What happened to Nifty Gateway? How Gemini’s NFT Marketplace groped the bag

Crypto Briefing explains how Gemini’s once-beloved Nifty Gateway marketplace went wrong.

Nifty Gateway loses market leadership

Not long after I joined Crypto Briefing, in December 2020, I remember covering a story about a digital artist who was just starting to grow a fan base in the crypto art community. His name was Mike Winkelmann and he had just made over $3.5 million on his second dip on the NFT market Nifty Gateway. A few months later, the artist better known as Beeple would rock the world by selling another piece at a worldwide $69 million auction at Christie’s. That sale sent Beeple into the stratosphere and helped the vibrant creator-focused tech that was starting to take off on Ethereum go mainstream. Crypto was everywhere and NFTs were cool now.

One of the earliest to board the NFT train, the Gemini-owned Nifty Gateway benefited from the hype. It organized major drops from other artists such as Beeple and had a knack for drawing in stars from the music world who were looking to cash in on the trend. When Eminem, The Weeknd, Steve Aoki and Grimes entered the space in early 2021, they all used the Nifty Gateway to sell their wares.

But where Nifty Gateway started as the market leader, it soon lost its place on the throne. As the CryptoPunks collection began to amass after Beeple’s Christie’s sale, the market’s attention shifted to avatar-based characters that took the form of tokenized “JPEGs.” The Bored Ape Yacht Club, now the world’s largest NFT gathering, launched a few weeks later, and crypto-goers soon realized they had to rock their own PFPs to show their commitment to Web3. OpenSea, the trading venue of choice for PFP speculators, enjoyed soaring volumes as the NFT craze peaked in the summer of 2021, taking a 2.5% cut on each sale and growing in size even after a major insider trading scandal and sporadic listing errors. Nifty Gateway, meanwhile, stayed laser-focused on its curated drop strategy, alternating between showcasing new artists with big promise and celebrity cash aimed at newcomers who would disappear months later.

The marketplace could not specialize

Other trends like generative art and photography caught on as NFTs got big, but the Nifty Gateway was too slow. It stuck to its scattered listing strategy, focusing on “editions” and retail-friendly credit card purchases (more on that later). When all the celebrities had sailed off into the sunset when the crypto market crashed, it also failed to specialize. Art Blocks had the best generative artwork, SuperRare had the best 1/1s, but Nifty Gateway wasn’t the best at anything (it tried to go for the high-end market, but honestly, there haven’t been many big collections that have dropped there since Beeple).

The big winner of the boom was, of course, OpenSea. But the world’s top NFT marketplace, which had $5 billion in monthly trading volume at its peak in January 2022, operates differently than the Nifty Gateway in that it caters to the secondary market. When you buy an NFT on Nifty Gateway, you usually collect from the creator as part of an organized drop. It also has a secondary marketplace, but few if any collections gain any meaningful traction after the initial sale, and sellers face handing over a 5% plus 30 cents chunk to Nifty Gateway (most other platforms take 2.5% or less ).

OpenSea, on the other hand, lists practically everything worth paying attention to. Even if something is minted on Art Blocks, it usually appears on OpenSea minutes later. The interface makes it easy for anyone to list their assets at a set price or accept bids, which helped boost secondary trading volumes on all the major pools. Unlike the Nifty Gateway, it also recognized the growing demand for NFTs that were not minted on Ethereum.

User experience issues

It’s not like Nifty Gateway is the only marketplace that lost out to OpenSea, but I was reminded why it failed this week when I tried to buy an open release from one of my favorite new digital artists. This was a special drop that required owning one of the artist’s pieces to participate. First I had to login with my Ethereum wallet or email login to prove I was a holder and then I would be able to buy. I prefer to use ETH as a payment method over fiat cards, which also meant I had to fund Nifty Gateway’s prepaid wallet linked to my account (direct ETH payments have been promised “coming soon” for months now).

Once I was logged in and had ETH deployed, I had to participate in the auction within a set time window. I ran into trouble here because it told me it would only accept a “global bid.” I spoke to the artist and they told me the auction was extended due to technical issues. The next day, when I came back to buy the piece, the purchase appeared to go through, but it still didn’t show up in my wallet. Customer service told me this was normal and my purchase was confirmed, but there was no way to check it on my dashboard and it still doesn’t show up 24 hours later. The MetaMask login icon is also failing so I can’t even access my account without my email and password. When I come in and the NFT appears, I have to move it out of the Nifty Gateway to store it with my other NFTs.

With so many user experience issues, it’s easy to see why Nifty Gateway is no longer a major player in the NFT market. The platform rarely shows what the market actually wants, and when it does, you can’t even buy or trade the drop without getting into trouble. To any creators considering hosting their work on the platform, I would encourage you to look elsewhere if you can. For the collectors and flippers, I’d say you’re better off with OpenSea or a more decentralized option like LooksRare where you can buy and trade almost anything without enduring long waits and customer service chats—but you probably already know that anyway. “We will not rest until 1 billion people collect NFTs,” claims Nifty Gateway on its website. And they are right to have convictions; NFTs may well hit 1 billion users in a decade or two. It’s just that no one wants to collect them in their clumsy marketplace.

Disclosure: At the time of writing, the author of this piece owned ETH, some Otherside NFTs, and several other cryptocurrencies.