Coinbase released its much-anticipated Coinbase’s NFT marketplace for select waitlisted beta users a little over two weeks ago. The company released the service to the public earlier this week, but the digital collectibles trade has been slow.
According to CoinMarketCap, Coinbase’s exchange has a 24-hour volume of $3.2 billion and around 2.5 million weekly visits. According to data provided by user hildobby on Dune Analytics, Coinbase NFT volume has surpassed $668,668 over a small pool of 1,287 customers since its inception on April 20.
So, why isn’t more of its exchange’s overall volume and user base moving into its NFT marketplace? Although Coinbase’s NFT platform is still relatively young, you’d expect better performance from the world’s second-largest crypto exchange.
Data on Coinbase’s NFT marketplace
The Dune Analytics data, according to a source close to Coinbase who spoke on the condition of anonymity, does not reveal an overall number of people who have joined up for the platform.
“There’s that one data point that states Coinbase NFT total users,” the insider explained, “and it’s been misconstrued as the number of people on the platform.” “That’s how many people have made a purchase, not how many people have signed up.”
Since April 20, OpenSea, the world’s largest NFT marketplace, has seen almost $3.5 billion in NFT volume among roughly 350,000 users. During that time, OpenSea’s volume was about 500,000 percent larger than Coinbase NFTs.
According to data from The Block, OpenSea accounts for the majority of NFT marketplace volume, followed by LooksRare and Magic Eden. However, even when compared to second-place LooksRare, which has seen $1.5 billion in NFT volume across over 21,000 customers since April 20, Coinbase’s NFT marketplace has remained relatively stable.
On May 4, Coinbase NFT opened its marketplace to the general public. According to hildobby’s stats, the number of users has steadily decreased since then. According to Nick O’Neill, CEO, and co-founder of The Nifty, “the anticipation of where this should be right now has not matched expectations.” “The product is overdeveloped; this occurs frequently.”
Given Coinbase’s size, the present outcome of Coinbase NFT is not surprising. According to O’Neill. “A startup entering this space has the advantage of not having to be completely formed.”
Coinbase vs LooksRare
When LooksRare first began in January 2022, it offered awards and token airdrops to users, boosting market activity and propelling it to become one of the largest NFT marketplaces in less than six months.
“I believe [LooksRare] has built something that is the most equivalent for the best method to join this area at this point in time,” O’Neill added. “I believe Coinbase’s disadvantage is the regulatory scrutiny they endure (as a public business), which forces them to operate under strict guidelines.”
Coinbase’s confidence to take on the NFT world
It had a comparable opportunity with NFTs since it had successfully brought cryptocurrency to both crypto-native audiences and the broader public in an “easy-to-use approach.” During a press conference last month, Sanchan Saxena, vice president of products at Coinbase, stated.
However, not everyone is in agreement. Some members of the cryptocurrency community believe Coinbase has passed its prime and that its poor traffic is the result of a “mediocre” beta launch.
In a tweet, Nick Tomaino, founder and general partner of 1confirmation, said, “[Coinbase’s] whole approach to NFTs has been off.” “Months of vaporware to build buzz, followed by an Instagram-like feed for NFT influencers sounds like an approach from an out-of-touch Silicon Valley firm that understands NFTs are popular but doesn’t fully understand them from a user standpoint.”
So, what can – or will – assist Coinbase is expanding its NFT marketplace? There is no perfect solution. Tomaino noted that making it “dead simple” for people to buy and sell NFTs in US dollars could be a solution.
“They overcomplicated things, and it’s difficult to develop a marketplace like that,” O’Neill said. “The only way to do it is by bootstrapping and incentivizing individuals in the industry to jump in, and no one has a reason to switch to Coinbase right now.”
Coinbase to the rescue?
A spokesman for the exchange told TechCrunch that the exchange expects to roll out further NFT marketplace capabilities at a later date, but gave no further specifics. On May 6, Coinbase declined to comment, saying it will provide an update on the NFT market during its quarterly earnings release.
Tomaino tweeted, “There are billions of individuals waiting to buy their first NFT, and Coinbase can still play a huge role there.” “However, there must be recognition that this asset class is leading the way forward, and the fiat buy/sell experience is where to concentrate.”