Rapture #223: Update on NFT Marketplaces
Some interesting trends are forming within the NFT marketplace interesting. I wanted to take some time to dissect some of these emerging trends.
Solana NFT marketplaces growing despite bearish environment
Driven largely by MagicEden, NFT volumes on Solana have absolutely exploded YTD. Magic Eden currently has approximately 17,000 DAUs, which makes it the second most popular marketplace in crypto next to OpenSea's deployment on Ethereum. OpenSea on Ethereum has just under 50,000 DAUs today.
Daily volume on Magic Eden is only $1.56 million compared to OpenSea's daily volume for their Ethereum deployment of approximately $14.2 million.
Still, the growth of Magic Eden, and the Solana NFT ecosystem overall, despite the bear market, is incredibly impressive. Not only have volumes and DAUs been steadily growing for Magic Eden, but so have daily TXs.
Daily TXs on Magic Eden have increased almost 5x YTD. The growth of the NFT ecosystem on Solana, and particularly within Magic Eden, strengthens my opinion that once a bull trend resumes, Solana might be one of the L1s that will outperform.
ENS demand increases
Yet Magic Eden is not the only NFT project performing well in this bearish environment. In fact, Ethereum based ENS is on an absolute tear in terms of new names registered and volume.
ENS is now the top NFT collection traded across crypto, generating $1.69 million in daily volume and garnering almost 29,000 in sales per day.
Furthermore, as can be seen in the graph above, new .eth names registered has gone parabolic since the start of July. While ENS daily new users has gone up 3x since the beginning of July, .eth name registers has increased at a slightly faster rate, indicating that not only are new users joining the ecosystem, but current users are becoming more active by registering more ENS names.
Ethereum NFT marketplaces overall getting crushed
The success of ENS has not been enough to prop up languishing NFT marketplaces on Ethereum. Now, the past year was a breakout year for NFT market places on Ethereum, so a regression to reality was to be expected. Ethereum NFT marketplaces have effectively roundtripped on weekly USD volume, as their weekly volumes are a bit lower than they were a year ago.
Furthermore, total weekly NFT traders has been on a steady decline since the end of January.
While this trend will likely eventually reverse, I don't think the bear market for NFT marketplaces and NFTs is close to being over. There are still way too many marketplaces to support too few users, and thus there will likely need to be consolidation in the ecosystem in addition to more feature innovation for another boom to occur.
Takeaways
NFTs are cool, they are here to stay. Yet which chain becomes the biggest player in the NFT ecosystem, and which marketplace has true staying power, is still to be determined.
While I don't speculate directly on NFTs directly in size, I do track the NFT ecosystems for the purposes of determining user adoption of particular L1s and for the purpose of finding ERC-20 type tokens tied to NFT projects that I think will do well.
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