MAGIC EDEN, the Unexpected Opensea Killer?
When back in January we organized our NFT SPECIAL WEEK Event with Ledger, BlackPool and Exclusible, and the question of who could become a menace for Opensea dominance was raised, the unanimous answer was “Looksrare”.
Fast-forward to today, and well nothing could have been more wrong!
Just a look at Opensea continuous and zealous effort at throwing shade at Magic Eden on Twitter (yes, that’s a thing..) and you know where to look to find who has become the most serious threat to Opensea!
Magic Eden has not only caught up to OpenSea in terms of daily trading but has largely outperformed it! We can take the full measure of this achievement when we take into account the fact that Magic Eden only had Solana NFTs on its platform opposedly to Opensea 3 blockchain integrations: Ethereum, Polygon and Solana.
Although Magic Eden trade volume is still lagging behind Opensea, (a look at selling avg price explains a lot), Magic Eden captures 92% share on Solana and 90%+ of Solana gaming NFT volume!
Back in April, when Opensea entered the Solana NFTs market, it was supposed to become Opensea’s momentum. Opensea was to consolidate its position as the leading NFT marketplace, squishing under his boots all and sundry, and dominate forever after the NFT space.
Well, instead they ended up with a soufflé.
Magic Eden kept and keeps on dominating this market.
And Opensea’s misery has apparently only started.
Magic Eden has just announced that they were going multi-chain by integrating Ethereum NFTs, Opensea’s jealously guarded territory!
So today, we will have a closer look at how Magic Eden became an NFT space powerhouse, and why it could one day dethrone Opensea.
Magic Eden’s success, a mix of ingenuity and a pinch of luck
10 months after its launch Magic Eden can boast about its 2 billion trade volume! What can explain its skyrocketing success?
Launching on Solana, a stroke of genius
Magic Eden could have chosen to take the Ethereum road, but instead of trying to enter an already saturated market and try to fight a Titan like Opensea, they chose the Solana road. Not only this blockchain didn’t have an Opensea equivalent, leaving the field open for a takeover, but Solana was also the blockchain that fitted their vision the most thanks to its functionality and scalability.
In Magic Eden’s COO’s own words, “We love experimenting,” […] “Our fundamental belief is there will be many new types of assets using NFTs as technology.” and Solana, which processes transactions quickly & at low costs , seemed “the perfect playground to research, test, develop their marketplace and identity.”
They also launched their marketplace when there was a huge influx of newcomers from all walks of life who wanted to try out their hands at NFTs but with a more manageable entry point price which Solana NFT’s landscape provided.
It also adds the crucial advantage of being the perfect blockchain to develop video games, a key component of their success.
P2E, a Long-lived Meta
NFTs have cycles and trends referred to as Meta. They are usually very short-lived, but if there is one that has lasted for quite a long time it is P2E and Blockchain games.
As luck would have it, Magic Eden launched in the middle of their boom, fully carried by the Axie Infinity explosion.
For months on end, Blockchain gaming became a key component of the NFT landscape until the trend started to seriously tank in March 2022.
The place to be to find them? Magic Eden.
They made blockchain gaming a central piece of their strategy and created Eden Games, a platform that accounts for more than 90% of Solana’s gaming market.
The Solana Summer effect on Magic Eden
The unexpected effect of Opensea integration of Solana was that it fueled Magic Eden’s popularity when it triggered a kind of Solana Meta (Named “ Solana Summer” but it would be more accurate to call it “ Solana Spring” considering its time frame).
In this article, we discussed at length the Solana Blockchain situation, and in short, Opensea integration has been key in renewing Solana NFTs perception and allowed plenty of new players to enter this space.
And that’s when Magic Eden really gained even more traction. There was not a post about a Solana NFT collection success story that did not include how Magic Eden had been key in making it possible and how Opensea was basically ripping the fruits of Magic Eden’s work.
Soon enough people who had never even heard about Magic Eden knew about it.
Magic Eden gained massively in visibility as much as in volume carried by the Solana Meta.
The Solana Summer, although triggered by Opensea, was first a result of Magic Eden building the innovative ecosystem that would make its emergence possible. Without it, Solana NFTs would probably not have gained that much ground in such a short time, especially considering Solana Blockchain’s (well-deserved) bad reputation.
And this ecosystem and mindset that made Magic Eden a success in the first place could be the one making Opensea stumble.
ME’s Unique Features & Competitive Advantages
A grounded approach
In MagicEden’s CEO Jack Lu’s own words, “What NFT marketplaces needed was more attention to product design” and he “sought to set their company apart by showing off a greater variety of uses for NFTs.”
Two sentences that encompass Magic Eden’s strategy.
They paid attention to the buyer’s experience as much as the creator’s, created spaces where they could interact with their users and have constructive feedback to improve their platform user experience.
A mindset that was key in developing Magic Eden’s components that would make them different from everything else that exists on the market.
The Launchpad + Suite of Tools for Creators
The Launchpad created by MagicEden is a mining platform that also acts as a 360° support system.
The launchpad is not available to all projects but to a selected few that passed the selection screening. Usually, less than 5% of projects are selected.
These projects will be able to enjoy all the tools made available to them, and the cherry on the cake is that NFT creators are also able to connect with each other through a special creator community. Which is non-negligible when you know how much peer-to-peer counseling is key in the NFT space
MAGIC SHIELD, the tool to protect creator’s royalties
In the middle of the Sudoswap controversy, that suppress creator’s royalties, causing panic among NFT builders, Magic Eden has launched MetaShield, a new tool aimed at deterring NFT buyers who bypass creator royalties by enabling creators to flag an NFT or blur the image if the listed or traded NFT bypasses creator royalties. A crucial argument to choose its platform.
A New Feature is coming: MAGIC EDEN LIST
It’s a whitelisting tool for creators and collectors. For creators, it allocates whitelists to their community seamlessly. For collectors, it allows them to sign up for whitelists with a click of a button.
NFT buyer’s facilitated end-to-end journey
In this Magic Eden’s Coo interview, he emphasizes how they built Magic Eden to simplify the NFT journey of buyers by making it easy for them to discover NFTs projects worth the shot.
If for you, NFT’s value resides in its ability to become a successful speculative asset, finding the next project in which you want to invest can turn into a time-consuming, life-consuming hassle. You have to forage endlessly through (and pay to have access sometimes) alpha groups, discords, Twitter, analyst websites, minting schedules,…
That’s how the launchpad comes fully into play!
The level of quality control applied in selecting projects that will be featured, builds confidence among buyers who will feel safe investing in a project. Trust being web3’s most precious commodity, it is reflected in secondary trading’s performance of projects selected for the launchpad.
An initial screening is also applied for the secondary market. Traders have to apply for a listing before being able to have it listed. Here again, building the buyer’s trust is at the forefront of their strategy.
And it pays up, Magic Eden’s secondary market is thriving.
By building a culture of trust and safety around Solana NFTs projects, where there used to be only mistrust and suspicion, Magic Eden became an architect of Solana NFTs adoption.
Going Multichain & Cross Pollination
Although Magic Eden chose Solana to propel their marketplace, Ethereum has always been a crucial part of its growth strategy. Based on Zhuoxun Yin , it was what their last seed round was about.
Going on Ethereum was “embracing Top NFTs ecosystem”.
By going multi-chain, Magic Eden says it will “enable NFT creators to launch seamlessly, reach new audiences, and access added liquidity, while collectors will be able to discover new communities and connect across the passionate culture of the emerging space.”
An adoption that marks a “pivotal point” in their journey as a marketplace.
In their quest to “deliver the most full-featured multi-chain experience for creators and collectors”, they will make it possible for creators to mint in either sol or eth, and buyers to buy Solana NFTs with eth and vice versa to encourage the amount of cross-pollination.
Ethereum is the first step, a few days ago Magic Eden put forward a proposal to build an ApeCoinDAO marketplace for the ApeCoin (APE) community, including BAYC, MAYC and BAKC holders.
To add to this list of competitive advantages, we can also add lower transaction fees than Opensea: 2% vs 2.5% !
Hiccups to come?
Although MagicEden seems to be ticking all the boxes, some concerns surrounding security have been raised and they could cost a lot to MagicEden.
As previously emphasized here, there is nothing more valuable than trust and nothing more destructive than the loss of trust.
In web3, a wild wild west land, every breach of security is taken extremely seriously and has a tremendous impact on the ones who were victims of it. One major breach is enough to bury a project.
Magic Eden has been under scrutiny for its escrow-based model ( full details here ) and its new multichain development has also raised concerns surrounding the safety of using bridges that have been subjected to spectacular hacks these past months.
Its Launchpad security process also seemingly needs to be improved as some projects are proved to be rug pull post mint like the DegenTown NFT project rug pulling after promotion from Magic Eden.
Legitimate Concerns and risks that Magic Eden needs to address quickly and efficiently to avoid worst-case scenarios.
Conclusion
Although users who don’t have a love-hate relationship with Opensea are hard to find, humans are animals of habit. So, even if Opensea is far from perfect, NFTs buyers are used to it and that’s where the biggest hurdle for Magic Eden could lie.
It will probably ask of MagicEden an intense communication strategy, bringing over key actors of the NFT space and building meaningful and impactful collaborations, to maybe start seeing people switch en masse to Magic Eden.
Although none of us can predict the future, Magic Eden is coming for the throne and may very well take it.
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