Imagine this: Amazon is, by a number of criteria, the largest shopping platform in the world, and it wants to hold onto that dominance; Shopee, on the other hand, is a leading player only limited to the Southeast Asian region. So what happens if one day, the same product could sell ten times more on Shopee than on Amazon?
Basically, this is what is taking place in the NFT world right now: OpenSea, an NFT marketplace built on the decentralized blockchain Ethereum, is the world’s first and by far the largest NFT marketplace, where one can buy and sell non-fungible tokens (NFTs). Magic Eden, one of OpenSea’s competitors built on another blockchain called Solana, is only the “leading NFT marketplace [based] on Solana”. According to DappRadar‘s data, however, since late April, as a Solana NFT collection called “Okay Bears” was going viral, Magic Eden saw its trading volume exponentially grow before eventually surpassing OpenSea’s trading volume on May 16, putting OpenSea’s dominance in the Solana NFT trading market to the test.
What exactly is Okay Bears, to begin with? It’s a collection of 10,000 NFTs, or non-fungible tokens, released on the decentralized blockchain Solana. For the sake of convenience, though, you may take them just as a bunch of cartoon bears with real-world financial value. Other than that, as the project’s manifesto indicates, Okay Bears also represents a set of values, which at its essence invites people to create a relaxed, open community with “good vibes” where everyone should be carefree and live in the moment. You can purchase a bear using the crypto currency SOL after which it becomes your virtual property. If its value rises, you might wish to sell it to make a profit.
Okay Bears was released on April 27 on the Solana blockchain at a price of 1.5 SOL each, which was worth around $150 at the time. It became an instant hit, and on May 16, Magic Eden, the NFT market where Okay Bears was first released, surpassed OpenSea’s trading volume. According to DappRadar, a firm tracking such data, as of May 16, Magic Eden’s 24-hour trading volume amounted to $47.22 million, whereas that on OpenSea was $32.88 million. Moreover, within 24 hours after being put on sale, Okay Bears’s second-hand trading volume on OpenSea exceeded 187,500 SOLs, equivalent to $18.5 million, breaking all previous records for non-Ethereum NFT projects traded on OpenSea, making Okay Bears the largest series of NFTs ever traded by Solana in a 24-hour period. At its high point, a bear could cost as much as 237 SOL ($11,490), a 15,800% growth from the day of its release.
Currently, Magic Eden still enjoys complete domination in the Solana NFT trading field. On May 18, 2022, Magic Eden had 97.2 percent of the market transaction share, while OpenSea had only 2.5 percent. The data is likewise similar in terms of the overall trading volume: Magic Eden’s intraday trading volume was 24,383, whereas OpenSea recorded only 623.
This has posed a threat to the Ethereum-based NFT marketplace OpenSea, which, on its official website, acknowledges itself as “the world’s largest NFT marketplace” – and it is clearly looking to hold onto that position. Question is, will Magic Eden let it? A small exchange on Twitter between the two gives some clues: Despite the fact that OpenSea now only hosts 2-5% of all Solana NFT transactions, its official website has listed “Solana NFT” as a separate category from “All NFTs”, and on Twitter, OpenSea has created a complete thread dedicated to Solana NFT projects. To that, Magic Eden sarcastically replied, “a sOlAna pRojEcT tHrEaD. This is what happens when you don’t DYOR [Do your own research]”, indicating that OpenSea has little advantage when it comes to Solana NFTs. Magic Eden’s reply received far more “likes” than the original thread post by OpenSea.
Nonetheless, OpenSea is on track to become a marketplace for all. On May 20th, it launched a new web3 marketplace protocol, “Seaport”, which will increase liquidity in the entire NFT marketplace by offering users innovative ways to buy and sell NFTs, including allowing buyers to pay for NFTs with different assets other than crypto currencies. Completely open-source, the new protocol will also yield higher levels of decentralization, which means optimized contracts and hence lower gas fees – a problem that has barred many new NFT buyers from entering the Ethereum-based marketplace, and which Magic Eden has been able to offer a better solution to.