Current Overview of the Most Active NFT Trading Markets on Ethereum

Author: Lan Feng

Since the NFT Summer of 2021, the NFT market has experienced a wave of crazy bull markets, until May of this year, when the overall bear market in the crypto market led the NFT sector into its first bear market since its explosion. Although the trading volume has significantly decreased, the NFT market continues to be filled with news, with various financing announcements emerging one after another, and traditional sectors are paying increasing attention to NFTs.

As the most critical trading market track in the NFT field, the established leaders are moving forward without pause, while new entrants are coming in strong. Today, we will take a look at the most active NFT trading markets on Ethereum.

Overview

According to DappRadar's data on Ethereum NFT trading markets over the past 30 days, Opensea maintains its dominant position in both transaction volume and user count. Notably, Element Market, which has recently gained momentum, has seen a 110% increase in active users over the past 30 days, placing it in the second tier of Ethereum NFT trading markets. Meanwhile, the art-focused NFT trading market Foundation has gradually returned to calm after last year's explosive growth. Recently, X2Y2 has been questioned by the community regarding the rationality of its economic model, especially after being blocked by many collections due to the royalty controversy. LooksRare, once a challenger to Opensea, has seen a continuous decline in user numbers after losing in recent rounds of competition. Gem, as a trading aggregator, does not provide a market itself, so it is not included in this discussion.

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1. Opensea

When it comes to NFT trading markets, the first name that comes to mind is naturally Opensea. Founded at the end of 2017, this NFT trading market has experienced explosive growth after four years of hard work, coinciding with the rapid development of NFTs. In January 2022, its trading volume exceeded $15 billion, reaching $30 billion in May, doubling its total trading volume in just four months. Additionally, in April, it acquired the rapidly growing aggregator Gem.

Recently, Opensea's total trading volume has surpassed $40 billion. Based on a 2.5% transaction fee, Opensea's fee revenue has exceeded $1 billion, making it undoubtedly the most profitable company in the NFT field. (For reference, in May, Yuga Labs' Otherdeed had a total sales volume of approximately $300 million.)

SeaDrop

In September, Opensea launched its own Launchpad product—SeaDrop, allowing NFT projects to be launched and minted directly on SeaDrop, eliminating the need for creators to deploy additional contracts, thus reducing the difficulty of issuance. However, based on performance data, the two NFT projects released on SeaDrop, omgkirby x Channel Tres and Cloudmachine, are currently both in a state of loss, with the floor price of omgkirby x CT having already halved. Opensea's journey with its Launchpad still has a long way to go.

2. Element Market

Element Market was founded in April 2021 by Wang Feng, one of the three giants of Kingsoft. It is a multi-chain aggregation trading market that has completed $11.5 million in financing led by several capital firms, including Sequoia, SIG, and Dragonfly Capital. With the release of Element 2.0 in August this year and the launch of the Element Storm event, Element's trading volume has rapidly climbed, with total trading volume exceeding $140 million and active user count reaching 17.41k in the past 30 days.

Unlike other trading markets, Element not only supports listing/purchasing on its own market but also integrates the functionality of a trading aggregator, allowing NFT listings and purchases to be completed across multiple trading markets simultaneously. Element 2.0 adopts an open attitude to join the competition among NFT trading markets, supporting multiple markets to quickly cultivate user habits while lowering the entry barrier for new users.

Proprietary Trading Protocol ElementEx, Aggregation Protocol ElementSwap

For an NFT trading platform aiming for long-term development, protocols are the most crucial moat for the future. Element uses its proprietary trading protocol and aggregation protocol, similar to Opensea's Seaport, optimizing transfer efficiency through lower-level assembly language, thus achieving lower gas fees during transactions. User tests have shown that ElementEx's gas interactions are approximately 39% lower than OpenSea's SeaPort contract, with even more significant gas savings during bulk purchases.

Optimizing contracts to reduce gas fees is a time-consuming and labor-intensive task, which is one reason Opensea only released Seaport after five years of operation. Element's ability to launch a protocol of the same level within a year reflects its investment in technology.

OG Airdrop, Element Storm Event

On August 14, Element took a snapshot of platform addresses and recently announced the specific airdrop quantities. Unlike the vampire attacks launched by Looksrare and X2Y2 against Opensea when they first launched, Element allocated over 80% of the airdrop weight to its own trading users, reflecting its focus on cultivating user stickiness.

From September 5 to November 5, Element launched the Element Storm event, which includes a series of reward activities such as invitation rewards, listing rewards, trading rewards, and gas subsidies, as well as fun activities like whitelist airdrops, lucky draws, and check-in rewards. Additionally, Element has launched the world's first web3 community invitation rebate system: the Element KOL Recruitment Plan, allowing individuals to obtain personal exclusive invitation links through applications, while friends can enjoy 10 gas subsidies.

Daily Product Iteration

Since July, Element has been iterating its products daily, which is unprecedented in the entire Web3 field. Element is also very responsive to community feedback, updating products based on user needs in real-time.

Taking the recently popular domain name sector as an example, Element added the most comprehensive domain type filtering feature based on community feedback and made special annotations for wide characters/special characters in domain names to prevent users from being phished. As a result, the listing volume of .bit domain NFTs on Element's proprietary protocol has exceeded that on OpenSea, capturing 80% of the secondary market trading share.

3. X2Y2

X2Y2 was established in February 2022 by an anonymous team, with known founders being of Chinese descent. Upon launch, it initiated a vampire attack on Opensea through a token airdrop while also offering listing rewards and attracting the first batch of users with low transaction fees. Since most project parties did not set royalties on X2Y2, it captured a portion of the market share.

In May, X2Y2 launched trading mining, leading to a long-standing issue of wash trading, where daily trading volume occasionally surpassed that of Opensea. According to Dune Analytics, the change in X2Y2's market share before and after rough data cleaning (the right side shows data after cleaning, filtering only trades that were swapped back and forth) indicates that the actual trading volume is only about 10% of the total trading volume, with the Gem aggregator providing most of the trading volume.

Custom Royalty Controversy

On August 26, X2Y2 announced the launch of the "custom royalty" feature, allowing buyers to choose whether to pay royalties to NFT project parties. This announcement sparked a debate regarding NFT royalties. Several project parties have already taken measures in response to X2Y2's actions.

The Yogapetz Genesis collection, Keungz Genesis, has currently restricted authorization to the X2Y2 contract from its own contract, preventing the collection from being listed on X2Y2; the recently popular art project QQL Mint Pass has added the X2Y2 contract to its blacklist in the contract's NFT transfer method, allowing listings but preventing transactions.

Conclusion

With the arrival of the first bear market in the NFT sector, Opensea still holds the leading position in the NFT trading market and remains unshakable for now. However, several trading markets that shone during the bull market have gradually faded from people's view as the market transitions between bull and bear. The NFT AMM protocol sudoswap, which briefly surged due to integration with Uniswap and the announcement of token distribution, has returned to calm following the announcement of token allocation. NFT trading markets like Element, which remain active and focused on building during the bear market, are expected to shine brightly when the next NFT bull market arrives.