Warning: the following article contains lots of annoying, meaningless words.
Cryptocurrency (I warned you) company Coinbase has waded into the NFT industry, launching a new online marketplace to trade digital tokens.
Despite my cynicism, this has been a long-awaited move. Coinbase are an incredibly wealthy company. Their crypto exchange app has amassed 89 million users and their new marketplace could pose a serious challenge to OpenSea – the platform currently dominating the NFT landscape.
In the launch (before the site arrives later this year), Coinbase emphasise the importance of social community on their new site, seemingly keen to capitalise on the controversies OpenSea have been embroiled in recently. The most recent, and perhaps most profile, is owners of the popular Bored Ape Yacht Club tokens suing OpenSea over ‘stolen NFTs’.
“This product is more than just buying and selling,” Sanchan Saxena, VP of product for Coinbase, explained. “It’s about building your community. It is about making sure that you can connect and engage with them on the platform.”
The potential here is, admittedly, huge. NFT buyers and sellers – much like crypto buyers and sellers – are a tight-knit little community. That is the reason people like me, on the outside of the market with no desire to get in, are so dismissive and rude about them (that and the fact they’re stupid). If Coinbase can successfully create a platform that not only allows NFT transactions, but fosters NFT conversations, members of the community will flood.
With members, comes money. NFTs are now a $40 billion market, according to Chainalysis. Coinbase themselves estimate that as recently as 2020, NFTs had a valuation of a miserly (in comparison) $338 million.
One of the largest issues currently facing NFTs is fraud. Coinbase’s new site will verify the authenticity of collections verification badges, relying on users and the community to report fake tokens. I don’t entirely see how users can tell, otherwise they wouldn’t be getting scammed at the moment, but we move…
No initial transaction fee will be in place on the site, as they hope to lure business away from OpenSea, however a ‘single digit’ figure will be taken from transaction further down the line.
Back to the real world…