OpenSea's Trouble: Yuga-Magic Eden NFT Marketplace

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Good Morning. The market remains upward as Aave pauses certain assets on V2 and V3 due to reported issues — no funds are at risk, but we can see from lending protocols’ stablecoin yield that appetite for leverage is coming back.

In Today's Email:

• What Matters: Yuga NFT marketplace 🛒

• Products: Web3 contest rewards platform 🎁

• Charts: Nike $1.4B NFT volume, Across bridge market share 📈

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WHAT MATTERS

Yuga Labs-Magic Eden NFT Marketplace

State of play: Magic Eden, the Solana-based NFT Marketplace, and Yuga Labs announced their partnership to launch a marketplace for Ethereum NFTs that honors creator royalties.

• The new marketplace is set to launch by the end of 2023.

• One year ago, Magic Eden announced it would make royalties optional.

• Yuga Labs announced in August that it will cut ties with OpenSea by February 2024 over OpenSea’s shift to a royalty-optional model.

Hours before the announcement of the Magic Eden and Yuga Labs partnership, OpenSea’s CEO announced that it was cutting half of its employees to make big changes to focus on building “OpenSea 2.0.”

• Devin Finzer, the CEO of OpenSea, said that they've heard feedback from users that the company felt like more of "a follower, not a leader."

• OpenSea's market share has dropped from over 73% to 18% since October 2022, as competitors like Blur.io gain ground.

What’s next: Will the creator-centric NFT marketplace win over the consumer-centric marketplace and reverse the falling trading volume of the Ethereum NFT marketplace?

Our take: NFT marketplaces push for low or no creator fees and incentivize whales to do transactions to drive their trading volume. i.e., pseudo-wash trading to drive volume. They are slowly killing themselves and the industry.

• OpenSea’s reduction in fees and making creator fees optional have not been successful in challenging Blur's market lead.

• Whales are driving Blur’s NFT trading volume by using its bid pools to farm token rewards. Not because of the low fee.

• In 2022, CryptoSlam estimates that LooksRare generated more than $8.3B worth of wash trades, most of the wash trading comes from royalty-free collections.

For builders and investors: It is not looking good when the reward of using or buying a product is more intriguing than the product itself.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 100 smart crypto investors' wallet addresses 👇

PRODUCTS OF THE WEEK

JokeRace, a Web3 Contest Rewards Platform

The best way for communities to make, execute, and reward decisions. JokeRace is a Web3 contest platform for communities to make, execute, and reward decisions.

• JokeRace is adaptable for competitions, including hackathons, awards, prediction markets, DAO governance, and more, allowing submissions and community voting.

Last week, JokeRace enabled contest makers to monetize their contests by adding entry charges for the participants of their contests.

• The entry charge is set to a minimum of 0.00069 ETH on major chains and will be split between contest makers and JokeRace.

• JokeRace claims that the entry charge is a form of bot protection.

• JokeRace launched the entry charge on ten major chains including Ethereum, Arbitrum, Base, Polygon, and Gnosis.

Other cool products:

• Visibull, a copy-trading platform.

• Qoinpal, a fiat-to-crypto exchange platform.

• HeroSwap, an instant anonymous cross-chain swap for crypto

• CellarDAO, a blockchain-powered wine & spirits investment community.

CHARTS OF THE WEEK

Nike-RTFKT NFTs Near $1.4B in Trading Volume

State of play: Since December 2021, NFT collections from Nike-RTFKT have driven approximately $1.4B in trading in the past two years.

RTFKT, which has multiple NFT collections listed above, was acquired by Nike in January 2022.

• RTFKT's over 24 collections, such as the late 2021 CloneX-Takashi Murakami NFTs, have earned ~$170M, per DefiLlama.

• Lebron James is one of the Nike-RTFKT collectors.

• The Dunk Genesis Cryptokicks forging event from Oct. 18-30 spiked related NFT trades to $613K for the month, as per CryptoSlam data.

Our take: This is one of the best implementations of NFT for provenance purposes. Nike-RTFKT's NFC tags link shoes to NFTs via smartphones, confirming their authenticity and ownership.

Across Protocol Gains 50% Market Share

State of play: Across protocol, a cross-chain bridge for L2s and Ethereum, saw a volume of $450M in two months, with its market share rising from 10% to 22%, with zkSync Era being a major driver.

• Across utilizes UMA’s optimistic oracle for its cross-chain bridge, enabling <1 minute transfer times.

• On the other hand, Stargate still leads in terms of volume share with more than 40%, although its volume share continues to decrease.

Our take: Making cross-chain transfers as easy as possible is paramount as the number of L1 and L2 blockchains increases.

QUICK BITES

• CoW Swap proposes adding fees.

• OpenSea cuts half of its employees.

• Bitfinex suffered a 'minor' phishing attack.

• Hong Kong considers allowing spot crypto ETFs.

• US Supreme Court agrees to take up Coinbase case.

• FTX seeks court approval to sell $744M worth of assets.

• Arbitrum DAO leans towards majority approval for ARB staking.

• BitGo and Copper combine crypto custody settlement networks.

• Magic Eden and Yuga Labs launch an Ethereum NFT marketplace.

• Aave pauses operations as a precautionary measure - no funds at risk.

NOTEWORTHY READS & MEME

• Balaji’s read on crypto Twitter found SBF’s fraud.

• Our Network’s read on crypto bridges mega issue.

• Ethereum Attestation Service’s read on relative trust networks.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.