Published: July 6th, 2022
Coinbase NFT, the cryptocurrency exchange’s NFT marketplace, is adding new features in hopes of expanding its small-ish base of crypto traders.
A number of enhancements have been rolled out since the public beta launched in early June, including a ‘like’ button, a ‘bulk manage’ dashboard, quick editing of list prices, upgraded trade analytics, and notifications. Coinbase has also added a time-delay function for new listings, a Facebook-like feed for follower news and activity, and the ability to link ten crypto wallets to a one Coinbase NFT account.
Despite all those features, a critical mass of NFT traders has yet to materialise. Not even a temporary suspension of Coinbase transaction fees has been enough to pull in the punters.
Figures from NFT data specialists Dune Analytics suggest Coinbase NFT has so far attracted roughly 8,200 unique buyers and sellers since launch. At time of writing there had been 20,675 transactions for a total trading volume of USD 2.8 million, or 1,457 ETH.
Compared to other NFT marketplaces, Coinbase NFT is barely treading water. OpenSea, the top NFT marketplace, posted a trading volume of USD 15.5 million ion Thursday (30th June) alone. It boasts around two million registered users who have completed at least one transaction using the marketplace.
Coinbase isn’t ready to throw in the towel yet, however. Development looks to be ongoing, regardless of Coinbase’s recent bout of layoffs and the broader crypto bear market.
Response to the marketplace’s new features on Crypto Twitter has been mixed, with some expressing worries about recent allegations that Coinbase has been selling user data (Coinbase denies the accusation), while others said the exchange botched the launch of its NFT marketplace.
On its first quarter earnings call in May, Coinbase CEO Brian Armstrong called Coinbase NFT a ‘Web3 social marketplace,’ inferring that success or failure can’t be assessed by on-chain metrics alone.
Right now, he said, Coinbase NFT is focused on ‘getting the product right’ and attracting users. Monetizing them profitably will come later.
‘We aren’t obsessing over volume and transaction numbers,’ he said, though figures on user numbers, activity, and transaction growth were not forthcoming.
‘A lot of users on the platform are simply interacting with peers and counterparties, which is driving-up engagement through the use of social features. We're still early in beta with more new features in the dev pipeline. We want to keep giving the community reasons to use those features and make the marketplace more social than competitors.’
In the earnings call, Armstrong added that he was actually ‘very content’ with Coinbase NFT’s results to date and discussed adding support for more blockchains in the future. But how much cash is the exchange willing to commit to its NFT marketplace given the current crypto market turmoil?
Coinbase President Emilie Choi told investors and investors that the company had devoted ‘less than 10 per cent’ of the company’s total budget to Coinbase NFT
That begs a question: as the broader crypto market weathers its latest crash, how will non-fungible tokens fare? So far, so good. The NFT market surged in late 2021 and has kept attracting buyers well into the first half of this year.
On March 17th, secondary market sales of the Bored Ape Ethereum NFT collection jumped to nearly USD 20 million in a matter of days. The surge happened on the back of news that Yuga Labs, makers of the phenomenally successful Bored Ape Yacht Club collection, had agreed to buy the IP for rival developer NFT house Larva Labs’ CryptoPunks project. As the news went viral on social media, CryptoPunks NFT sales headed skyward.
Analysts said at the time that NFT buyers were rushing in reap a windfall on their CryptoPunks purchases. Yuga Labs told the press it was going to hand over IP rights for CryptoPunks images to their respective holders, a move choing its ownership approach for the Bored Ape collection.
CryptoPunks owners had complained in the past that Larva Labs gave them conflicting information about how much freedom they would have to trade their NFT images, so a level of pent-up demand may have been behind the secondary market surge.
In addition to spiking sales volumes, the price of the least expensive CryptoPunks image rose by eleven per cent on the news, touching just over 76 ETH in price, about USD 193,000.
Then on 16th April, sales of the Moonbirds Ethereum NFT collection from VC and tech entrepreneur Kevin Rose passed the USD 280 million mark.
The Moonbirds profile picture collection encompasses 10,000 images in total, each with a set of features generated by a randomizing algorithm to ensure uniqueness, a design approach similar to both the Bored Ape Yacht Club and CryptoPunks collections.
Developers the PROOF Collective released 7,860 ‘Moonbirds’ into the NFT market through an allowlist created using an online lottery. Moonbirds NFTs distributed through the allowlist were fetching roughly 2.5 ETH or USD 7,500 at the height of the 16th April buying frenzy.
Another two thousand Moonbirds were distributed to users with a PROOF Collective NFT membership pass for ‘free’ (the pass cost 95 ETH or USD 280,000). Only one thousand passes were offered to the public, with each holder allowed to mint two Moonbirds.
Secondary market sales of the pixelated fowl continued to surge in the days following. According to numbers from Dune Analytics , OpenSea achieved an all-time-high one-day trading volume figure on the following Saturday, reaching USD 175 million in ETH transactions.
At time of writing the current floor price for a Moonbirds NFT is 24.49 ETH or about USD 26,000 at current ETH valuations.