OpenSea vs Magic Eden - why's Magic Eden doing so well?
It's all about understanding users and building a great product for them.
TL;DR: Magic Eden nailed down on community building and created a product for its community.
OpenSea (OS)’s 7d trading volume was ~$84.52M with ~148,000 traders when they started to support SOL NFTs in July (source: DappRadar). At that time, Magic Eden (ME)’s 7d trading volume was ~$20M with ~200,000 traders. People thought that OS will absorb users from ME and ME is in serious trouble.
For the past week, ME has had 7x more trading volume and 12x more traders than OS in SOL. Magic Eden (ME)’s 7d trading volume is ~$38.62M with ~113,000 traders whereas OpenSea (OS)’s 7d trading volume on SOL is just ~$534K with ~9,000 traders.
Here’s another surprising fact: ME was the 7th marketplace launched on SOL, so they had a massive disadvantage in network effect. And yet they’ve had more than $2 bil NFT transactions within 10 months of launching. How could ME surpass other SOL marketplaces and defend their castle against OS?
Community
As boring as it sounds, the ME team focused on community building (~87,000 members on their Discord now) from the beginning. Talking to their customers, they learned that SOL users are different from ETH users: they’re younger, they like experimental NFTs with cheaper costs, and they love gaming NFT projects. The ME team listened to their customers’ voices and created products for them. Their community, to this day, is probably their biggest asset.
Product + Team
The founding team consists of an early employee of FTX, a product manager at Coinbase, and founding engineers of UberEats. They all have deep product backgrounds that let them build a great product like ME and they worked tirelessly to deliver the best user experience to overcome the network effect. Perhaps more importantly, the founders are humble, nice, and smart individuals who deeply care about their customers, the mission, and the integrity of the firm. (source: Bankless podcast below)
For the next step for ME, they’re going multi-chain. They’ll enable users to buy SOL NFTs with SOL and sell with ETH and vice versa. They’ve partnered with another company to provide a secure cross-chain bridge.
The founding team views ME as a place to discover NFT projects and learn about them, not just a place to purchase NFTs. Their current focus is on gaming and collectible NFTs, so they’ll deeply engage with users in those verticals and then expand to other segments. They’ll iterate over the community feedback again to repeat the success that they’ve had.
Thanks for reading :)
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