A leading NFT marketplace announced it will begin integrating Ethereum ETH/USD NFTs onto its platform, which could provide increased competition for market leader OpenSea. Can Magic Eden succeed at taking share from OpenSea?
What Happened: Magic Eden announced Tuesday its plans to add Ethereum NFTs to its platform.
Magic Eden, which launched in September 2021, has been the dominant player for Solana SOL/USD based NFTs. The company reports it has over $2 billion in lifetime trading volume for Solana transactions and represents 90% of secondary trading for Solana NFTs.
“This news accelerates Magic Eden’s efforts to extend its presence across Web3 communities by integrating the two largest blockchains for NFTs and delivering the most feature-rich multi-chain experience for creators and collectors,” the company said.
Magic Eden believes going multi-chain will help bring in new collectors and communities and also enable NFT creators to “launch seamlessly.”
The NFT marketplace company will debut its cross-chain Launchpad with EZU, a sister collection of Psychedelics Anonymous, a popular Ethereum project, in the coming weeks. EZU will launch on Magic Eden with the ability for users to mint in Ethereum and Solana.
“Through our cross-chain Launchpad, creators will unlock a new set of audience through which they can amplify and grow their projects, as well as tap into additional sources of liquidity,” Magic Eden co-founder Zhuoxun Yin said.
Why It’s Important: The launch of Ethereum NFTs on Magic Eden comes after market leader OpenSea began offering Solana NFTs on its marketplace in April in a move to take share from Magic Eden.
OpenSea has been the dominant player for sales volume for NFTs and has been able to fend off competition despite its own problems and upset customers.
A new report from NFT analytics company DappRadar points to “looming NFT marketplace wars” after acquisitions and new product launches in the space. OpenSea acquired Gem, and Uniswap acquired Genie, two companies that could help serve NFT customers.
“These acquisitions will most likely pit OpenSea and Uniswap in direct competition with each other soon,” the report said.
eBay Inc EBAY acquired NFT marketplace KnownOrigin, bringing an increased presence from a Web2 company into the NFT space.
The DappRadar report shows Magic Eden having a 10% market share for all NFT transactions, which could be at the expense of OpenSea.
Other marketplaces like X2Y2 and LooksRare have popped up and built small user bases, but have also faced criticism of wash trading.
One of the most disappointing entries in the NFT space may have been the launch of the Coinbase NFT Marketplace from Coinbase Inc COIN. Armed with a well-known name and over three million people signed up on a waitlist, the marketplace struggled to attract users and volume out of the gate.
A NFT marketplace launched by GameStop Corp GME passed 3,000 Ethereum in sales volume in its first 48 hours. The marketplace from the video game company passed the all-time sales volume on the Coinbase NFT marketplace at 1,704 ETH or around $1.8 million.
A report from analytics platform Dune, as reported by Decrypt, shows 1.61 million Ethereum NFTs sold on OpenSea in July, compared to 1.54 million in the month of June. Unique traders hit 400,000 in July on OpenSea, compared to 393,000 in June.
Sales volume remains down with $495 million in July compared to $695 million in June on OpenSea.
The report also shows Solana NFT sales volume down with a reported $52.4 million across all marketplaces compared to $91.5 million in the month of June.
Magic Eden raised $130 million in Series B funding in June, which valued the company at $1.6 billion. The company said at the time it would use the funds to expand its marketplaces and to “explore multi-chain opportunities.”
“Magic Eden’s goal is to define the future of NFTs by supporting the next generation of digital creators and introducing the next billion users to Web3,” the company said at the time.
With a strong user base and dominant position in the Solana NFT space, Magic Eden could pose a credible threat to OpenSea to take at least a portion of its Ethereum NFT market share.