The NFT gold rush is in full swing: who will rule the metaverse?

  • The current NFT craze is resulting in a number of large companies joining in, with Visa recently spending $150,000 on the popular NFT, Cryptopunk 7610.
  • Alongside this, popular social media platform, Tik Tok, has launched an integration of NFTs on its app where users can own unique sections of history.
  • Whilst NFTs pick up speed, a number of marketplaces will continue to be fiercely competitive with each other, in the hope to reign supreme as users preferred platform.

The new wave sweeping across the crypto eco-system has seen more renowned companies make moves into Non-fungible Tokens (NFTs). Tik Tok, Coinbase, Visa, and Sotheby’s are some of the latest firms to announce they will become active within the space. This influx could cause a battle between these new companies and the more established ones, like OpenSea, to see who reigns supreme in the long run.

NFTs growing appeal

The appeal of NFTs has been on the rise. NFTs can be anything; tweet screenshots, photos, GIFs, videos, music, etc. However, the current buzz centers around the ability to trade digital art using this tech. For some, the attraction lies in their ability to provide high returns within a short amount of time.

With increased user adoption, prominent corporations are beginning to make inroads to capitalize on the growing interest. Just recently, payment gateway giant Visa, collaborated with digital Artist, Micah Johnson, to promote the creator economy. This follows their previous $150,000 purchase of popular NFT Cryptopunk 7610, Visa’s first foray into the metaverse.

In other news, Coinbase has caused a stir with the announcement of its NFT marketplace, following in the wake of FTX and Binance, who have also sought to in on the NFT craze. Brain Armstrong, Coinbase’s CEO, revealed via Twitter that over one million individuals are on the waitlist of early adopters.

Popular social media platform, Tik Tok also launched an integration of NFTs on it. Traditional auction house Sotheby likewise announced its NFT marketplace, Sotheby’s Metaverse. Earlier in the year, the auction house had been involved in the auction of some NFT collections — Cryptopunk, and Bored Ape Yacht club, while also selling a Pak piece for $17 million.

All this shows a diverse range of companies from crypto exchanges, art auction houses, and payment platforms looking to join the NFT mania and get a slice of the market share for themselves.

The OpenSea question

A major stumbling block to these new players in the NFT space comes in the form of OpenSea.

OpenSea may pose a major threat for new competitors that want a piece of the action from the NFT space. Being a native blockchain platform, OpenSea offers a decentralized peer-to-peer platform for anyone to trade and create NFTs.

OpenSea is not resting on its laurels, and just recently introduced a mobile app to help ease the process of interacting with NFTs and making them more accessible for users.

Data from DappRader puts the average user base of OpenSea at 554,000 with a market share of over $8.8 billion. Its nearest competition Axie Infinity, an NFT play-2-earn gaming platform, currently has a market share of $2.54 billion, nearly a quarter of OpenSea’s total value. It, however, has more users, with over 800,000 on the platform. This shows the formidable challenge in store for the companies getting into NFTs, as there is a lot of catching up to do.

Ranking of NFT marketplaces.

Ranking of NFT marketplaces.

Image: DappRader

Blockchain is an early-stage technology that enables the decentralized and secure storage and transfer of information and value. Though the most well-known use case is cryptocurrencies such as bitcoin, which enable the electronic transfer of funds without banking networks, blockchain can be applied to a wider range of purposes. It has potential to be a powerful tool for tracking goods, data, documentation and transactions. The applications are seemingly limitless; it could cut out intermediaries, potentially reduce corruption, increase trust and empower users. In this way, blockchain could be relevant to numerous industries.

That said, blockchain also entails significant trade-offs with respect to efficiency and scalability, and numerous risks that are increasingly coming to the attention of policy-makers. These include the use of cryptocurrency in ransomware attacks, fraud and illicit activity, and the energy consumption and environmental footprint of some blockchain networks. Consumer protection is also an important and often overlooked issue, with cryptocurrency, so-called “stablecoins” and decentralized applications operating on blockchain technology posing risks to end-users of lost funds and also risks to broader financial stability depending on adoption levels.

Read more about the work we have launched on blockchain and distributed ledger technologies – to ensure the technology is deployed responsibly and for the benefit of all. We’re working on accelerating the most impactful blockchain use cases, ranging from making supply chains more inclusive to making governments more transparent, as well as supporting central banks in exploring digital currencies.

As NFTs grow and more users adopt them, the race to reign supreme may heat up. Different players all have unique advantages that may see them get a decent market share eventually.

Twitter and Tik Tok have large user bases — 206 million active daily users and 1 billion monthly active users, respectively. Coinbase, FTX, and Binance are already popular within the crypto community and are licensed and regulated, making them trustworthy.

OpenSea, however, currently holds the enviable position of leading the NFT marketplace. It would take a monumental effort from any company mentioned above to knock it off its perch.

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