As crypto moves at an extremely fast pace, what is the biggest and the best today might be something else tomorrow. At the time of researching, the biggest by trading volume is OpenSea, LooksRare, and Magic Eden, but not that long ago, Solanart and Rarible were some of the biggest and best ones out there.
What might be the biggest NFT platform by volume…:
Might not be the biggest platform by users:
But next, we will study what are the biggest ones by users and trading volume and what marketplaces can give us the best gains when it comes to trading NFTs. Only two marketplaces were selected as they presented the biggest user base and trading volume, but also presented two different blockchains, Solana and Ethereum.
While LooksRare and Solanart have strong trading volume, those are not the marketplaces that have the most users. Users eventually create the market and whichever marketplace has the most users, eventually makes the most money and creates the biggest economy.
What is the biggest marketplace might not be the best marketplace. LooksRare has some built-in trading mechanics, where you can earn by trading NFTs, and also the trading fees are 20% lower than on OpenSea for example.
What might best or the biggest marketplace for NFTs, might not be the most profitable one. Metis as a new blockchain also offers avenues for you to make some early discoveries and to get some nice collectibles. And as it’s a layer 2 blockchain, the transaction fees are much lower compared to Ethereum.
OpenSea (Ethereum, Polygon, Klaytn)
While not going to the lengths of when OpenSea was founded (2017) and how many employees it currently has (~93), we will focus on what makes OpenSea a worthy place to make investments and trade NFTs for wealth generation.
OpenSea has some pretty insane statistics when it comes to trading on the platform. OpenSea had some nice $2.5B in trading volume (9.3.2022, last 30D) even though the overall crypto market was and is having a rough time. It still doesn’t stop people from trading NFTs and making money on the marketplace. However, the historical activity does slightly correlate with the overall crypto market, but what part is ETH’s price appreciation, and what is market fluctuation.
This tells the story that NFT trading and metaverse economy almost works on their own terms, regardless of market conditions. While OpenSea supports Polygon and Klaytn, the majority (pretty much 99.9%) is still made on Ethereum.
What news to be noted is that a platform called Wormhole enables you to transfer an NFT from one chain to another. For example, you can transfer Degenerate Ape Academy NFT from Solana to Ethereum and eventually to OpenSea marketplace for trading. However, as this is new technology and everything, do read the documentation before using the mentioned service.
It almost feels like there can only be one king marketplace for NFTs in Ethereum and that’s OpenSea. If the majority of the users are on OpenSea, why would someone launch a collection somewhere else? The only reason could be initial easier exposure for a smaller project. Bigger projects get bigger exposure and some collections might get left in the dust.
Collections
Not all successful collections are on Ethereum, NBA Top Shots, for example, is in Flow and some in Immutable X. Majority of the collections are of course in the Ethereum blockchain, but every now and then you see super successful collections elsewhere.
In January 2022, almost 2,5M NFTs were sold on OpenSea with almost $5B in worth. These numbers tell the story of demand for NFTs, but this demand can fade as quickly as it came. Crypto space moves rapidly and we have seen narratives play out a while until they are not played anymore.
Most notable collections as of March 2022:
- CryptoPunks
- Bored Ape Yacht Club
- Decentraland
- Mutant Ape Yacht Club
- The Sandbox
- CLONE X – X TAKASHI MURAKAMI
- Azuki
- Rarible (not an actual collection per se)
- Meebits
- Cool Cats NFT
Magic Eden (Solana)
While Magic Eden is relatively new, it has gained a lot of popularity and engagement. You can see this from the numbers below:
Magic Eden is the 5th largest dapp by trading volume, just coming behind the largest DeFi protocols on the Solana blockchain. Magic Eden is the #1 marketplace on Solana and has seen some steady growth over the last months it’s been online.
Solana is its own blockchain and thus has its own collections, so do not wonder why you don’t see Bored Ape Yacht Club on Magic Eden, it’s because they don’t share the same blockchain. OpenSea uses ERC-721 and ERC-1155 standards to issue NFTs, Solana on the other hand seems to use Metaplex and Candy Machine v2 for minting NFTs.
We also have to remember once again that Ethereum uses Solidity smart contract programming language whereas Solana uses Rust. This affects the way these blockchains work together and what can and cannot be transferred between the chains.
Collections
While the most traded collections might be on Ethereum, Solana also has some notable collections, such as:
- GGSG: Galactic Geckos
- Degenerate Ape Academy
- Shadowy Super Coder DAO
- Aurory
- POrtals
- Thugbirdz
- Meerkat Millionaires Country Club
It’s hard to say will the NFT craze continue or are we going to see more utility-based NFTs in the future. Probably the latter one.
Minting And Fees
Minting is simply said, creating. When you min an NFT, you are creating an NFT and putting it out for sale. But for you to mint and NFT, you need Ethereum. Remember, blockchains like Ethereum uses ETH (native coin for Ethereum chain) to do transactions on the chain. It’s like paying a fee for the chain to do stuff for you. In this case, create an NFT to the blockchain.
OpenSea
OpenSea, or more like Ethereum will charge an account initialization fee of US$70 to US$300, depending on the congestion of the Ethereum network and the price of the ETH coin. The more transactions the network has, the more congested it is and the more you will pay for every action taken in the Ethereum blockchain. The second transaction is giving access to OpenSea to the NFTs you create and that is roughly US$10 to US$30.
When you use lazy minting, you don’t pay the minting price before but only after that specific NFT is sold. So the NFT is pretty much minted-on-demand. Making you save money if for some reason your collections/NFTs are not sold right away.
Now OpenSea also has its own fees placed upon you and those are 2.5% of each transaction you make through their platform. However, the best part about NFTs is that you will indefinitely earn money through secondary sales. Previously when you sold digital art or something online you only get compensated once, with NFTs (max of 10% of the sale) you earn money whenever that NFT is sold.
Magic Eden
As Magic Eden is on the Solana blockchain and we know that Solana is fast and cheap to use, the platform does not take any listing fee whatsoever. And for Magic Eden to continue running its business, they take a 2% cut of each transaction happening on their platform.
This time, you do not use ETH but SOL (Solana blockchains native coin) to make transactions on Magic Eden. You can also as a seller define the royalties you want from the NFTs you create to the platform. OpenSea had a roof of 10%, but Magic Eden did not define such value in their documentation.
Trading Volume
While overall we can think that Ethereum, NFTs, and OpenSea are all going to the moon and maybe even to Mars, the trading volume is still something to keep an eye on. While August 2021 was a massive month for OpenSea and NFTs, the trend might actually be a bit declining.
This can be from many factors, one being that after May 2021 Bitcoin and crypto market crash, the overall interest towards crypto has been and is declining, at least according Google trends:
When people lose interest in crypto and NFTs then naturally OpenSea and other big NFT marketplaces lose traction and volume. So if the trend follows and crypto is not that interesting for a while, then making money with NFTs or launching an NFT collection might not be the best idea.
While there have been signs that NFT marketplaces live their own lives and have their own economy, the overall trend towards crypto ultimately decides whether we see new buyers coming into the space or not. The overall crypto trend decides the overall interest towards everything crypto and so NFTs could decline if crypto interest declines.
But there’s always a silver lining to everything. If the crypto market is in decline, that might also mean better prices for ETH and SOL. And we all know what happens when you buy quality at the bottom of the market, quality coins tend to go up someday. However, with the crypto market, we never know what happens, and all guesses are only best guesses, not facts.
But if you do get ETH and SOL for a low price, it will give you more buying power in the future, but also enables you to buy NFTs at a lower valuation, because the underlying asset has depreciated in value.
Useful links
OpenSea Statistics:
https://dune.xyz/rchen8/opensea
