create accounts on the NFT trading platform and publish NFT works on the platform to attract fans to buy NFT works.
NFT works are very suitable for dissemination through social media. In the process of social media dissemination, the influence of NFT creators increases, and the fan community is gradually formed.
This year, there have been two financings of more than 100 million yuan related to NFT trading platforms, namely OpenSea’s $300 million Series C financing and Immutable X’s development team Immutable’s $200 million Series C financing.
Paradigm and Coatue are the leading investors in OpenSea’s current round of financing, while Immutable’s investors in this round of financing include Temasek and Tencent. From the investment lineup of these two financings, we can see that investment banks in the traditional financial world are paying attention to the NFT trading platform track.
Among the 68 NFT trading platforms sorted out, 29 NFT trading platforms have completed financing. In the investment lineup, investment institutions with high frequency include Paradigm, Animoca Brands, D1 Ventures, Spartan Group, LD Capital, Coinbase Ventures.
Among the 68 NFT trading platforms counted, 24 NFT trading platforms have more than 10,000 Discord members. Among them, OpenSea, Rarible and Magic Eden have more than 100,000 Discord members.
Discord is the most important community of NFT trading platforms. Rarible uses Discord as a platform for DAO governance. RARI token holders can become Discord members to participate in DAO governance, and participate in decision-making processes such as Rarible platform improvement and RARI economic model improvement.
The purpose of building a community for the NFT trading platform is to better listen to user feedback, facilitate contact with users, and provide users with better services, thereby enhancing the user stickiness of the platform.
Introduction of NFT Trading Platform
Comprehensive NFT trading platform
The functions of OpenSea include making and listing NFTs, trading NFTs, managing NFTs, and searching for NFT project transaction information.
Create NFT: At present, users can create NFT without gas fee and list NFT in a short period of time, accepting offers from buyers.
Trading NFT: Buyers and sellers finally determine the transaction intention and transaction price through repeated quotations.
Manage NFTs: Users connect their wallets and open an account in OpenSea, and then they can see the NFTs they hold and the current quotation in the account. Users can include NFTs in the “Like List”, and find the opportunity to buy according to the floor price and quotation of NFT projects.
Search for NFT project transaction information: The information includes transaction volume, floor price, NFT quantity and its holders. Users can query the transaction records and scarcity of specific NFTs.
OpenSea’s charging model is relatively clear. Each transaction charges a 2.5% transaction commission, which is the most direct source of revenue for OpenSea.
Rarible has roughly the same functions as OpenSea in producing and listing NFTs, trading NFTs, and managing NFTs. Rarible has certain features in NFT whale monitoring and DAO governance.
Rarible not only has a ranking of popular NFT projects on the homepage, but also sets a ranking of NFT buyer data, which is convenient for users to monitor which NFTs the NFT whales are buying recently and judge the current popularity of the NFT market.
RARI token is the governance token issued by Rarible, which is the biggest difference between Rarible and OpenSea. RARI holders can join Rarible DAO, participate in DAO governance, and use collective intelligence to promote Rarible development.
The Rarible team developed the Rarible Protocol to provide developers with open-source NFT tools, including NFT minting, NFT management, NFT liquidity, and more.
Rarible’s revenue stream is the same as OpenSea, and it charges a 2.5% transaction commission per transaction. Rarible requires creators to bear a certain NFT minting fee.
The functions of LooksRare include creating and listing NFTs, trading NFTs, trading mining, and staking LOOKS for income. Among them, trading mining and staking LOOKS to obtain income are the highlights of its attracting users.
Transaction mining: LooksRare official website shows that when users buy and sell NFTs on the platform, certain LOOKS rewards will be generated. These rewards will continue to accumulate and will be distributed to users every day. Take March 24 as an example, about 1.4 million LOOKS were distributed to traders as rewards on that day.
Pledge LOOKS to obtain income: Users who pledge LOOKS tokens can get rewards of LOOKS or WETH, and the APR displayed on the official website exceeds 170%.
LooksRare’s source of income is also transaction commissions, which charge 2% of each transaction.
NFT transaction aggregator
The most important function of Genie is batch transactions. Users can choose their favorite NFT projects, enter the quantity they want to buy, and then they can buy the expected number of NFTs in one transaction, and only need to pay a gas fee to complete the transaction.
In addition to saving gas fees, Genie aggregates all the purchasable content of this NFT project on the NFT trading platform, reducing the search cost for users.
As of now, the Genie platform does not charge transaction fees, and its source of revenue is unclear.
NFT Liquidity Protocol
Fractional is an agreement to release the liquidity of NFT assets. The specific method is as follows: users can lock NFT assets in the treasury of smart contracts, and then issue ERC20 tokens for trading.
Fractional has two types of stakeholders: buyers and curators.
Buyers: buy fragmented NFTs to gain access to these cultural assets;
Curator: Mint NFTs into fragmented ERC20 tokens through the protocol and earn income from them.
Unicly is a fragmented NFT protocol. Unicly allows users to encapsulate any number of NFTs into a “uToken”. uToken is an ERC20 token that can be used for trading. Users need to add liquidity to the uToken pool.
Unicly issues UNIC tokens, and UNIC tokens are distributed to uToken’s liquidity providers. Through liquidity mining, Unicly officially obtains platform revenue from fees.
Music NFT Trading Platform
The function of sound.xyz goes beyond NFT transactions, sound.xyz connects music creators and fans.
After NFT collectors purchase music NFTs, they can be displayed in the seating area below, which means that all users can see the purchaser information of this NFT and browse the music NFTs that these collectors have purchased.
Music NFT creators can post updates to show fans NFT release information and the mood of the release. Users can learn about the hottest music NFT producers, top music NFT collectors, and communicate with them through their Twitter accounts.
The Prospects of NFT Trading Platforms
The Importance of NFT Trading Platforms
- The NFT trading platform is the backbone of the NFT industry
NFT trading platforms are the bridge between creators and collectors, both of which need secondary markets. By constantly changing hands in the secondary market, NFT increases its transaction value, and the two gain additional benefits in the process. The current floor price is an important basis for determining the market value of NFTs. There are cases where the floor price of NFT projects has increased several times or even dozens of times after the launch.
Taking Azuki as an example, the floor price of Azuki has risen from less than 3ETH in early January to a recent high of 18ETH, and the floor price has increased by more than 500%.
The rapid rise in floor prices makes NFT holders want to sell NFTs at high prices. Faced with the ever-changing floor prices, the holding time of NFTs is gradually shortened, and the liquidity of NFTs in the secondary market is strengthened.
The data shows that the average holding time of NFTs has dropped from 156 days in 2020 to 48 days in 2021, and users hope to change hands at higher prices after holding NFTs.
- NFT trading platform provides users with more ways to play
NFT trading platforms tend to build functions around traders and communities.
The NFT trading platform has launched functions such as transaction mining, batch trading, token pledge, and fragmented NFT trading, which reduces the time cost and transaction cost of users, increases users’ additional income, and enhances the user stickiness of the platform.
OpenSea is like Uniswap in the NFT industry. If the functions are highly overlapping with OpenSea, it will be difficult for a homogeneous platform to gain market access under the background of the huge number of users of OpenSea.
This forces the NFT trading platform to launch functions with its own characteristics, combined with specific users and communities, to gain market share in differentiated competition. Healthy differentiated competition provides users with more options for playing and trading.
The development trend of NFT trading platform
The NFT trading platform currently has these development trends: increased number of functions, aggregated transactions, improved NFT liquidity, and socialized NFT transactions.
- Increased number of features
Users are no longer satisfied with the simple functions of creating and trading on the trading platform. If the trading platform has a single function, in order to meet the needs, users need to enter multiple NFT trading platforms, and switching trading platforms will reduce the user experience.
The NFT trading platform is adding a variety of functions that can enhance user stickiness (such as transaction mining, NFT pledge lending, etc.), and the NFT trading platform is developing towards a cross-chain, one-stop platform.
Among the top 20 NFT trading platforms with Twitter followers, the functions of NFT trading platforms include creating NFTs, trading NFTs, managing NFTs, DAO governance, Launchpad, liquidity mining, social networking, etc. NFT trading platforms are diversified. , The trend of differentiated competition has become more obvious.
- Aggregate transactions
The NFT transaction aggregator is convenient for users to “sweep goods” and is compatible with all platforms, allowing users to complete all operations on the NFT transaction aggregator, and the transaction aggregator only needs users to input information such as budget, quantity, target NFT project, etc. lower cost.
It can be seen from social media such as Twitter and Discord that NFT collectors have frequently used NFT transaction aggregators. Using the NFT transaction aggregator is more suitable for scavenging NFT projects with low floor prices, top projects, and room for growth.
- NFT liquidity
NFT liquidity is an important problem encountered in the development of the NFT industry. Through the NFT liquidity protocol, the form of ERC20 tokens is added to NFT to enhance the liquidity of NFT projects.
In addition to fragmenting NFTs, lending and liquidity mining are also important solutions to improve NFT liquidity, and these solutions are being integrated into NFT trading platforms.
Taking unicly as an example, the platform decomposes NFTs such as CryptoPunks and Loot into uTokens, establishes a liquidity pool, determines the price and market value of uTokens, and liquidity providers can trade NFT-related ERC20 tokens at certain prices. This is the most common NFT liquidity solution at present. Taking uPUNK as an example, the current market value of uPUNK is 13.913 million US dollars, the liquidity is over 1 million US dollars, and the popularity is relatively sufficient.
- Socialized NFT Trading
NFT is an important medium for connecting creators and fans. Creators pay more and more attention to the role of the fan economy and community. NFT creation and trading are accelerating the speed of social media dissemination.
At present, some cases of socialized NFT trading have appeared in encrypted art and music NFT trading platforms. In the future, NFT trading will be more combined with SocialFi. At present, the issuance of fan tokens in the SocialFi track is relatively mature, and the logic between NFT and fan tokens is the same. NFT can also become a medium for the fan community to prove their identity and enhance the interaction between stars and fans.
Taking the music NFT trading platform sound.xyz as an example, the music NFT creators who have settled on the platform can post news to show fans the NFT release information and the mood of the release. Users can learn about the hottest music NFT producers, top music NFT collectors, and communicate with them through their Twitter accounts.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/how-to-transform-and-upgrade-the-multi-chain-development-and-function-aggregation-nft-trading-platform/
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