How a Small Startup Beats Magic Eden and Rarible to Build ApeCoin’s NFT Marketplace

When ApeCoin The DAO community started chatting about launching a custom marketplace for Bored Ape Yacht Club NFTs this summer, major existing marketplace startups that Magical Eden and Rare prepared proposals for building feature-rich platforms – without upfront fees.

But when APE token holders cast their votes, none of the well-capitalized, VC-funded firms won the community’s approval. Instead it was Snag Solutions—a two-person startup founded this summer by former DoorDash employees—as secured only passed proposalwith 88% positive votes from token holders.

“It was a very interesting process,” said Snag Solutions CEO and co-founder Zach Heerwagen Decrypt about convincing ApeCoin DAO voters. “We were small enough and nimble enough to adjust our entire business approach to win.”

Today is the company’s official ApeCoin NFT Marketplace was published, enabling trading for popular Yuga Labs-developed collections such as Bored Ape Yacht Club, Mutant Ape Yacht Cluband Otherside metaverse game. But why should holders of the ApeCoin Ethereum-based crypto token built for the Bored Ape ecosystem – need your own custom marketplace?

First, it offers much lower fees than a general purpose NFT marketplace like OpenSea, which has a standard fee of 2.5%. The ApeCoin platform charges a relatively small 0.25% platform fee on listings in APE and 0.5% fee on listings in ETH. In both cases, 0.25% goes back to ApeCoin DAOits treasury. Snag Solutions only benefits on sales listed in ETH, and takes the remaining fee of 0.25%.

The other potential benefits come with deeper Bored Ape ecosystem integration than typical NFT marketplaces. The ApeCoin marketplace will display ApeCoin stake details for any listed NFT, for example, as well as highlight the matching NFTs across Yuga’s projects. It will also tell customers if a Bored Ape has used a Serum NFT to give a Mutant Ape NFT.

Some of the above may make no sense to casual observers. But the marketplace’s audience is the ApeCoin faithful – people who are invested in the future of the Bored Ape ecosystem and likely own some of the NFTs. They might appreciate all that nuance and supporting detail, as well as the lower fees and contributions from the DAO’s coffers.

Snag Solutions has only been around for a few months, and they’ve built a few other custom marketplaces for NFT projects, such as GoblinTown, True Undeadand Crypto Chicks.

But the fledgling firm, with just two full-time employees — Heerwagen and co-founder and CTO Jason Jong — faced off against a pair of big players to win community support to build the marketplace. Magic Eden in particular promoted aggressively its efforts to build the marketplacegiven its new entry to the Ethereum space at the time.

As Heerwagen suggested earlier, victory came from clever pivots. Snag Solutions’ first pitch was not a winner. The firm initially wanted an upfront payment of $50,000 and specified higher overall fees. The community was unaffected, and the proposals with bigger names and lower fees from Magical Eden and Rare prompted the Snag Solutions team to quickly rework their model.

“Their suggestions made our proposal better,” Heerwagen said, “as with anything in business.”

Then the duo shook things up. Snag Solutions dropped the prepayment request and cut fees, but it also went a step further: it identified some of the key complaints about Magic Eden and played into a growing narrative of Solana-centric startup.

The firm had a sensational success earlier this year, dominating the Solana market and to a value of 1.6 billion dollars in just nine months. But Magic Eden has been a target for criticswhich claims that its custody market model puts users’ NFTs at risk, and its closed source technology is not particularly Web3 in the nature. Snag Solutions used that perception to its advantage.

“Magic Eden’s proposal was very feature-rich and built by a market leader,” Heerwagen recalled. “And so we kind of pivoted the smart contract stack to be completely on-chain and open source, so we could lean into the narrative that Magic Eden is pretty centralized and doesn’t play well to Web3 values.”

Ultimately, Magic Eden’s proposal – which was voted on during the same week in September – also failed only 40% positive votes (measured by token share). Rarible’s proposal was left and did not go up for a vote until this month, well after Snag Solutions’ proposal was approved, only found 14% of the vote for a Rarible ApeCoin marketplace.

Leaning into concerns about Magic Eden was a smart move, but Heerwagen said it wasn’t purely theatrical. Emphasizing ideals such as decentralization, interoperability and non-extractive models, Snag Solutions found a receptive audience among ApeCoin holders.

“I was genuinely blown away by how well the community resonated with it,” he shared Decrypt.

The message worked and now ApeCoin DAO has its own NFT marketplace. The crypto winter has just got colderhowever with Bored Ape NFT prices drop and ApeCoin setting an all-time low price this month in the middle collapse of FTX. It’s a tougher market for traders, but Snag Solutions aims to help keep the Ape buzz alive.

“We trust [Yuga Labs] and on ourselves as a community, which is the cool part, to continue to add value to tokens and the ecosystem here,” Heerwagen said.