Multicoin partner: The next stop of the NFT trading market is community-led
Original compilation: Amber
Original compilation: Amber
Why is the user experience of OpenSea and Magic Eden largely the same? Whether it's the features on the homepage or the way search results are presented, it's all detailed. In other words, why does the homepage of OpenSea or Magic Eden have no activity information, no live broadcast entrance, and no game advertisements or information closely related to NFT?
The answer is that the path of historical development determines all this.
OpenSea was founded in 2018, when there were only a few NFT collections on the market, such as CryptoPunks. CryptoPunks is a collection of 10,000 pixelated NFTs with some simple and filterable properties. The Bored Ape Yacht Club (BAYC) was heavily inspired by CryptoPunks: a total of 10,000 algorithmically generated images with easy and filterable search properties. The two sets, in terms of actual presentation, are highly similar. And most of the PFP collections that came out later, such as Pudgy Penguins, Moonbirds, DeGods, Solana MonkeyBusiness (SMB), Azukis, etc., used the same structural model. In addition to the artistic expression itself, in terms of design at the collection level, these NFT portfolios that once ignited the market actually have no substantial difference.
It is clear that the community is influencing and dictating the technical norms of the market, but in practice this is not a healthy way of operating. (The really good form of organization) should be that the market draws on the strengths of each community and develops in a more efficient direction. Considering that online communities can utilize and configure many innovative elements such as DeFi, NFTs, DAOs, social tokens, etc., the design space here is actually very broad.
There is a fairly common view that NFT market platforms will further verticalize. Admittedly this makes some sense, as it would actually be weird to have a domain name exchange like .eth or .sol have the same user experience as a PFP exchange like BAYC or DeGods. Marketplace platforms should be deeply optimized around the type of content they host.
But this line of thinking should not be a simple one-size-fits-all approach. This kind of reasoning can go a step further. The NFT market platform is not simply split and verticalized. What they should do is to promote community ownership and actively integrate more non-commercial functions.
Community-led NFT trading platform
Both Magic Eden and OpenSea are very rich. Where did the money come from? In fact, it is the NFT community itself, because every transaction made on the platform, the platform will extract 2-2.5% of the transaction fee.
I don't think the setting of transaction fees should be abandoned. I think the more important point is that transaction fees should not flow to third-party exchanges independent of the NFT community, but should return to the community itself. This shift is a sign of the maturity of the community. When the community and its brand are strong enough to stand on their own, it is better able to seize the opportunity to further stabilize its finances and increase brand loyalty through features and engagement tailored to the community.
BAYC is already doing this. Currently 2.5% of each transaction in BAYC will go to Yuga Labs (in addition to the 2.5% charged by OpenSea). There is no reason to believe that BAYC holders would be particularly loyal to OpenSea, on the contrary, if Yuga Labs launches a BAYC exchange where 100% of the fees flow back to the community treasury managed by ApeCoin, then there is reason to believe that the vast majority of BAYC and MAYC Transaction volume will move there quickly, and only as a function of brand loyalty and growing community finances.
The most critical problem at the moment is that third-party NFT exchanges are parasites of the NFT community, and they do not really provide value to the community (of course, price discovery around Launchpad is valuable, but this only provides value at one point in time, without persistence), and they extract value blatantly. A market that survives must provide real value, whether it's enabling players to mine insights, analytics, and data, providing potential players with a channel to discover new games, or creating a community that like-minded players can join. The NFT market must carry more, not just be a financial intermediary.
If my theory is correct, why hasn't this happened yet? I think it's because there's a lot of work and up front in dominating an NFT exchange that hasn't been fully commoditized yet.
Teams like Metaplex, Grape Network, and Reservoir are developing features to fully commoditize general-purpose exchanges. Grape Network just launched the first DAO-owned NFT exchange. While it's still very early days, it's growing fast.
Once this infrastructure becomes generally available, communities can easily host their own exchanges, and more interesting things will happen naturally.
Fake and fraudulent PFPs will have nowhere to hide. This is easy to understand. After all, if there is an official BAYC trading platform, then this platform will obviously only present real BAYC NFT works. In this case, the user only needs to make sure that the domain name he visits is okay, then it is almost impossible for him to buy a counterfeit NFT.
The community will want to embed this exchange everywhere the community gathers. For now, this mostly refers to social apps like Discord, Twitter, Reddit, etc. It is clear that Web2's social applications do not integrate NFTs correctly to support the NFT community as theoretically. And this will create an opportunity for Web3 social applications, likely to bring the prosperity of Satellite (discord of encryption native) and Farcaster and Orbis (twitter of encryption native).
NFT exchanges need to be an API-first product. There will be a single shared liquidity pool, accessible across many frontends. They will also be community-first products.
Establish a "trading platform-based" community activity space
People are very willing to hang out in various online spaces related to various communities. Examples include Discord servers, Reddit subreddits, Twitter, and Telegram, to name a few. But these experiences are incoherent. People communicate on one channel, often only to regroup on another. There is little shared state between these community instances.
There are two ways to effectively connect these spaces together: games and NFT markets. People will talk about the game outside of the game, and then get into the game and play it. Similarly, they will learn what the NFT community is doing on social channels, and then go to the NFT market to complete the transaction.
Communities cannot gather in one place forever. At the very least, there will always be a Twitter-like global flow rather than a specific community. Therefore, the community will want to embed their marketplace in products like Twitter, in addition to products like Reddit and Discord. So, on top of that, the NFT marketplaces that power these communities are API-first. It should be a marketplace that can run in other UIs.
A key question we should think about is what will the main domain name (like in the previous example, say bayc.com) mean? In my opinion, bayc.com should be the aggregator of the community event space and the main user interface of that community marketplace.
When you go to bayc.com, you should see
Trailer for a new film under the BAYC brand;
Live broadcasts from prominent community members in the BAYC Metaverse;
Highlights from recent community events and more.
Commercial elements should be naturally embedded in the entire website, and the content itself can be adaptively adjusted according to the user's interaction records on the chain and current assets.
Of all the Web2 products in vogue today, perhaps the closest to the vision I've described is Twitch. However, Twitch is not community-centric enough, and clearly not designed to scale to support the aforementioned diversity and nuance.
As the community grows, management also becomes more and more complex. And this naturally brings more challenges and more opportunities. At the same time, the truly general-purpose NFT market will naturally lose its competitiveness. After all, different communities must need differentiated and personalized presentations.
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