Competition across the top NFT platforms have been heating up this year – we take a closer look at market share across the Top 5 NFT marketplaces: OpenSea, MagicEden, x2y2, CryptoPunks and LooksRare.
OpenSea continues to lose market share amidst the bear market, declining 67.4% YTD
OpenSea, which was previously the leading NFT marketplace back in January 2022, sees its lowest monthly trading volume in September 2022, with its market share declining by 26% YTD. With all the NFT marketpace developments on Ethereum, it is unsurprising that OpenSea continues to lose market share across the Top 5 NFT marketplaces. That said, it still remains as the dominant player monopolizing with 66% market share.
In relation to the other four NFT marketplaces, OpenSea’s market share has steadily dropped from 89% in March to plateau around the 70% range since May 2022, before dipping further to 60% last month.
MagicEden captures 22% market share, with its growth reflecting Solana NFT’s mainstay
MagicEden gains ground on OpenSea in Q3 2022, and is a significant contributor leading to OpenSea’s declining market dominance. It has doubled its month-on-month (MoM) volume, jumping from 11% to 22% market share in September 2022, while the rest of its competitors saw a decrease in market share. This can be attributed to its recent foray into Ethereum and the coveted y00ts launch.
Interestingly, Magic Eden is not the first NFT platform on Solana. Solanart launched in June 2021 and was very popular at the time. MagicEden launched three months later on September 2021 and had to overcome the first-mover advantage. With a better user experience and website performance, on top of some eye-catching capital raises, Magic Eden quickly outpaced Solanart, growing by 236% in 2022. This is in spite of OpenSea’s expansion to Solana in April 2022, which has negligible trading volumes in Solana NFTs when compared to Magic Eden.
Due to the lack of perceived cultural value and relevance, it is somewhat rare for NFTs outside of the Ethereum ecosystem to establish any level of mainstay. Yet, Solana has managed to break the mold, and have successfully built a cultural moat of NFT communities and projects, with Magic Eden fronting it.
Wash trades on LooksRare and X2Y2
Wash trading is a common phenomenon on NFT platforms that rewards traders with their native tokens. LooksRare ($LOOKS) and X2Y2 ($X2Y2) have the second-mover advantage against OpenSea, and in order to attract users onto their platform, tokens are rewarded to traders based on the percentage of volume traded. In normal circumstances, this method is not cost-effective due to platform trading fees and royalties; however, specific collections have no royalties, making it financially feasible if the value of tokens earned exceeds the fees.
Accounting for these wash trades, LooksRare peaked in May 2022 with 10% of the market share, but has since declined by 63% to command just 3% of the market. At its peak, LooksRare was the only alternative to OpenSea that executed a vampire attack on OpenSea users; however, LooksRare has been losing market share after X2Y2 materialized in April 2022 with a similar strategy, but with lower trading fees.
X2Y2 sees steady growth, with 11% market share by Q3 2022
Trading volumes on newcomer NFT marketplace X2Y2 remain impressive (even after discounting wash trades) – X2Y2 has been steadily growing since its launch in February, and has since acquired an 11% market share at the end of Q3 2022.
A few factors have propelled X2Y2’s growth – first, the growing popularity of NFT aggregators like Gem and Genie allow buyers to purchase NFT collections across different marketplaces in a single transaction. Added features like rarity rankings and cheaper gas costs are also attractive and can turn users marketplace-agnostic.
With a simplified user experience, price (sale fees) becomes the most critical consideration. x2y2 is currently the cheapest on Ethereum, with just a 0.5% sale fee (the fees were lowered in July). Compare this with OpenSea at 2.5% and MagicEden and LooksRare at 2%. Other platforms allow creators to dictate their royalty fees.
|NFT Marketplace||Sale Fees|
In August 2022, x2y2 undertook a controversial decision to remove royalty fees for collections, giving buyers the choice of whether to pay royalties or not. This came about after Sudoswap’s launch in July, a decentralized protocol that allows users to buy/sell NFTs through an Automated Market Maker (AMM) and bypass royalties.
CryptoPunks maintains its relevance with a consistent 3% market share
Having established itself as a blue chip, CryptoPunks’ trading volumes (and thus value) continue to exceed most collections. On average, they make up 3% of the monthly market share, which is impressive for a standalone project – going as far to make up 50% of the Top 10 Most Expensive NFTs ever sold.
It is worth noting that unlike most collections, CryptoPunks is one of the rare few with their own native NFT marketplace because of their different smart contract logic (not purely ERC-721).
The Top 5 NFT Marketplaces (OpenSea, Magic Eden, X2Y2, CryptoPunks, and LooksRare) are derived by total trading volume, excluding wash trades, using data from Footprint Analytics.
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Curious to know out more about the crypto landscape? Read our Q3 2022 Cryptocurrency Report.
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Julia leads Growth at CoinGecko and is passionate about onboarding more women onto Web3. That said, she is generally poor at timing the market, so she DCAs for safety.
Follow the author on Twitter @ngxinyajulia