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The State of NFT Marketplaces

Binance Research (JieXuan Chua, CFA)


  • The entrants of several new NFT marketplaces over the past year have upended the status quo and challenged the market dominance of existing players.

  • Blur, a relatively new NFT platform, has moved up the leadership board barely two months after their launch in mid-Oct. We analyzed their rise and attributed it to competitive strategies relating to their product, token incentive, airdrop design, and the team. It remains to be seen whether Blur will be able to sustain their lead when incentives taper.

  • Given the fluidity of the market and the general lack of platform loyalty, the marketplace war is far from over. Notably, OpenSea has turned up the heat in their latest move to eliminate trading fees to compete with Blur. Nonetheless, the lack of token incentives (when $SEA?) makes it challenging to incentivize usage of the platform as OpenSea has to figure out other non-monetary ways to do so.

  • Our view is that the next critical move in this fight for market share relates to royalty policies. While optional royalties increase price competitiveness of platforms, creators have been caught in the crossfire of this NFT marketplace battle. Optional royalty policies are not beneficial for the industry, nor sustainable for creators in the long run.

  • In the ideal scenario, marketplaces, creators, and market participants should work out a middle ground that is beneficial for all - balancing considerations involving monetary incentives, fostering creators’ creativity, and long-term growth. Perhaps a decentralized marketplace is a potential solution that can allow for social consensus to be built and to align the interests of different stakeholders in a democratic manner.


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