6 NFT Marketplace Tokens to Watch
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Not all tokens associated with NFTs are non-fungible. For every ERC-721 used to denote virtual land, PFPs, armor, or other in-game items, there is a fungible ERC-20 or SPL used alongside it. Whether for governance, in-game currency, covering trading fees or selling P2P marketplaces, fungible tokens are essential.
Over the past 12 months, a number of existing NFT projects have introduced a native token, while others have launched with a fungible token in place from day one. This is particularly true of NFT marketplaces, which form a main artery at the center of this rapidly developing industry.
While OpenSea has yet to go down the tokenization route, many of its rivals – both on Ethereum and other chains – have had no qualms about deploying a native resource. And on the face of it, there are many arguments for issuing a native marketplace token. When properly implemented, a proprietary token can:
- Fund development
- Bootstrap a new platform
- Amplify network effects
- Stimulate trade and increase customer loyalty
- Support complementary products such as NFT launchpads, staking and drops
Not all NFT platforms have a well-designed token model. No matter how smooth the interface or low the fees, a suboptimal token can introduce friction rather than solve problems. The following six NFT marketplaces differ significantly in terms of target audience, network, maturity, features and roadmap. But they all share this much in common: a smartly designed token that has the potential to accumulate value and generate powerful network effects.
Loop Finance (LOOP)
Loop is one NFT marketplace, DEX and the launch pad were brought together. One of its most novel features is the ability for projects to issue native fungible tokens to users staking DeFi NFTs, forming an efficient and flexible fundraising mechanism. This transforms the regular IDO into an initial NFT offering, or INO, while reducing the token velocity because the issuance is correlated to the stake duration.
Located at the heart of the Cosmos ecosystem, on the Juno network, Loop is on a mission to create economic opportunities, shared experiences, strong community bonds and all the other positive effects that NFTs can create. To support these goals it is LOOPthe platform’s native resource that performs a variety of useful roles.
Because Loop Finance has an integrated AMM which pools liquidity from the entire Juno network, one of LOOP’s first roles has been a reward token. This solves the issue of issuance, by gradually paying out tokens to the community over time, and it also provides a reward mechanism to bootstrap liquidity.
Next, there is a feature called Loop Power that multiplies the DEX exchange fees and NFT marketplace fees distributed to LOOP players. To qualify for Loop Power, community members must either stake tokens or mint and hold NFTs. It’s a smart way to keep value within the ecosystem while encouraging community members to stick around for the long haul as Loop and the accelerating Cosmos universe reach critical velocity.
LooksRare (LOOKS)
Looks Weird is a no-nonsense NFT marketplace with a native token attached. The focus is on helping buyers discover new top collections from the moment they are released – no small feat in an industry where 10,000 coins cost NOK 10. Features like Discord notification of new coins allow buyers to stay updated, while the minimalist marketplace keeps clutter to a minimum, making it easy to tell what’s trending at a glance.
The LOOKS token works similarly to X2Y2, giving stakers 100% of all platform fees. You can also earn LOOKS rewards for buying or selling NFTs on LooksRare. Currently, an APY of up to 58% is promised for LOOKS players. And with rewards handed out daily to buyers and sellers, there’s no hanging around to claim what’s rightfully yours.
X2Y2
X2Y2 is an NFT marketplace that was launched on Ethereum as a direct competitor to OpenSea and LooksRare. And thanks to lower fees and juicy token incentives from day one, it succeeded in capturing significant market share right out of the gate. So much could have been predicted. However, what has surprised many is the fact that X2Y2 is still here eight months later.
Both the platform itself and its named token are seeing significant usage, with around 10,000 ETH in NFT volume per day on the marketplace and close to $2 million in X2Y2 trading volume. Stakers of X2Y2 receive 100% of all earnings, which currently registers a respectable 50% APY. The marketplace has not only innovated by launching with a token from the beginning: it has also consistently implemented useful new features such as analyses which shows the share of traders in profit or loss for a particular collection.
SuperRare (RARE)
SuperRare is an artist-first marketplace. In other words, the focus is on serving the needs of NFT creators, including support for royalty streams in perpetuity. It hosts exclusive collections from some of the world’s best digital artists and is the place to discover NFTs that have real aesthetic appeal beyond the base world of PFPs and pixelated anthropomorphic collections.
The RARELY token is very much governance based, with a corresponding DAO used to rally the community around appropriate artists, causes and galleries that deserve the spotlight. Membership of the SuperRare DAO allows holders to curate the platform and control marketplace parameters. SuperRare is a very different beast to OpenSea and the like. As the platform matures, expect new use cases for the RARE token to be implemented that will strengthen the bond between creators and collectors.
Rare (RGT)
Rare is not exactly new to the NFT hustle; the platform was responsible for moving PFPs en masse long before non-fungible became the hottest token type in town. It has since expanded from Ethereum to support five networks. You can now buy NFTs on Rarible that are aggregated from such chains as Polygon, Immutable X, Tezos and Flow. The ability to make multiple NFT purchases in a single transaction is just one way Rarible reduces gas fees.
Rarible’s native token has been a cornerstone of the platform for a long time now, but its role has recently evolved. That’s because the token once known as RARI has been changed to the Rarible Governance Token (RGT), which gives it a stronger emphasis on facilitating – that’s right – governance. Given the team’s focus on building out the Rari protocol, it appears that RGT will be used to incentivize web3 teams building on the infrastructure. Expect to hear a lot more about RGT as the protocol begins to be adopted, with projects likely to go green, whose business model channels value back to RGT holders.
Nftfy
Who says you have to sell an entire NFT? Nftfy believes it should be easy to sell just part of an NFT, so that the holder can unlock liquidity without leaving the valued asset itself. The platform for fractionalized NFT trading has achieved product market adaptation and is now routinely used by individuals looking to sell or buy a piece of an NFT. In addition to the marketplace, Nftfy offers a Crowdpad for NFT issuance, while RockPool is where blue chip NFTs can be bought in fractions.
The The NFTFY Token is used as security for new fractions that are placed in liquidity pools. Each pool must have NFTFY as part of its composition to be eligible for reward mechanisms and to be recognized as an official Nftfy pool. In addition, NFTFY is the primary reward mechanism, which encourages holders to place their floor NFTs in pools which are essential to ensure that there is sufficient liquidity for buyers.
The development of NFT platforms
As a technology, NFTs are not particularly new – at least when it comes to crypto. But as an industry, the space has transformed into a multi-billion dollar business in less than two years. In that short time, we have seen a number of new platforms emerge across multiple chains to support the trading, staking, issuance, lending and fractional selling of NFTs.
Many of these platforms have emerged with a built-in token, while others have added one retroactively. A few have even gone back to the drawing board, ripping up their token model and issuing an entirely new one. If you are considering buying NFT platform tokens, do due diligence into the project to gather weekly fees, users and other metrics that indicate steady growth.
In addition, however, you have to take into account that many of these platforms are very new, often on networks that are themselves still fresh. In such cases, empirical data can only tell you so much since their best years are yet to come. Keep a close eye on the projects that continue to build and innovate now. They are the ones whose hard work will be rewarded when the market cycle turns again and NFTs go back to breaking records and grabbing headlines.
