The most hyped marketplace is finding it hard to gain momentum
The highly anticipated Coinbase NFT marketplace has had a dismal first month of trading, partly due to launching during a downturn and finding it hard to gain traction. The Coinbase NFT marketplace has processed just 5,446 transactions and a little over $1 million in sales since April 20. During the same timeframe, leading NFT marketplace OpenSea racked up over 4 million transactions and more than $4.6 billion in sales volume.
Launching an NFT marketplace by leading centralized exchange Coinbase was expected to put NFTs closer to some of the 98 million verified accounts and push adoption further. Especially as more than 2 million people signed up for the waiting list. However, as some point to an economic downturn and crashing crypto prices to explain the anti-climax, it’s essential to look at how other NFT marketplaces perform.
Don’t blame bitcoin
The data points to a situation where NFT trading and sales are still highly active, just that the Coinbase NFT Marketplace isn’t seeing much action. OpenSea has been dominant in the NFT secondary market and hasn’t released its vice grip despite serious attempts from LooksRare and other suitors to dislodge them.
OpenSea racked up over $4.6 billion in NFT sales volume from over 4 million transactions and almost half a million users since April 20. LooksRare has remained competitive despite changes to its LOOKS token rewards, processing more than $2 billion in sales volume from far fewer transactions. Notably, a lot of the activity on LooksRare involves bad actors selling NFTs back and forth to themselves to gain LOOKS tokens. Hence the lower number of transactions, but still generating $2 billion, or half the sales volume of OpenSea in the same time.
OpenSea was buoyed by the Bored Ape Yacht Club Otherside NFT land sale, which happened at the end of April. Significant spikes can be seen around May as NFT land plots started trading on the OpenSea NFT market.
No need to panic
Despite a slow start, transactions and sales on the Coinbase NFT marketplace are starting to pick up momentum, with May being the most active month. The marketplace has processed 2,465 of its total 5,566 NFT sales in the last seven days, showing an increased appetite for NFTs from Coinbase as prices denoted in ETH began to fall in line with token values on May 5.
Looking at which NFTs are selling on the Coinbase NFT marketplace reveals NFTs mostly from what are now considered blue-chip collections. This again supports the idea that more educated buyers are making purchases of top NFTs now due to the falling price of ETH and the ability to grab a discount. Doodles have generated more than 136 ETH, or around $275,000. Tiny Cats and RTFKT also top the list, while Otherside land and VeeFriends Series 2 see fewer sales.
Interestingly, the Coinbase marketplace hosts storefront pages for OpenSea, Rarible, and Known Origin. These act like a portal for customers to purchase NFTs from these alternative platforms without leaving the Coinbase marketplace. Together, these Rarible pages host almost 200,000 NFTs, while the OpenSea page surpasses 1.5 million. The Coinbase NFT marketplace is funneling a lot of traffic and sales volume to its competitors.
Another interesting observation is that on the Rarible page shown at the top of the list above, as having accumulated 1487 sales and generated over 21 ETH, we see some suspect NFT items. To the trained eye, these items are replicas or fakes of original NFTs. They depict blue-chip collections like BAYC or MAYC. However, the main giveaway is the price. According to this page, I can get a Bored Ape x Louis Vuitton NFT for $15. Arguably these sales are the reason behind such inflated numbers seen through the Rarible contract and could be stimulated by uneducated buyers with weaker hands using the Coinbase marketplace.
It’s early days for the Coinbase NFT marketplace, but some prolific wallet addresses already stand out. With 109 sales, we see CheeryBen at the top of the pile.
Further wallet diving using the DappRadar Portfolio Tracker shows that the wallet contains 267 NFTs worth around $11,000. However, the wallet is packed full of what looks like a well-curated collection of rip-off and imitation NFTs with low individual values.
On first inspection, you might think, this person bought lots of fake NFTs from the aforementioned Rarible collection. While it’s indeed possible, it’s a fact they are trying to flip them at 100x the value on their page that sets alarm bells off. Looking at the trading history for Nounbird#3106, it appears that this person is trying to trick other unsuspecting people into buying a fake priced at 138 ETH, or around $275,000.
This could be happening on a marketplace like Coinbase, where arguably the user is far less aware than those using decentralized platforms like OpenSea. More worrying is that somebody might pay 138 ETH for a copycat NFT, undoubtedly bringing a lot of negative press to the Coinbase marketplace and NFTs overall as a knock-on effect.
NFTs dead? Don’t be silly
While some will blame the markets for Coinbase’s underwhelming performance this past month, we at DappRadar see a different picture emerging for NFTs amidst a bear market scenario. At the end of April, we observed NFT markets recover after a six-week cooldown period with $6.3 billion in monthly trading volume; Moonbirds were a big driver with $0.5 billion generated in trades immediately. Interestingly, we saw NFT trading volume on Solana grow 90% from March, reaching $295 million, driven mainly by Okay Bears and DeGods. Alongside all this, Yuga Labs’ Otherside land drop stirred the crypto market with $340 million in APE from the mint and $420 million in secondary trades.
Coinbase is still the largest cryptocurrency exchange in the US and arguably saw its opportunity to grab a slice of an NFT market now worth billions of dollars. After a rather abrupt entry into the world of NFT marketplaces, the Coinbase NFT marketplace now has some serious work to engage its audience and educate them about NFT ownership and its perils.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in various cryptocurrencies, including BTC, ETH, and RADAR.