Magic Eden, which has long been the top marketplace for Solana NFTs, recently made the move to Ethereum. They now have their sites set on building a marketplace for Yuga Labs assets on the apecoin.com domain. How do they plan to accomplish this? And what lessons can OpenSea learn from Magic Eden’s hustle?
Current Fees Are Bananas!
To trade on OpenSea , you’re already looking at a 2.5% platform fee when trading an NFT. If you compound this with creator royalties, then you’re looking at 7.5% before factoring in gas costs. That’s a substantial chunk of the pie right there.
This is also why platforms like LooksRare integrated built-in discounts through listing and trading rewards.
When combined, Yuga’s Ecosystem assets make up a substantial percentage of the volume in the overall NFT market, and it’s here that Magic Eden saw an opportunity…
In their proposal to the ApeCoin DAO , Magic Eden highlights this problem and is looking to insert themselves as the de facto marketplace for Apes.
The ApeCoin Marketplace
The ApeCoin Marketplace built by Magic Eden would slash marketplace fees down to 0.75%.
They start with a 1.5% base fee per trade. Then, they apply the following discounts:
- 0.5% discount for trades made with $APE, and
- 0.25% discount for trades made by holders of BAYC, MAYC, or BAKC
The marketplace will not be limited to ApeCoin purchases and will also allow for ETH bidding. Even for individuals that don’t hold any Yuga assets, the 1.5% marketplace fee is still substantially lower than trading on OpenSea.
It will be interesting to see how the proposal is received by the ApeCoin DAO, but the overall response thus far has been positive.
If approved, Magic Eden estimates that it could have the marketplace up and running as early as September. While the main utility of the platform is better fees for ApeCoin users and lower fees, Magic Eden states that future AIPs will be submitted, thus allowing community members to launch their own projects via the marketplace. Additionally, Magic Eden will look towards proposing a fee split between themselves and the ApeCoin DAO in order to create a revenue stream for the community as a whole.
OpenSea’s Wake-up Call?
Saying that OpenSea moves at a nonchalant pace would be an understatement. Users have constantly pointed out issues with the platform. From their policy on flagging accounts for suspicious activity to their high platform fees, they’ve still maintained a strong grip on trading volume across the length and breadth of the NFT space.
However, that grip has loosened over the last few months as competitors like LooksRare and Magic Eden (among others) have been hungry to undermine or remove OpenSea’s dominant market share.
Even with lower fees in the past on LooksRare, we still see a lot of holders defer to OpenSea. Will Magic Eden’s marketplace result in a different outcome? Only time will tell…