Going head-to-head with OpenSea, Magic Eden's path to growing a crypto unicorn

This is the fastest growing Web3 project in the past year One of the stories, in nine months, it has grown from zero to one into an encrypted unicorn that has received star capital investment from Sequoia, Paradigm, and Lightspeed Venture Capital.

This is a leading NFT market, which has more than 90% share in the Solana ecosystem , and then began to confront OpenSea, the overlord in this field, and hoped to become the NFT market with low fees, security, the largest and most liquid NFT in the encrypted world.

So this platform - Magic Eden, what opportunities and challenges have they experienced in less than a year of development. Next, BlockBeats will give you a complete overview of this project and the stories that happened to them.

Take the power of four people to grow into a 1.6 billion dollar unicorn in nine months

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Seven years ago, Sidney's first crypto company failed during the 2015 bear market, and he then He went bankrupt and lived on a sailboat. Fortunately, Starbucks at the time allowed him to charge the battery for free during that time.

11 months ago, as a co-founder and CTO, Sidney started his second crypto company from scratch, This company is Magic Eden, which mainly provides an online marketplace for NFT on the Solana chain.

Before that, Sidney worked as Engineering Manager at Uber and Facebook, focusing on artificial intelligence , machine learning, search recommendation and other fields. Until later, Jack Lu, a friend of his youth, approached him and discussed the idea of starting an NFT market on Solana.

Jack and Sidney are both Chinese Australians. They lived in Melbourne when they were in middle school. They met at the age of 16 I went to a bus stop on the way to the math cram school. Years later, Jack worked for a while at the cryptocurrency exchange FTX and saw an opportunity in the development of Solana, eager to start something new in this new and emerging ecosystem.

Later, two other co-founders, Zhuoxun and Zhuojie, joined in. Zhuoxun is dYdX employee No. 2, who worked as a senior product manager at Coinbase, and Zhuojie is Sidney’s colleague at Uber. These four co-founders quickly started the early construction of Magic Eden by virtue of their rich professional knowledge and experience in the encryption field, as well as the good cooperation in product, technology, and operation.

Magic Eden co-founder ( From left to right): Jack Lu, Sidney Zhang, Zhuojie Zhou and Zhuoxun Yin

talking When discussing the advantages of Magic Eden, Jack, as CEO, once said: Among the founders, they have working experience in leading exchanges such as Coinbase and FTX, allowing them to have a unique consumer market experience and encryption exchange experience. As for the NFT market, the business model is actually very similar to that of encrypted exchanges, with mechanisms such as trading, issuance, and pricing, and the application itself looks like a consumer exchange market.

Now, this company has a team of more than 100 people after less than a year of development. Sidney is one of the sailing boat owners who provide accommodation. They are constantly taking community feedback, testing new features, rolling out iterations at a frantic pace, and hoping for a chance to change the future of Web3.

Additionally, Magic Eden’s total transaction volume has exceeded 23 million SOL (up to $1.9 billion ), accounting for more than 90% of Solana's NFT market transaction volume, and it is still growing. At the same time, not reconciled to this, recently Magic Eden also announced the multi-chain expansion and integration of the Ethereum NFT ecosystem.

In terms of financing, Magic Eden completed a $130 million Series B round of financing in June this year , led by Electric Capital and Greylock, Sequoia Capital and Paradigm continued to participate in the investment, the post-money valuation has increased by about 10 times since the A round of financing in March, reaching $1.6 billion.

Therefore, Magic Eden has grown rapidly into an encrypted Unicorns, but not too affected by the arrival of the bear market in the encryption market and the downturn in NFT transactions. It took three years for its competitor, OpenSea, the current overlord of the NFT trading market, to get to this point.

But for Magic Eden, this may just be the beginning.

Strong Gang Open Sea, the sword refers to the multi-chain NFT ecology

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During the entire NFT bull market cycle, Magic Eden has been beating its opponents. It currently dominates the Solana NFT market, and this progress is strikingly similar to OpenSea’s market share on Ethereum. In terms of the total transaction volume of the NFT market, Magic Eden ranks second, followed by OpenSea. Even, as Solana NFT transactions heated up in May this year, the 24-hour transaction volume of Magic Eden once surpassed that of OpenSea.

In addition, after Sequoia Capital invested in Magic Eden, its partner Shaun Maguire also said that although people buy or sell NFT usually in OpenSea, but has a weak point compared to Magic Eden: it mainly relies on the inefficient Ethereum network.

Due to the differences in the way NFT traders interact with the two platforms, in general, the The gas fee for purchasing a single Ethereum-based NFT on OpenSea often costs tens of dollars, while the transaction fee for Solana NFT on Magic Eden is less than 1 cent. NFT is the best entry point for new consumers to enter the Web3 and encryption market. The entry Magic Eden builds a user experience that is easier to access, lower cost, and faster.

In terms of operating mechanism, Magic Eden runs through from primary issuance to embedded transactions. On the former, it works closely with creators on its Launchpad, helping projects mint, market, and execute successful launches. On the latter, Magic Eden takes an API-driven approach to help with project management and hosts its own embedded marketplace. It's a similar progression to what we've seen in e-commerce, where brands operate in omni-channel, they sell through their own direct-to-consumer sites in addition to third-party retailers, and Magic Eden's infrastructure works well effectively support creators across channel portfolios.

In this regard, OpenSea also began to make adjustments, and it was officially launched in April this year based on Solana The issued NFT is denominated in SOL. And in July, OpenSea also announced the official launch of "Solana Launchpad". After that, creators can obtain NFT Mint's hosting service through OpenSea, and help creators guide all previous activities of NFT Mint, communities, whitelists of supporters, and other activities after Mint NFT, as well as secondary sales services, etc.

However, more than three months have passed, and this part of the Solana NFT transaction on OpenSea The utilization rate has been tepid and has not shown much improvement. According to the data provided by Dune user rexzh0u, on August 10, OpenSea accounted for only 0.8% of Solana NFT’s daily transaction volume, and it has not exceeded 10% for a long time. It can be seen that Magic Eden’s position in this area is still difficult to shake.

Magic Eden, on the other hand, accepted the challenge and chose to go head-to-head with OpenSea. On August 2, Magic Eden announced that it will integrate the Ethereum NFT ecosystem for multi-chain expansion. Thereafter, the platform will offer Ethereum NFT creators the same “listing” benefits as its Solana users, including its popular minting toolkit, whitelisting tools, marketing support, and more.

In addition, Magic Eden has also increased its "firepower" to ApeCoin DAO on August 10 Initiated a proposal to establish a low-fee NFT trading market for APE holders, so that APE holders can buy and sell NFT at a minimum transaction fee of 0.75%. At that time, sellers will be charged 1.5% per transaction, with a 0.5% discount on all transactions made by APE holders, and an additional 0.25% discount on transactions made by BAYC, MAYC or BACC holders Discount.

In the future, Magic Eden may continue to expand its cooperation with other important projects in the Ethereum NFT ecosystem cooperate. At present, in terms of the platform's operating mechanism and community culture, it has successfully established a strong moat on Solana's NFT transactions. In less than a year since its establishment, the platform has more than 22 million monthly unique visitors, more than 100,000 wallets interact with the platform every day, and the secondary market has more than 8,000 collectibles.

Success or failure, crisis and opportunity in early development

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However, the development of Magic Eden has not been smooth sailing, and it has also fallen into a crisis of success or failure in the early days.

"Magic Eden is too stupid to ask for ID, you believe everything now; It's easy to prove we're Rug, we just paid for a few actors."

This is the original Rug project Balloonsville on Magic Eden ridicule of it. There were 5,000 NFTs in the Balloonsville collection, mint via Magic Eden’s Launchpad, managed to earn over 17,890 SOL (worth $2 million at the time), and then declared it all an elaborate scam.

And, Balloonsville also accused Magic Eden of increasing revenue through Launchpad, but the process was lax, and the process of verifying favorites lack of control over authenticity. After the tweet was sent, Balloonsville deleted its account. Soon, Magic Eden was dragged into the quagmire by public opinion, receiving numerous criticisms from its community of NFT collectors and creators.

And this incident also sounded the alarm, Magic Eden began to face two choices: tell Users should be responsible for themselves, mint NFT is essentially DYOR; or give users a refund. This left the Magic Eden team with a choice, but they chose the latter.

The team spent hours on Twitter Spaces answering questions and asking for feedback from numerous community members opinion, and refunded the user the cost of the mint NFT. They then rallied community members to move forward with the Balloonsville project and injected it with 5000 SOL, effectively unwinding the project. Today, "Balloonsville 2.0" is a thriving community-driven NFT project with a gamified ecosystem where users can stake their NFTs to obtain the project's native tokens and explore its metaverse.

But despite this, the event had a huge impact. At the time, Magic Eden paused its Launchpad program for two or three weeks, foregone revenue from upcoming mint projects, and even introduced upcoming creators to rival NFT platforms so their launches could continue. And as it overhauled its platform processes, Magic Eden's business began to plummet.

"In cryptographic terms, this incident is the so-called "De-rugging", Our Launchpad business has shrunk by about 70% in a month, but we still choose to stand with our users and use this time to completely revamp our platform operation process and strengthen user trust. It also embodies some of the principles we have as a company and we will continue to live by them. "Magic Eden COO Zhuoxun said.

Since then, Magic Eden has released nearly a hundred NFT projects, No more scams, no Rugs, probably the best safety record in the industry. Moreover, Magic Eden subsequently launched two of the most iconic Solana NFT series, namely, Okay Bears and DeGods. The total transaction volume of the former reached nearly 2 million SOL, and the total transaction volume of the latter exceeded 800,000 SOL.

“Yes, we are very grateful for the challenges that the Rug incident experienced. After successfully getting out of this predicament, our platform mechanism And operational capabilities have been raised to a new standard." Zhuoxun's follow-up comments on the unforgettable Rug incident.

Core products: Launchpad and Eden Games

Today, Magic Eden regards itself as the steward of the NFT ecosystem, emphasizing a higher degree of responsibility to users. Its CEO Jack believes that in a world where Web3 applications are known to be challenging for novices to use, Magic Eden's experience should be more similar to Web2 applications, but it needs to maintain the core spirit of Web3. "It needs to be fast, clear, low-cost, and support better user protection, and this sense of responsibility to ecological users also allows Magic Eden to create more security and reliability."

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Launchpad

And another, the key to boosting the growth of Magic Eden is the launch of its Launchpad. Previously, it took weeks for many NFT collectibles to reach the secondary market to start trading. Also, launching an NFT project on Solana at the time was a challenge for creators to search the internet for smart contract developers and then pay them to build a custom mint site.

Magic Eden has greatly shortened this time, through the full-service NFT casting platform Launchpad , an NFT collection mint can be used for secondary transactions on the platform after a few minutes.

In December 2021, Magic Eden began to strengthen its Launchpad operations, attracting creators to publish their NFT collections on the platform. While Launchpad has actually been around since the second month, the team has since done a lot of work behind the scenes to make the experience more hassle-free and smooth.

At first, Launchpad was a product that only helped creators publish NFTs, but later it began to gradually Extend the user journey for creators, such as through pre-releases to help them target specific members of the community. After the release, there will be some features that will help creators manage their communities or look at some statistics or analysis to understand how their communities are formed, which is one of the creative places of this product.

In addition, Launchpad is also experimenting with some social features, starting some interesting experiments around chat. Magic Eden believes that most NFTs have a very social experience in nature, but also an emotional experience: at the moment of NFT mint, there will be a lot of hype, or when the popularity of an NFT continues to rise, everyone When talking about and trading it, the newly added social function can not only provide users with more space, but also trigger more emotional connections and feedback from users.

Currently, Launchpad has become an important part of Magic Eden's growth flywheel, attracting hopeful contacts Top NFT creators for the platform's broad user base. Currently, over 250 projects are minted through Launchpad and has earned over $10 million through its primary minting since inception.

Eden Games

On the other hand, by creating a low barrier to entry and fast execution environment, Magic Eden is also positioning itself to lead category expansion beyond the PFP NFT series into gaming, sports, Art and many more frontiers. To this end, Magic Eden has launched Eden Games, a content hub for game publishers. Magic Eden said that Web3 games will become the entrance for millions of users to enter the blockchain, which can push the blockchain into the mainstream.

After setting its sights on games, Magic Eden envisions a future that can be transferred across games through NFT and interoperability, ultimately bringing better liquidity to players while also providing game developers with more accessible economic infrastructure. Therefore, the platform will build a bridge for game developers and players to embed blockchain technology into traditional games and encrypted native games.

At the same time, not long ago, Magic Eden also launched a venture capital department, Magic Ventures, to invest in Web3 games. Strategic partner Tony Zhao will lead the division; also announced the appointment of former League of Legends TSM player Yoonsup Choi, Fortnite champion Harrison Chang and former SOAR Gaming esports director Matt Biamonte, all three will focus on games and NFTs , providing advice and support for game developers' launch strategies.

Since the launch of Eden Games, the Magic Eden team has launched more than 30 games and virtual World projects, including Mini Royale Nations, Everseed, SkateX, etc., accounted for more than 92% of Solana game NFT trading volume.

MagicDAO

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In terms of decentralized governance, Magic Eden is also gradually exploring. It released a Magic Ticket NFT collection, allowing users in the community to access MagicDAO. Over time, more and more specific community users will be able to participate in some core decisions of the platform.

Specifically, MagicDAO members are divided into three levels: OG, Degens and Normies, Each DAO member not only has the right to vote, but also participates in curating Magic Eden's homepage, as well as participating in hacking challenges for its API beta.

Currently, there are some things that are already happening, such as the community voting for some carousels on the home page , and actively encourage developers to build various products, whether it is Watchlist monitoring, analysis tools, or related infrastructure in the game market.

In addition, as people re-enter more and more real life, Magic Eden also Holding some events through DAO, such as the two large-scale events held by the team for NFT LA and NFT NYC in the second quarter, has also become a very important part of expanding its community and NFT culture.

The road ahead

Today, Magic Eden enjoys a considerable lead in the Solana NFT market, and this has been done in less than a year, reflecting its Effective strategy and execution.

In order to grow, expand and reduce its own risks, Magic Eden's multi-chain development may be necessary Yes, but it is not yet known whether the network effect of its current NFT ecology can be replicated on other chains. In particular, its community is different from the creators and collectors of Ethereum NFTs, which may hinder its development into a new ecology, but needs to gain a new foothold and rebuild its use in the Ethereum community.

Additionally, as Ethereum scaling solutions gradually enter the market and gain adoption and the Solana network occasionally goes down Due to the impact of machines, Magic Eden's reliance on Solana's advantages in fast, low-fee transactions may be eroded by a similar experience on Ethereum, which will also provide better security with more verification nodes.

It remains to be seen whether it can continue to see stronger user growth in its NFT ecosystem and the release of more NFT collectibles , but after going through the troughs and peaks, Magic Eden should not be afraid of challenges and move forward.

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