If you’re looking to buy or sell an NFT, there are nearly a dozen mainstream options available to you today. To an outsider, they all look the same, with their homepage walls made of square cartoon characters.
However, there is an evolution from the standard buy and sell marketplace – OpenSea, X2Y2, LooksRare – to models that try to make NFT trading more cost-effective through innovative solutions. In this article, we explain the three most important new technologies: aggregation, collateralization and tokenization.
What are General and Art NFT Marketplaces?
A general marketplace is a platform that sells a wide range of NFTs. An art marketplace hosts a curated selection of vetted artists and collections. Unlike a general marketplace where anything goes, art markets use curation to give their platforms the desired aesthetic.
Most NFT trading markets allow trader A to sell his assets at a certain price. If trader B is willing to pay that price, the trade takes place. This behavior is commonly referred to in the market as the “buy now” approach. OpenSea, LooksRare, X2Y2 and SuperRare trade on this fixed price basis.
Another method is to bid with other buyers, just like in a traditional auction market, and the highest bidder gets the NFT asset. Open sea is an example of such a marketplace.
In both cases, buyers have to pay gas fees for transactions and lack of liquidity makes NFT trading inefficient.
What are NFT Aggregators?
A persistent problem in the NFT market is that too much time and fuel is invested in purchasing multiple NFTs.
Not to be outdone by the fast-growing trend of the NFT marketplace, OpenSea, the top trading marketplace, announced on October 5 that it officially supports bulk listing and buying functionality, allowing users to now list up to 30 items in one go can list and buy single transaction on OpenSea.
According to the data, while OpenSea has integrated bulk buying of a single collection, making life easier for less active traders, however, serious NFT traders will still find it tedious (and expensive) to transact when trading on all these different marketplaces.
The story goes on
Footprint Analysis – Daily active OpenSea users
The GEM, Genie, and Element marketplaces are new platforms that combine multiple marketplaces. Instead of comparing prices on different websites, aggregators have all the data in one place and can shop in one place too. This allows NFT enthusiasts to save time and money (in the form of gas fees) when purchasing multiple items.
Additionally, GEM (though not Genie yet) accepts any ERC-20 token as a form of payment. This allows users to make a payment using a variety of corresponding tokens of their choice.
What is an AMM NFT marketplace?
Sudoswap is an on-chain decentralized NFT exchange that uses the AMM model.
An AMM (Automatic Market Maker) in DeFi refers to a spread Asset trading pool that allows users to seamlessly trade cryptocurrencies using their liquidity.
The mode of operation of AMM differs from the traditional order book transaction mode. Both parties of the AMM transaction interact with the on-chain liquidity asset pool. Liquidity pools allow users to switch between on-chain tokens seamlessly and fully decentralized and without custody. Liquidity Providers (LPs), on the other hand, generate passive income through transaction fees based on a percentage of their contribution to the asset pool.
NFT tend to be volatile because they lack liquidity and Sudoswap brings some of DeFi’s features to the NFT market.
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Users can buy or sell from different pools of the NFT collection
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Pools can be bought or sold to different users
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Users can create NFT liquidity pools with ETH within the same pool
What is NFTX?
NFTX Here users can collateralize and tokenize their NFTs, which the platform hopes to solve the liquidity problem in the NFT market. An NFT holder can transfer their digital assets into a vault and mint fungible tokens (vTokens) representing the value of the NFT. For example, a CryptoPunk NFT mints a corresponding fungible CryptoPunk vToken.
Users selling NFTs on NFTX are equivalent to minting an ERC-20 token and paying a 10% minting fee, which they can exchange for ETH on SushiSwap. The tokens are fungible, ie There is sufficient liquidity in the NFTX pool. To remove the NFT from the vault, a user must escrow a removable vToken.
Crucially, a user can easily trade their NFTX token for another on one DEX, essentially bypassing the more lengthy and expensive process of trading one NFT for another on a marketplace.
Summary
NFTs are blockchain tokens but don’t act as such – they are illiquid and inefficient to trade. Several new models of NFT marketplaces have emerged to solve this problem and make trading NFTs smoother.
This piece was contributed by Footprint Analysis community.
The Footprint Community is a place where data and crypto enthusiasts worldwide help each other to understand and gain insights from Web3, the Metaverse, DeFi, GameFi or any other area of the emerging blockchain world. Here you will find active, diverse voices supporting each other and driving the community forward.
Oct 2022, Vincy
Data Source: Footprint Analytics – NFT Marketplaces
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