Like its rivals, NFT market Magic Eden has had a tough 12 months.
It dominates the NFT market on Solana, dealing with at the very least 90% of the buying and selling quantity on any given week, in line with an evaluation of knowledge from Nansen. On Ethereum, NFT buying and selling quantity is a fraction of what it was at the start of 2022 – on Solana, buying and selling quantity has held regular.
But that quantity is denominated in Solana’s native token, SOL, which cratered within the wake of FTX’s collapse. SOL has loved a exceptional rally to start the brand new 12 months, however remains to be price half as a lot because it was in August. That means much less income for creators on Solana, and fewer for marketplaces like Magic Eden, which take a lower of each transaction.
“That last few months have been challenging at Magic Eden, to say the least,” a girl intones in the direction of the top of a year-in-review video Magic Eden shared on social media final month. “And we’re working hard to get back on track.”
It’s attempting a few issues. Magic Eden is trying to understand its purpose of turning into a real multi-blockchain market, Tiffany Huang, the corporate’s head of selling, informed The Defiant this week. It’s turning to tried-and-true strategies to spice up person retention. But it’s additionally attempting one thing extra formidable: increasing the aim of an NFT market.
In a crowded trade the place developments unfold like wildfire — see, for instance, the increase in royalty-free platforms final 12 months — it has the prospect to upend how the gatekeepers of the NFT world do enterprise.
Magic Eden launched on Polygon, a preferred scaling answer for Ethereum, in mid-December.
But it has a frightening process forward.
OpenSea dominates NFT gross sales on Polygon. A trio of lesser-known marketplaces, NFTrade, Treasureland and Refinable, debuted on Polygon within the latter half of 2022, in line with knowledge collected by NFT indexer Zash. About $400 price of NFTs had been bought on NFTrade, the biggest, within the week ending Jan. 23.
Element, as soon as the biggest NFT market on Polygon, has since fallen to a distant second, having processed lower than $100,000 that week. OpenSea processed greater than 4 instances that.
Magic Eden declined to supply knowledge concerning its efficiency on Polygon. Through a PR consultant, Polygon stated it couldn’t present that knowledge earlier than publication.
Asked why Magic Eden selected Polygon as its subsequent residence, Huang cited the blockchain’s success in getting new individuals to dip their toes in crypto.
“Polygon is known for the power of its business development,” Huang stated, “and its ability to forge relationships and partnerships with really powerful brands that are actually onboarding a lot of people into the space, whether it’s Nike, Starbucks, Reddit, you name it.”
Polygon just lately paid DeLabs, the corporate behind a few of Solana’s hottest NFT collections, $3M to maneuver from Solana.
DeGods’ head, the pseudonymous Frank, addressed the transfer in a message to followers on Discord.
”DeLabs obtained a $3M non-equity grant from Polygon to assist fund the enlargement of the DeLabs crew,” he wrote within the Y00ts Discord channel. “I’m sure there will be tons of slander on Twitter about the reasoning behind this decision. … Next time, let’s chat about the actual game plan of how we’re about to go mainstream.”
Magic Eden additionally intends to make a “stronger re-entry” on Ethereum in March.
“Right now we have more of an aggregator experience, but we don’t have proprietary listings,” Huang stated. “In March, we’ll have proprietary listings. … You’ll be able to list your NFTs across multiple marketplaces, so Magic Eden will just be another marketplace you can list on.”
Magic Eden can be attempting new strategies of boosting person retention.
“The first thing that we shipped was fee discounts based on trading volume, which no other marketplace is doing,” Huang stated.
Magic Eden customers earn factors for utilizing the platform. Based on the variety of factors they’ve accrued, they’re sorted into one among 5 tiers, with higher-tier customers having fun with deeper reductions. A January promotion put each person into tier 4, which presents a 25% price low cost.
Where different marketplaces apply transaction charges to the vendor of an NFT, Magic Eden has additionally tried to separate the burden between purchaser and vendor in an effort to convey extra liquidity to its market.
“We’re in a bear market,” Huang stated. “I think everyone is just trying to find ways of holding on to the user [in order to] to win their attention.”
Magic Eden will likely be monitoring a number of metrics to gauge the effectiveness of its technique.
To see and declare accrued rewards, customers should join their digital wallets — commonplace for any crypto software — however in addition they should signal into Magic Eden.
“That’s very Web2, because in Web3, the connector wallet is kind of like the stop point,” Alexis Miller, Magic Eden’s product advertising crew, stated. “So you don’t really have any clear picture of who that customer was, or any identity model associated with it.”
But a part of crypto’s attraction is the default anonymity. To overcome this, Magic Eden is contemplating methods to incentivize logging in.
“We’re also looking at claim rates,” Miller stated. “Are our users claiming these rewards? Do they care about these rewards?”
Magic Eden doesn’t simply need to be an NFT market, nevertheless.
“When we think about time spent on the platform, we want to think about what else people can do in this ecosystem besides just transact,” Miller stated.
To that finish, Magic Eden is eyeing a transition to one thing extra like a social media platform, in order that “all of the socializing [isn’t just] happening on Discord and Twitter,” Miller stated. “How do we look at our platform as another destination for people to interact and get to know each other within this space?”
Huang stated it’s all about attempting to separate Magic Eden from the pack.
“If you think about NFT marketplaces right now, they’re all very transactional. There are no switching costs,” she stated. “That’s why you see all these different competitors who are offering a lot of these short-term incentives. But ultimately, in order to have longevity, you need to think differently.”