Decentralized NFT transaction protocol will defeat opensea

Abstract ：

De centralization NFT The transaction agreement is for NFT Market, Like AMM To DEX.

NFT The core needs in the transaction are liquidity and price , therefore NFT The real moat of the exchange should be based on the liquidity and price advantage when selling commodities .

The pattern changing aggregator is only used as the front-end traffic inlet NFT The problem of dispersing pending orders , The liquidity problem has not been fundamentally solved .

It is not the next exchange or aggregator that is most likely to solve the liquidity monopoly , Instead, it can support the protocol of sharing pending orders , So as to break NFT Tool platform and NFT The boundaries between exchanges , So that each traffic front end can become a trading platform and share its pending orders , Form decentralization NFT Trading Ecology , solve NFT The dispersion and liquidity of pending orders .

Coin circle one day , A year on earth , And in the graph circle , Maybe it's just mint After 1 Hours .NFT Fanaticism and FOMO, It is far more crazy than any other market , As an infrastructure NFT exchange , It has also experienced several spring and autumn cycles , There are few left , It is because most exchanges have not been able to meet the needs of the secondary market NFT The parties involved in the transaction （ Here's the picture ） The needs of , Instead, they cling to false demands to seek a break . So I will try to analyze NFT The demand of trading and the change of trading place , To explore better solutions for the future .

One 、 Market environment and user demand ：

At present, the mainstream transactions are NFT It can be divided into blue chip and non blue chip , Non blue chips can be roughly divided into three categories ：PFP、 Functional and other special types .（ Individual blue chips also belong to functional or special types ）

For blue chip , Because of its high price , And most blue chip holders prefer diamond hands , So the requirement for liquidity is not so high , Instead, they pay more attention to price .Pass Card and Gamefi This functional model with practical application scenarios NFT, The demand for liquidity is also small , So it is more price oriented . But on the market 90% The above NFT They are all small pictures without power , In essence, it is a game of beating drums and passing flowers , This requires very high fluidity . here , Users will choose to use the most liquid exchange OpenSea Instead of choosing anything else . Other special kinds of NFT, There are no application scenarios and requirements for the time being , For the time being, the market still revolves around PFP Mainly , So it is not meaningful to discuss .

thus , We can get the demand from both the buyer and the seller. Finally, it falls to two points ： Mobility & Price  （ Here's the picture ）

Two 、NFT exchange —— Build your core competitive advantage to meet your needs

We need to explore what kind of exchanges are excellent , Discuss from the following five dimensions ：

• brand

Most exchanges are seriously homogenized , The core barrier is the traffic brought by the first mover advantage , Form brand effect and positive circulation .OpenSea Use it to attract most NFT Market liquidity , Form a moat .

• Number of trading users

stay NFT When the overall number of users in the market is small （ lately 2022 year 5 month Top10 Total daily life of the platform shall not exceed 100K）, Who has more users will be able to seize the market and say .

• Trading volume

Users are also divided into high-quality users and non high-quality users , and The transaction volume contributed by high-quality users may be dozens or even hundreds of times that of ordinary users , So now the giant whale dominates the market .

• New users and transaction growth rate

at present NFT The market still belongs to a market with obvious Matthew effect , Therefore, we pay attention to the new users and the growth rate of trading volume, which can directly see the future development of the exchange . future NFT The market is a huge incremental market rather than a stock market .

• Distribution of benefits

Through the medium of token , All participants and platforms in the bilateral market have become a community of interests , Use tokens to motivate the holders , Instead of cutting the interests of users and themselves as traditional platforms do to earn more benefits , It can win the trust and support of users . The platform will gradually evolve into a more user-friendly form , The speed of evolution varies according to the industry .

From the above five points, we can get ： at present NFT The exchange is going to break up , We must take the two paths of vertical track and wealth effect

• The first mover advantage of the brand is huge , It also makes OS enduring , But there are still rising stars who can cut into the market vertically

SuperRare At the beginning , The starting point is the artist's NFT, Its strict invitation system has created a high-end brand image , and NBA Top Shot The starting point of the game is basketball NBA Such a special group , So it gets a lot of exposure . But what we need to pay attention to is , If you choose a vertical track , Maybe you can only build your core advantage on that track , Is not enough and OS Antagonistic , And now NFT The world is still in its early days , Too few users , There is no way to support a narrow vertical track , This is also 2021 Some of the hottest years NFT The main reason why exchanges are now disappearing .

• Besides cutting into the vertical track , Another more feasible way is to take advantage of the wealth effect .

Web3 One of its characteristics is that it can change the distribution of profits , And this is also OS A controversial point , Unwilling to cooperate with Web3 Users share the results .LooksRare By starting “ Vampires attack ” And trading mining patterns , And combine the giant whale and KOL They started their journey from top to bottom , Although it has been criticized for false trading , But in the end, the tiger also snatched the food ; and X2Y2 Also by starting “ Vampires attack ” And the mining mode of hanging orders , Joint community efforts from the bottom up , Although the middle of several code twists and turns , But in the end, he also succeeded in getting good results , Even more recently Looks Become the second largest exchange in the world .

From the successful cases of two Challenger rookies , At the initial stage C End user incentives are essential , Or it is to win over the top KOL And the whales on the platform , Or it is to win over the people at the bottom and use the community for publicity , The two models have finally formed a certain influence in their respective fields , Instead of just being confined to a certain group and a small circle , Finally, they gain a lot of transaction volume and new users , Then slowly put the whole NFT The cake in the market is bigger . In the process , They are willing to give their cake to supporters and participants in the ecology , adopt web3 Token to link everyone up , So we can finally attract supporters respectively . Human nature is profit seeking , If there is no reasonable incentive mechanism , No one wants to try a new exchange , This is one of the key factors why they can challenge success .

3、 ... and 、NFT Tools —— The inflection point of changing the competition pattern

With more NFT The emergence of exchanges ,NFT Hanging orders are scattered in various exchanges , The core demand of users is to buy the cheapest NFT, Then the aggregator was born , Also became this NFT The unexpected winner in the exchange war , Changed the market structure .

It may not be another desktop that beats the desktop , But more convenient and efficient notebook computers and mobile phones .

Genie and Gem On line , It meets the needs of players for multi market shopping , It is convenient for users to find the cheapest NFT, And combine small platforms to form a positive cycle （ Here's the picture ）. At this point, the exchange becomes the back-end for providing orders , The aggregator is the front end of the interaction , Both sides have added users . Users have bought cheaper on the aggregator NFT, More users will come to the aggregator ; Small platform users because NFT Increased liquidity , They are also more willing to use small platforms because they save money , As the number of aggregators and other platform users increases ,OS As a leading monopoly, the liquidity advantage has been gradually broken , This will further accelerate the development of other platforms and aggregators . That's why X2Y2 and Looks as well as Gem and Genie this 4 The reason why the home platform can achieve results .

But other established platforms are not so lucky , for example Rarible and Foundation. Because it was born at the wrong time , At that time, there was no aggregator platform that could occupy the market , This makes most trading platforms a flash in the pan or even die prematurely , There is no way to gather the strength of everyone to fight OS; In addition, the company did not successfully advance to the whole category in the process of transformation , Product change is too slow , Can't keep users , Eventually, it will only gradually lose market share due to liquidity problems , fall into OS Of “ Flywheel effect ” in .（ Here's the picture ）

therefore , The aggregator is this kind of NFT The trading tool platform has become NFT The new favorite of users , Break the liquidity monopoly , And reshape the competitive landscape , Under the forward loop of the aggregator ,Top3 Exchange and 2 Home aggregators have occupied 99.7% Market share （ hypothesis Top10 Of the total market ）, And one of OS Only occupied 63.5% Share , Broke the myth of invincibility .（ notes ： Not eliminated Looks and X2Y2 The impact of existing volume trading ）

Resource: 2022/5/31 https://dappradar.com/rankings/protocol/ethereum/category/marketplaces

（ notes ： The above data will Gem and Genie Data of are listed separately , It is not included in the data of the exchange ）

Four 、 Imagine the future ——NFT A possible solution to the deal ： True decentralization NFT Deal agreement

After analyzing NFT The real pain point in the transaction is the brand effect after the liquidity monopoly , We might as well imagine what is the solution that may overturn the future competitive pattern ？ Here I give a kind of thinking is ： Instead of being an upstream traffic port , It is more feasible to make the underlying agreement .

First , It can be seen that the market already has this trend ,OpenSea Official at 2022 year 5 The decentralization agreement launched in May Seaport Protocol, Want to NFT Trading markets have become more decentralized , Its main features are shown in the figure below ：

Essentially ,Seaport It's just lower NFT The threshold of the exchange , Make most platforms easy to build NFT exchange , And not be OpenSea Wait for the original exchange to coerce , But it doesn't solve NFT The problem of transaction liquidity , So the core requirements still exist .

The function of barter will not make the poor liquidity NFT Become more liquid , It just makes users have one more choice . In fact, this function has been implemented by platforms for a long time ：NFT Protocol (https://app.nft.org/ethereum) （ Here's the picture ）, But its utilization rate is very low , Little market share , Prove that the requirement is just a beautiful pseudo requirement .

Use ERC-20 The token is not limited to ETH payment , There are quite a number of supporters in the market , This is closer to the shopping habits of traditional users , Good NFT New people . I think this is really an innovation , But technically , The threshold is not high , Lack of core competitiveness . Existing NFT Exchanges can be updated iteratively very quickly , The reason why there is no change is that the demand has not been verified by the market .（NFT Protocol It also has this function , But the performance is still poor ） And this also explains why the traditional currency circle exchange is not successful in entering the chart circle —— The person in the circle is ETH The idea of currency standard , The standard of the coin circle is mostly USDT Wait for the stable currency , This is also NFT One of the moats of the exchange itself . however , We look at it in a changing light NFT It's an incremental market , Suppose that a large number of people in the coin circle enter the circle , So without such a transformation ETH The step of the exchange will be more favored by the market ; Plus the current ETH In a bear market decline , that NFT It also fell with it , The demand for using stable currency for settlement is increasing , So take a positive attitude towards this function .

With Seaport For inspiration , I think only True decentralization NFT Deal agreement （Decentralized NFT Protocol) It can fundamentally solve the liquidity problem . It makes the front end of traffic in every market, whether it is an exchange, a tool platform or even a project party , Be able to become an exchange by yourself , Then share the list of each subject , In this way, they jointly form the front end of this decentralized trading ecosystem , Make every order have equal opportunity to be seen and purchased .

Its main core is as follows ：

• Order sharing mode

The order sharing ecology enables each pending order to appear on multiple platforms at the same time .OpenSea Take advantage of the first mover advantage to monopolize most of the orders , Other platforms have not formed their own ecology to fight vertically and horizontally , On the contrary, each of them occupied its own territory , Users' pending orders are not shared , This greatly weakened NFT Liquidity of pending orders , Not what users want to see . So if we can from the technical level , For example, from the protocol layer （Protocol） send NFT The pending order itself can be shared on multiple platforms , Then I believe users will be more willing to try these small platforms , Because a little makes a lot , It can also form sufficient liquidity .

A practical example is Gem and Genie Appearance , This has changed the competitive landscape . People prefer to use such aggregators rather than a single platform , Because the pending orders of multiple platforms have value , But the platforms are not interconnected , That's why there are so many people who can view different platforms at the same time NFT Demand for pending orders . and Gem and Genie It is at this point , Put forward the solution , Solved the pain , Reap the benefits of users . however Gem and Genie Our solution still depends on OpenSea Etc NFT trading platform ,API The interface may be coerced by the platform , The refresh speed of orders will also be controlled by others , It is difficult to achieve real-time update .

To further improve the aggregator pattern , It is better to be the bottom layer of the exchange than the upstream of the exchange , Multiple platforms can be shared when listing , In this way, users do not have to switch back and forth , Any platform has the same pending order ,NFT Liquidity will also increase . also Solved the risk of being coerced by the large platform , It can unite small platforms to jointly resist large platforms ; At the same time, it has also solved the liquidity problem of a considerable part of long tail assets hanging on small platforms , Quite at that time Uniswap The possibility of .

• Co construction of ecological composability —— Break the boundary

current NFT transaction , It is still limited to NFT exchange . There are many excellent NFT Tool platform , Suffering from no way to realize , Number of empty users , But when a customer finds something through a tool NFT Alpha after , In most cases, you can only jump to a certain trading platform with one click . The tool platform can only provide free traffic import interfaces , Make a wedding dress for others , But if you make NFT The tool platform can also trade directly NFT, Get a share of the profits ,NFT The efficiency of the transaction will be greatly improved .NFT The tool platform itself no longer needs to find a new realization mode , The flow can be realized through the transaction service fee , Make the ecology form a complete closed loop , It is conducive to the benign development of the tool platform .

Combined with the first point “ Order sharing mode “, Because most tool platform users are also NFT user , Then the liquidity of orders will be greatly increased in combination with these flows , Thus enriching the ecology . Instead of separating the exchange from the tool platform , This is unfair to the tool platform , They should get a share of the income after they guide the exchange , However, at present, the exchange has not given tool platform rewards for the credit of this part of traffic , So this also solves the needs of the tool platform . from Uniswap Acquisition Genie It can also be seen that , The future traffic platform will enter NFT World time , Traffic + The model of transaction agreement may be a better way to combine .

• At a low price

There is still room to reduce the handling charges .OpenSea The handling charge is 2.5%, From the path of rising stars, we can see , The lower service charge will be sought after by the market , for example X2Y2 At present, only 0.5% The handling charge , And that's a lot of PFP Short term speculation is one of the reasons why players firmly choose this platform . So the future solution is more likely to cut in with a lower handling fee , Give players more profits , Will give people the motivation to try new solutions .

• Protect royalties

The right of the current royalty setting is delegated to the platform layer , Therefore, if the project party wants to collect the full copyright fee, it needs to go to each platform to set its own royalty , And this is obviously troublesome . But through the mode of sharing pending orders , The royalties set by the project party will be directly synchronized to multiple platforms , Don't worry about missing royalties , This is a great benefit to the project side , This will also urge them to switch from the original platform to a new platform for setting up and encourage their users to register .

I believe that after achieving the above points , There will be new players who will subvert the existing competition pattern , We'll see .

5、 ... and 、 Conclusion ：

about NFT For the exchange , People are always envious of its broad market and the market share of a single exchange , So many people rose up , One after another with the help of the shell of pseudo requirements to draw one after another big cake . At last the tide receded , Just know who is swimming naked . if 2021 Year is NFT The first year of the market boom , that 2022 The year is NFT A turbulent year of market competition , Only in the current environment can we grasp the core requirements , To go against the current in the bear market , Waiting for the bull market to bloom . Give Way OpenSea Fear is not the next trading platform , Instead, it is an aggregator that addresses liquidity requirements Gem; And the next subversion Gem And the trading platform may not be the next aggregator or trading platform , It may be a solution to the liquidity problem at a deeper level in the protocol layer —— De centralization NFT Deal agreement