NFT platform shifts strategy in wake of crypto slump – ARTnews.com

Ethereum, the cryptocurrency on which most NFTs are denominated, fell below $1,800 on Friday, its lowest value in over a year. That’s a long way from the peak in the high $4,000s last November.

With the fall, the mourning has begun, even among a crypto community accustomed to weathering the asset’s volatility. However, NFT platforms do not wade through the five stages of grief before taking action.

In quick succession, major NFT platforms such as Foundation, SuperRare and OpenSea have announced major changes to the way they do business.

While none of these pivots have been explicitly labeled as a response to the market, the timing and nature of the new initiatives seem to make up for the current lack of enthusiasm in the market.

Take Foundation, for example.

Foundation is an NFT platform known for its high quality and focus on one-of-one, or single-issue NFTs (as opposed to large PFP NFT collections like Bored Ape Yacht Club or Crypto Punks). This was partly possible because, in order to sell works on the Foundation, an artist had to be invited by the Foundation or by other artists who were already using the platform.

In mid-May, Foundation announced that it would be to do away with their invitation-only strategy, which they framed as a shift away from the gatekeeper mentality of Web 2.0 (the Internet we have today) to the greater freedom and democracy of Web3 (an Internet experience built on decentralized technologies such as blockchain).

Still, the Foundation’s tight curation was what set it apart from platforms like OpenSea, which have made significantly more money but have also been plagued by fraud, hacks, rye moves and all other risks which comes with not verifying users. But as the market changes, exclusivity could have presented itself as a threat to the scale needed to survive.

On the flip side, the Foundation appears to be focusing more on a new operating system initiative called Foundation OS, whose motto is “The Building Blocks of a New Internet.” The operating system, a kind of key service infrastructure, is built by the data sharing protocol Foundation built for the marketplace. Leaning on infrastructure offerings may seem like a more sustainable aspect of the business to focus on when short-term trading isn’t in vogue.

Sunil Singhvi, head of business development at NFT platform Rarible, said that at this moment it is important to have this kind of diversity (Rarible has not announced any changes).

“The protocol has always been our business, and the marketplace was a shining example of what that protocol can build. But we have a whole range of things we’ve built alongside the marketplace,” Singhvi said ART news.

Meanwhile, NFT platform SuperRare believes it has found a way to respond to the changing market without changing the core aspects of SuperRare’s identity.

“SuperRare represents trust,” said CEO John Crain ART news. However, Crain said the company knew it had to try something new.

“Just having a marketplace is not new anymore. Creating an NFT is nothing to write home about. So this moment is really pushing people to add value and push boundaries,” he said.

Like Foundation, SuperRare was a place to discover artists selling unique works, as opposed to collectible type PFP NFTs. Also, SuperRare has never been a secondary market. Now SuperRare is exploring both PFPs and the secondary market.

IN cooperation with Async Art, an NFT platform specializing in creating large-scale, generative projects, SuperRare offered its first massive collection called Across the Face, created by Nigerian artist Osinachi. The series is inspired by Rene Magritte’s famous painting The Son of Man (1946) in which a floating, green apple obscured the face of a man in a fedora. In Across the Face, a black man’s face is obscured by a variety of objects: a pigeon, a book, a Rubik’s Cube, and so on, with randomly paired accessories and color backgrounds.

SuperRare typically makes 20-30 works a day, a SuperRare spokesperson said ART news in an email, but working with Async has allowed them to handle a much larger load. Async minted 1000 NFTs and then these were sold on the secondary market through SuperRare. The move is one that was tightly controlled, allowing SuperRare to expand its range of offerings without suddenly flooding its own market. More large collections will be made available with Async in the future.

Unlike many NFT initiatives and platforms, SuperRare was in business before most people knew what an NFT was, which meant operating on a budget for many years. For the many platforms that emerged during the 2021 boom, this may be the first time they operate in a major downturn.

“In a bull market, money is easy to come by. But venture capital spending on crypto startups and stuff peaked in December,” Crain said. “In this market, investors are certainly going to think twice about how they deploy capital, it’s not like ‘cool idea, here’s some money’ anymore. “

Whether or not these summer child platforms will survive a crypto winter is a question no one can answer, especially as they chase the jagged peaks and troughs of a market that promises to skyrocket in the next moment.

But if there’s one platform that’s too big to fail, it might be OpenSea. With a valuation of $13 billion, OpenSea is undoubtedly the highest valued NFT market around, but even this giant has made some changes.

Unlike Foundation or SuperRare, OpenSea did not structure itself around exclusivity, but focused on getting the most users possible from the start, which has helped OpenSea gain market share, but has also meant sacrificing the quality of their service in the eyes. by many crypto enthusiasts. At this point, OpenSea didn’t have many options for how it could be expanded. In an incredibly savvy move is OpenSea starts to open its marketplace to NFTs minted on a cryptocurrency called Solana.

Like Tezos, Solana is a crypto infrastructure that requires less energy and is thus considered better for the environment. The same things that make it greener make it cheaper to use, ie the gas fees on Solana, the fees you pay when you complete transactions (like buying an NFT) are much, much lower than the gas fees for using Ethereum.

Solana is also valued much lower than Ethereum. The peak price was around $200 and is now worth around $40. By offering Solana NFTs on OpenSea, the platform entices NFT collectors to continue buying without having to make the larger investments implicit in trading Ethereum-based NFTs.

Solana NFTs on OpenSea are still in the beta phase, meaning they are still being tested.

Whether any of the changes that NFT platforms are pursuing will be effective remains to be seen. Maybe the market will miraculously turn around and none of this will matter anyway.

Or maybe not.