NFT trading platform: blue ocean or red ocean market

Key Takeaway

  • Blue ocean market is an emerging market with high profit margin and no vicious competition; The Red Sea market is a known and highly competitive market, with high barriers and strict industry competition rules.

  • Among markets of different sizes and forms, some markets can bring innovative value to both sides of the transaction, while some markets simply copy the income generating model of other markets.

  • Some platforms using token provide users with new value through incentive design, such as looksrare and magic Eden.

  • On May 16, 2022, magic Eden's daily trading volume was $47.22 million, while opensea's trading volume was $32.88 million. The number of daily active users of me has also exceeded that of OS.

  • With opensea adding support for sol, cross chain and whole chain NFT market may be one of the future trends. According to magic Eden, Solana NFT sales on opensea are about 9% since the launch of magic Eden.

  • With the maturity of NFT secondary market and derivative trading, NFT trading market needs to rethink the way and user experience of NFT index trading, fragmented trading and derivative trading.

The concept of blue ocean strategy was first put forward by W. Chan Kim and Ren é e Mauborgne. It refers to enterprises taking the initiative to explore emerging and uncompetitive markets. The strategy does not focus on market segmentation and meeting user preferences, but achieves value innovation by changing industries, resetting game rules, merging market segments and integrating needs. On the contrary, everyone in the red ocean market is a competitor, and there are strict barriers between the markets.

The early NFT market was a blue ocean market. With the launch of NFT trading platform opensea, the NFT market has mushroomed and expanded rapidly. At first, opensea did not have any competitors in the whole NFT trading field, but withSuperRareAnd nifty gateway and other new trading platforms entered the market, and the prelude to the competition was officially opened.

In the past few months, x2y2, looksrare andCoinbase New trading platforms such as NFT are constantly emerging, and the secondary market is gradually saturated, which is what we mentioned above - Red Sea: the market is crowded, the growth power is lack, the profit margin continues to decline, and finally moves towards white hot competition. In other words, the Red Sea means a battle for the interests of the project parties. More wolves and less meat, so promoting innovation and finding the right market positioning will be the key to success.

market value

With emerging competitors entering the market, many project parties began to seek value innovation and pursue the development mode of increasing revenue and reducing expenditure. There are clear boundaries between the existing markets. What kind of service and what type of market users need came into being. For example, some investors prefer artistic minority NFT and 1 / 1 art works. The trading market selling unique NFT works such as foundation or nifty gateway meets the needs of these users.

NFT交易平台:蓝海 or 红海市场?

Value innovation model; Data source: nftgo IO, blue ocean strategy

Although there are a large number of platforms providing NFT trading services, the project parties are still pursuing to bring new interactive experience to users. The newly launched coinbase NFT is one example. The platform adds social functions on the basis of the original trading website to facilitate users to leave messages in the NFT interface and share NFT investment experience.

Through pioneer Migrator map, we can easily distinguish which websites are creating value for users and improving user experience, and which websites may only reproduce the original operation mode.

NFT交易平台:蓝海 or 红海市场?

Pioneer Migrator Map; Data source: nftgo IO, blue ocean strategy

There are many platforms providing NFT trading services, but the overall operation strategy of these platforms is convergent. We can measure the core competitiveness of different platforms through the market evaluation chart. The y-axis in the figure below shows the performance of each platform in different competitiveness factors. In addition to the indicators shown in the chart, we also added several indicators such as "cost structure", "multi chain aggregation" and "complex operation". The higher the score on the y-axis, the more value the platform brings to both parties of the transaction. On the contrary, The less score, the less value it creates.

NFT交易平台:蓝海 or 红海市场?

Market value evaluation chart; Data source: nftgo IO, blue ocean strategy

Although users enjoy similar services between different platforms, opensea is still a well deserved head project among all NFT trading platforms. With the launch of more and more trading platforms, it can be predicted that the data broken lines on the market value evaluation chart will become more and more intensive in the next few years. Nowadays, creating new value from NFT transactions will also become a problem that platform developers need to think about.

Who is the leader?

Whether it can create value is the key factor for the trading platform to win in the long-term competition. Total market sales and market value evaluation chart are the key indicators to measure value. The more value the platform provides to users, the more transactions reached through the platform. In the figure below, we can see the total sales data of the five top trading platforms (the data statistics of looksrare exclude "cleaning transaction" and "maximum sales").

NFT交易平台:蓝海 or 红海市场?

Total market sales; Data source: nftgo io

After looksrare went online, thanks to the new value it brought to users, it quickly occupied a large market share and developed intoEthereumThe second largest NFT trading platform.

NFT交易平台:蓝海 or 红海市场?

Market share; Data source: nftgo io

Leaving aside the behemoth of opensea, it is not difficult to find that due to the similar services provided to users by rarible, foundation and superrare, the competition among platforms is also fierce.

NFT交易平台:蓝海 or 红海市场?

Total market sales (excluding opensea); Data source: nftgo io

Looksrare brings new product value to users. It is the trading platform with the highest market share among the four trading platforms except opensea.

NFT交易平台:蓝海 or 红海市场?

Market share (excluding opensea); Data source: nftgo io

NFT交易平台:蓝海 or 红海市场?

Transaction fee (looksrare 2%, opesea 2.5%, x2y2 0.5%); Data source: nftgo io

Token driven market model

Recently, magiceden, Solana's NFT trading market, released its own token. To some extent, token provides the platform and traders with the possibility of common growth. Opensea has made considerable income through high handling fees and service fees, but it has not fed back the income to users. It is worth noting that the number of daily active users of magic Eden has also surpassed the trend of opensea.

NFT交易平台:蓝海 or 红海市场?

Seamagic users are catching up with seamagic; Data source: nftgo io

Looksrare and rarible also bind the platform and users to a certain extent by issuing tokens ($looks and $rari). For example, the user can get the share of service charge by pledging $looks. The more pledged, the more active the platform transaction, and the reward the user can get (WETH)More. The introduction of token enables users and platforms to grow together. In the community-based Web3 era, how to integrate users' interests into the platform is also an issue that major NFT markets need to consider, compared with unilaterally allowing users to be consumers.

Yuga labs: the next trading platform?

Imagine the NFT trading market excluding the following six Collections:

  • Bored Ape Kennel Club

  • Bored Ape Yacht Club

  • Mutant Ape Yacht Club

  • Otherdeed

  • CryptoPunks

  • Meebits

Yuga Labs' ambition is not limited to metargp games and PFP. As a leading competitor in the NFT market, its major projects have widely won the trust and support of the public. More importantly, these projects have also achieved long-term growth in the number and value of transactions. The sale of $ape tokens is a key step towards the success of Yuga labs. At present, the total market value of Yuga labs is $4.03 billion, compared with the market value of looksrare of $441 million. Yuga Labs' potential market size may rank second among all Ethereum trading platforms.

NFT交易平台:蓝海 or 红海市场?

All time market cap; Data source: nftgo io

All time volume calculates the total amount of transactions realized by each collection in US dollars since the offering.

NFT交易平台:蓝海 or 红海市场?

Full time trading volume; Data source: nftgo io

From the top markets chart, we can see that although Yuga labs has just been developed for one year, once it is listed, it is definitely a strong competitor compared with other trading platforms.

NFT交易平台:蓝海 or 红海市场?

NFT market ranking chart; Data source: nftgo io

Through the above data analysis, it is not difficult for us to see that Yuga labs has brought considerable benefits to NFT holders by seizing the head traffic in the NFT market and through growth modes such as airdrop and white list, enabling the future product model in a "bottom-up" mode.

epilogue

At present, the number and amount of transactions in the market and the overall liquidity are declining. The instability of the market has prompted people to invest in more stable blue chip NFT assets. Due to the obvious head projects, Ethereum ranks first in single transaction volume, but NFT markets on other chains have the trend of small and large transactions. The multi chain market can bring more new liquidity and promote innovation and growth in the market dominated by blue chips.

In addition, the platform also needs more original activities to attract users. For example, the newly launched market blur has achieved some results in the formulation of marketing strategies. The platform has created a preferential treatment mode for early investors. At the same time, in order to promote the upcoming beta version, blur also allows each og to invite five friends to experience the beta version of the platform together, and use the beta version to obtain points for exchanging practical tools in the platform. The success of blur marketing strategy is to turn users into platform spokesmen, let them speak for the platform and attract other NFT investors.

The beneficiaries of the red sea fight will always be users. However, in the Red Sea competition, the boundaries between NFT trading platforms are becoming clearer and clearer, and the trading mode of Web3 platform will change imperceptibly. Traffic, voice and community will also be the propositions that NFT trading market needs to continue to pay attention to.