Uniswap enters the NFT trading market and OpenSea faces the challenge

On July 7, Uniswap Labs solicited users’ opinions on NFT product functions on social media, which indicates that Uniswap’s NFT trading business has entered the countdown to the launch.

As the builder of Uniswap, Uniswap Labs acquired the NFT aggregation platform Genie in June, which was seen as a signal that it entered the NFT trading market. According to official information, starting this fall, users will be able to buy and sell NFTs on the Uniswap app, and the top decentralized exchange for crypto assets will also evolve into a comprehensive platform.

Although the Uniswap NFT trading product has not been launched yet, judging from Genie’s genes, it is likely to continue to improve the NFT trading experience with liquidity as the core. Before being recruited by Uniswap Labs, Genie has opened up NFT trading functions in OpenSea, Rarible, Coinbase and other markets, and has realized instant batch NFT cross-platform transactions with the help of liquidity protocols such as NFTX and NFT20.

The entry of Uniswap aroused OpenSea’s vigilance. In April of this year, the world’s largest NFT trading platform acquired Genie’s main competitor Gem, entering the aggregate trading track. In June, OpenSea released the decentralized NFT trading protocol Seapor, which supports users to freely build markets and flexibly combine assets for NFT exchange.

The birth of Seapor is more like an initiative of OpenSea to deal with the invasion of Uniswap. In the context of the competition for innovation of NFT trading products, the offensive and defensive battle between NFT trading platforms has officially started.

The Uniswap NFT trading function has entered the countdown to the launch

“What NFT functions would you like to see Uniswap build?” On July 7, when Uniswap Labs asked this question on its official Twitter, people realized that Uniswap’s NFT trading business would come soon.

Uniswap has already signaled its entry into the NFT market.

In late June, Uniswap Labs announced the acquisition of Genie, an NFT aggregation platform. Although the team claims that the acquisition has no impact on the Uniswap protocol, governance or UNI tokens, this does not prevent people from raising expectations for Uniswap. A few days after the announcement of the acquisition, UNI quickly started to rise from $3.5. As of July 10, UNI was quoted at $6.23, a half-month increase of 78%.

Starting this fall, users will be able to buy and sell NFTs directly on the Uniswap app, according to information released by Uniswap Labs at the time. Additionally, the program will integrate NFTs into developer APIs and widgets, making Uniswap a comprehensive platform for Web3 users and builders.

Supporting NFT transactions is not difficult for Uniswap, which acquired Genie. However, the current NFT trading market already has OpenSea as the benchmark, and many imitators such as LooksRare and X2Y2 have been born. The outside world is curious about what kind of NFT trading experience Uniswap, which has always been ingenious in product development, can bring.

To explore this, we have to find the answer in the genes of Uniswap and Genie.

Unsiwap is the originator of the AMM (Automated Market Maker) trading mechanism, which supports all users in the market to add liquidity to the trading pairs of encrypted assets to achieve instant trading with low slippage. Genie can be regarded as the “1inch” in the NFT trading market. The platform mainly features NFT bulk sales and purchase functions. Users can purchase up to 60 NFTs from multiple markets in a single transaction, thereby reducing users’ exposure to high-frequency trading. Frictional costs such as gas fees.

Before being recruited by Uniswap Labs, Genie has opened up multiple NFT trading markets such as OpenSea, Rarible, and Coinbase, and released the Genie List, an NFT listing function, allowing users to place orders in multiple NFT markets to sell a variety of NFTs with one click. Its transaction page is similar to Uniswap: the home page provides the Genie Sweep function, and the overall interface is very simple. The left side is the payment box, and the right side is the receiving box. After the user enters the amount of ETH to pay, the system will automatically match the NFTs that can be purchased in batches. .

Uniswap enters the NFT trading market and OpenSea faces the challenge

Genie official website page

You must know that NFT has the particularity of non-homogenization, and its liquidity cannot be compared with ERC-20-type homogenized tokens. In general, users can buy NFTs in bulk, but it is difficult to sell NFTs in bulk. Genie’s realization of this mainly relies on NFT’s liquidity protocols NFTX and NFT20. These protocols are somewhat similar to Uniswap’s liquidity pool, and have access to several blue-chip NFT series such as CryptoPunks, CryptoKitties, Axie Infinity, Avastars, etc., which has improved to a certain extent. Liquidity in the NFT market.

Genetic fit is the main reason for Uniswap to acquire Genie. Both of them focus on achieving a lightweight trading experience through liquidity aggregation. Therefore, Uniswap’s NFT business line has whetted the appetite of the outside world. What is certain is that it will bring product features that are completely different from OpenSea.

When Unsiwap Labs solicited functional suggestions, many users expressed their expectation for Uniswap to launch “NFT’s AMM”. In the eyes of people, for blue-chip projects with better liquidity, it is achievable to create NFT liquidity pools. Others have raised expectations that Uniswap can realize NFT cross-chain transactions through the cross-chain bridge. For example, users can directly exchange NFTs in the Ethereum network with NFTs on the Solana chain. If this function is implemented, it is equivalent to opening up the NFT market on each chain, which will bring a more convenient trading experience.

The NFT trading platform starts the product offensive and defensive war

For NFT trading platforms, the “invasion” of Uniswap is likely to change the current market landscape. After all, before Uniswap was born, people would not have imagined that a decentralized application without an order book could compete with deep-rooted centralized platforms such as Binance and Coinbase in terms of transaction depth, but Uniswap did it.

Looking at the current NFT trading market, the top trading volume rankings are OpenSea, LooksRare, and X2Y2 platforms with order book models. From the product level, there is no essential difference between these platforms. Usually, sellers sell NFTs through pending orders, while buyers check market orders and make selective purchases. And OpenSea can become a recognized leader among these platforms, and the traffic moat built due to its early entry is an important reason.

Uniswap enters the NFT trading market and OpenSea faces the challenge

Current NFT trading platform trading volume rankings

Until Uniswap comes, the war on NFT platform 1.0 will probably come to an end. Uniswap, which has always conquered users with its “small and beautiful” product features, will attack OpenSea from the bottom of the product.

On July 5, Scott, the founder of Genie and the current head of Uniswap NFT products, tweeted that according to the roadmap, the first step is to start the “core foundation” of Uniswap NFT.

He didn’t explain too much what the “core foundation” was, but he emphasized that markets should be built with customized experiences, rather than copy-pasting application components, and it only makes sense for a small collection of NFTs to have their own marketplace. The remarks are thought-provoking, and some people speculate that Uniswap may establish a customized trading market for some blue-chip NFT projects with a large user base.

On July 9th, Scott revealed more details. He said that the Uniswap NFT transaction list will be live-streamed, and the feature will be architected, built, and battle tested for three months. “Live Streaming” means that whenever a new NFT is listed, users can see it for the first time without having to sift through the collection to retrieve it.

Although the current Uniswap NFT trading platform is still “half-covered”, the offensive and defensive battle between the trading platforms has already started, and the challenged did not adopt the “wait and see” strategy and began to take the initiative.

In April of this year, OpenSea also completed an acquisition, which was Genie’s main competitor Gem. Gem is also a decentralized aggregator for the NFT market, with even higher transaction volume and user numbers than Genie, which was born earlier. According to OpenSea, the acquisition is “the future of the investment professional community.” But the acquisition is widely seen as a defensive takeover by OpenSea to prevent the aggregator NFT platform from cutting its own pie.

As of now, Gem still operates independently of OpenSea, and the two have not produced a product-level combination. However, after Uniswap’s high-profile entry into the NFT field, OpenSea quickly launched another product, the Seaport Protocol.

If the acquisition of Gem is OpenSea’s defensive strategy, the launch of Seaport is its proactive attack. Compared with OpenSea, which has been criticized as “centralized”, Seapor is an open source decentralized protocol, and anyone can build an NFT market based on the Seaport protocol.

In terms of product functions, Seaport supports users to bundle different assets to trade NFTs. For example, when a user owns Doodle NFT worth 40 ETH and wants to trade BAYC NFT worth 100 ETH, he can use a Doodle NFT and 60 ETH to combine bids to buy BAYC NFT. This flexible combination and exchange method can greatly improve the transaction efficiency of NFT assets.

Seaport also provides the SudoSwap tool to facilitate users to trade NFTs through “barter”. In addition, the protocol allows for the creation of Dutch auctions of NFTs, where users can set a start and end price, the duration of the auction, and then follow the mechanism of lowering or raising the price until a buyer is found or the auction time expires to complete the transaction. The Dutch auction mechanism facilitates price discovery for NFTs.

Some users believe that Seaport launched by OpenSea is like Uniswap in the field of benchmarking crypto asset trading, which may fundamentally change the way NFTs are bought, sold and traded.

Before the launch of the Uniswap NFT business, OpenSea’s series of actions have already shown the smell of war. The competition for innovation of NFT trading products is bringing more imagination to the NFT market structure, and the biggest advantage is that the user’s NFT trading experience will be improved in the competition between platforms.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/uniswap-enters-the-nft-trading-market-and-opensea-faces-the-challenge/
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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