Transition in NFT Markets as Opensea’s Monopoly Declines: Report

Last year’s NFT gold rush marked OpenSea’s rise to a $13 billion company, but competitors have increasingly taken market share.

A new report suggests the transition of a previously monopolistic non-fungible token (NFT) market into an oligopoly.

OpenSea faces stiff competition

According to the latest edition of Binance’s Market Pulse, NFTs had a bad quarter across the board in Q3 of 2022. While OpenSea remains the leading exchange, the biggest challenger it currently faces is Magic Eden as Solana NFTs take speed.

OpenSea’s market share by monthly volume peaked in May and has been on a gradual decline since then.

The Ethereum-based NFT marketplace had reigned unopposed for the past year. The company was founded in 2017 and grew astonishingly in the last year amid an NFT boom. It even raised $300 million in new venture capital led by investment firms Paradigm and Coatue Management, bringing its valuation to a staggering $13.3 billion in just four years.

However, the report suggests that the NFT market as a whole is in a transition phase from OpenSea’s monopoly. Part of the trend can also be attributed to the NFT volume in the third quarter which produced a drastically worse result compared to the previous two quarters after the market round in June.

Key indicators in the NFT market

Zooming out, Solana and Ethereum continue to battle for NFT industry supremacy despite the latter still holding the market leader title. Solana’s growing momentum was interrupted a bit due to repeated network outages as well as the bear market. But it remains visible with several volume peaks recorded last month alone. The same cannot be said for Ethereum, as volume continued to decline.

However, Ethereum remains the strongest blockchain in terms of NFT sales. It registered a whopping 65% market share at the end of the 3rd quarter. However, it is worth noting that the number represents a 16% decrease from the end of Q2. NFT sales for Solana, on the other hand, have been on an upward trend.

Despite the turbulent market conditions, buyers in the third quarter of the year have shown “resilience”. The report stated that the value of unique buyers has halved since its high early this year. However, since the end of the second quarter, a slight increase in the number of unique buyers was observed.

Around 9.5 million transactions were registered in January this year, after which the numbers gradually fell. However, the number of transactions increased in September, with around 7.2 million, after an initial decline in July and August, with 5.4 million and 5.1 million respectively.