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History of the NFT Market: From Singular Proprietary to Diverse and Flourishing, the Evolution of NFT Trading Over 10 Years.

2023-01-13 16:10

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Original Title: "A Brief History of the NFT Market: From Singular Proprietary to Diverse and Flourishing, the Evolution of NFT Trading Over 10 Years"

Original Author: jakegallen.eth

Translated by: BaiZe Research Institute

Historical NFT" is a term used to describe earlier NFT projects that are considered "outdated" or from the earlier stages of the NFT ecosystem.

"Internet archaeology" is the study of the history and evolution of the internet and its various platforms and technologies. It involves examining and documenting the various products that have shaped the internet as we know it today, which may include early chat forums, social media platforms, websites, and other internet products.

Now, the term "NFT Archeology" has also appeared in the NFT community, and "NFT archeologists" are studying the history and evolution of NFTs, sorting out those ancient NFT projects. This involves researching the early experiments and development of NFTs, as well as the various platforms and communities that have emerged around them.

In this article, I will attempt to summarize the development history of the NFT market (January 2014 - December 2022).

Counterparty was launched in January 2014 with the aim of becoming a platform for Bitcoin users to create derivative financial assets and tools. It became the birthplace of some of the earliest NFTs, such as Spells of Genesis, Rare Pepes, and Sarutobi Island. Counterparty's native currency XCP is created through a mechanism called "proof of burn" - BTC is burned to create XCP. The decentralized exchange (DEX) built into Counterparty was innovative at the time and preceded many of the DEXs commonly seen in the blockchain industry today. For a long time, Counterparty was relatively unknown, but in recent years, especially during the NFT craze of 2021, it has become popular. Today, it has a thriving ecosystem, including XCP Dispensers, Emblem Vault, and Scarce City.

Dogeparty is a branch of Counterparty, launched by Adam B. Levine and others at the end of 2014. It uses the same "burn proof" mechanism as Counterparty to create its native token XDP, which requires users to destroy Dogecoin in order to receive XDP. Dogeparty became the primary choice for some users who wanted to offset the increase in Dogecoin supply due to its unlimited inflation protocol. Dogeparty was active for about a year and then gradually faded from people's sight in 2015. In 2021, the Dogeparty Foundation was established, and the project was revived. The project's assets can currently be purchased through XDP Dispensers and Emblem Vault.

Ascribe is an NFT platform based on the Bitcoin network, which operated from 2014 to 2018. It hosted 31,900 Tokens for 13,500 users. However, in early 2018, the Ethereum blockchain introduced the ERC-721 standard for NFTs, allowing artists to create their artwork directly on Ethereum. This caused most users to migrate from Ascribe to Ethereum, and eventually, Ascribe decided to shut down its platform. When it closed, all NFTs on the platform were lost and could not be claimed by anyone. One of Ascribe's founders stated that there may be hope to recover these "vintage" NFTs in the future.

EtherID is an identity protocol that was launched on November 29, 2015. It is similar to Namecoin Identities, which was launched in 2012, and Ethereum Name Service (ENS), which was launched in 2017. One notable feature of EtherID is that it has a built-in marketplace that allows users to buy, sell, and transfer identity records to each other. This may be the first NFT marketplace on Ethereum. EtherID can currently be purchased on OpenSea.

Spells of Genesis (SOG) is the first known blockchain game that incorporates NFTs. It was developed by Shaban Shaame and EverdreamSoft and was launched in 2017. It is a mobile game that combines elements of trading card games (TCGs), arcade games, and fantasy adventures. SOG's cards are issued through Counterparty, and once the issuance of a card is locked, it cannot be created again. This ensures the authenticity and rarity of the cards. SOG assets can currently be purchased through XCP Dispensers or Emblem Vault.

PixelMap is an NFT project created by Ken Erwin in 2016. It was launched before the first "department store" NFT market OpenSea and a year after the ERC-20 (fungible token) standard. During this time, many pre-ERC-721 NFT projects like PixelMap had to have their own trading markets, which may not be typical of the markets we see today, but played an important role in the early development of the NFT industry. Wrapped PixelMap can currently be purchased on OpenSea.

RarePepe is often considered the "birth of crypto art" because of their decentralized origins. They started out as a joke in a Telegram group and evolved into a collection of over 300 artists and 1774 NFTs. After RarePepe was released on Counterparty in September 2016, the community realized they needed a place to store and trade these assets. In response, Joe Looney launched the RarePepe wallet, which has since become a popular destination for RarePepe collectors. Currently, RarePepe can be purchased on pepe.wtf, Scarce City, XCP Dispensers, and Emblem Vault.

Curio Cards was launched in May 2017 and is considered the first "art NFT series on Ethereum". Unlike RarePepe, which was co-planned by a group of artists, the artists of Curio Cards anonymously submit their works to the Curio Cards team, and the team sends the submitted works to the community for voting. The works will only be used if the vote is passed. Curio Cards uses a "vending machine" on their website to distribute their NFTs, and each vending machine has a card supply set by the artist. However, at that time, the project only issued a total of 31 cards, and it was not until 2021, when the wider NFT community rediscovered the project, that it was completely sold out. Wrapped Curio Cards can currently be purchased on Opensea.

CryptoPunks is widely regarded as having inspired many developments in the NFT world, including personal profile picture (PFP) projects, the ERC-721 standard, and a standard supply of 10,000. In addition to these innovations, the CryptoPunks market was also groundbreaking and has persisted partly because it is embedded in the V2 code. However, the market has evolved over time. Developer Larva Labs made a series of improvements to the market, forming today's iconic CryptoPunks brand. Currently, Wrapped CryptoPunks V1 can be purchased on OpenSea, and CryptoPunks V2 can be purchased on CryptoPunks.app.

MoonCatRescue is one of the earliest generative NFT projects, launched by Ponderware in 2017. It allows users to randomly generate over 4 billion patterns of cats.

The market function of MoonCatRescue is similar to CryptoPunks. Bidders need to deposit ETH into the market contract to make an offer for MoonCats. Cat owners can sell their cats and accept offers through the "request" function. Currently, domesticated MoonCats can be purchased on OpenSea.

Dada launched their first NFT project, Creeps & Weirdos (CW), along with a built-in marketplace in 2017. This marketplace is known for being the first to offer creator royalties. Prior to CW, built-in marketplaces such as CryptoPunks and MoonCatRescue did not offer royalties to creators. However, OpenSea, which was launched a few months later, has become the current leader in protecting creator royalties. Dada's introduction of creator royalties in the CW marketplace may have had a lasting impact on the early NFT industry. Wrapped Creeps and Weirdos can now be purchased on Opensea.

As a branch of the Counterparty platform, Monaparty was launched on the Monacoin Bitcoin sidechain at the end of 2017 to create Tokens on the Bitcoin blockchain. On January 8, 2018, Monaparty's most popular NFT series, MonaCard, was launched. Like RarePepes, MonaCard was planned by the community and has sold over 6,000 copies in the past four years. MonaCards can currently be purchased on Monapallete and Emblem Vault.

CryptoKitties is an NFT-based blockchain game launched by Dapper Labs on November 23, 2017. It is recognized as a pioneer in the NFT industry and gained huge popularity in 2017, with a large number of cats breeding, buying, and trading almost clogging the Ethereum network. Despite facing competition from other games, CryptoKitties remained popular for a long time and is still widely known today. In addition to innovation, CryptoKitties' built-in market is also known for its user-friendly interface and appearance, with sorting, categorization, and other functions, which have been imitated by many other NFT markets. CryptoKitties can currently be purchased on the built-in market of CryptoKitties and Opensea.

Opensea is a comprehensive NFT marketplace that was launched in December 2017. It is known as the first marketplace to aggregate NFTs from multiple projects. Within a few months of its launch, Opensea had over 30 different NFT projects listed on its platform. At that time, most NFT projects were a mix of ERC-20 tokens until the first ERC-721 standardized project, Su Squares, was introduced in March 2018. It was only later that Opensea established itself as an ERC-721 compliant marketplace. Over the past five years since its launch, Opensea has become a leading NFT marketplace on Ethereum and has expanded to other blockchains such as Solana, Polygon, Binance Smart Chain, and Avalanche.

Super Rare is an NFT marketplace carefully curated for artists, launched in April 2018. It is one of the earliest platforms to implement a whitelist application process for artists. To become a Super Rare artist, individuals must apply and receive approval from the platform before they can publish their works on their own designed "storefronts". Super Rare's standard artist royalty is 10%, and they have launched an ERC-20 Token called RARE (2021) and RarePass (2022).

KnownOrigin is an NFT marketplace that launched in April 2018 as a platform for artists to authenticate, showcase, and sell their artwork. This "artist-first" marketplace is similar to Super Rare and competes with it for artists' attention. KnownOrigin was acquired by eBay in June 2022 and continues to operate.

Nifty Gateway was launched in 2018, bringing a new feature to the NFT market: the ability to purchase NFTs with US dollars. This was a significant development as no other NFT market offered this payment option at the time. In 2019, Nifty Gateway stood out from the competition in the NFT market through its NFT auction system and caught the attention of crypto entrepreneurs, the Winklevoss twins, who later acquired the platform and integrated it into the cryptocurrency exchange Gemini. Despite facing competition from other markets, Nifty Gateway remains the preferred platform for auctioning and issuing NFTs.

Rarible is an NFT marketplace that was launched in the winter of 2019. Just six months later, it launched the first-ever native governance token, RARI. RARI aims to reward collectors and creators and envisions a future where Rarible becomes a decentralized autonomous organization (DAO). However, the token is primarily used for "wash trading," where users can conduct "left-hand-to-right-hand" NFT trades on the platform and receive RARI rewards. Since then, Rarible has evolved to charge zero fees to users who lock up their RARI tokens and has added support for other blockchains, including Tezos, Solana, and Immutable X.

Foundation is an NFT issuance platform that was launched in May 2020. It opened its NFT market to the public in February 2021 and provides a unique "invitation-only" system for NFT creators. To create NFTs on the platform, creators must have an invitation code, which can only be sent by other creators who have already sold at least one NFT on the platform. Collectors can participate in auctions without any restrictions. Foundation is an "artist-centered" platform that focuses on protecting creator royalties and provides a range of tools and utilities for creators, including auction systems and coin casting portals.

NBA Top Shot is an NFT project released on the Flow blockchain in 2020 by Dapper Labs, the creators of CryptoKitties. The marketplace features categories such as players, teams, collections, and challenges. NBA Top Shot is similar to traditional basketball cards, but uses dynamic videos instead of static images. The series became popular in early 2021, with some NFTs selling for over $100,000 and helping thousands of people enter the world of NFTs. Many believe that NBA Top Shot played an important role in the 2021 NFT craze.

NFTX is an NFT protocol launched by developer Alex Gausman in January 2021. It is the first protocol to launch an NFT index fund, bringing traditional financial attributes into the NFT world and becoming a true DeFi x NFT product. NFTX allows users to create ERC-20 Tokens supported NFT pools that represent the amount of instant liquidity in the fund. This is an innovation in the NFT market as it allows users to purchase "partial shares" of NFTs using ERC-20 Tokens.

Royal is an NFT marketplace dedicated to music NFTs. It was founded by renowned music artist and early NFT pioneer DJ 3LAU and launched in early 2021. In just a few short months, Royal has received over $16 million in investment from Founders Fund and Paradigm. It is the second NFT marketplace of its kind (after art NFT marketplaces such as Super Rare, KnownOrigin, and Foundation), focusing specifically on music NFTs. Royal aims to revolutionize the music industry through the use of NFTs.

OBJKT is an NFT marketplace launched on the Tezos blockchain in July 2021. It is currently the largest NFT marketplace on Tezos, focusing on art NFTs. OBJKT was originally a platform that provided tools for another Tezos NFT marketplace, Hicetnunc (HEN). However, after HEN faced challenges, OBJKT took over and became the leading NFT marketplace on the Tezos blockchain.

Magic Eden (ME) was launched in September 2021 with the aim of becoming a top NFT marketplace on the Solana blockchain. At the time, the Solana ecosystem was thriving and the NFT space had already matured. In June 2022, Magic Eden raised $130 million in funding and integrated the platform onto the Polygon blockchain. The company plans to become a leading multi-chain NFT marketplace in the future.

Although Scarce.City was launched at the end of 2020, it has a unique history. It was initially created as a marketplace for trading physical art and assets using BTC, utilizing the Bitcoin Lightning Network for low-cost and fast payments. In the summer of 2021, it launched an NFT marketplace.

Binance NFT was launched in June 2021 as a way for the Binance ecosystem to support NFTs. The platform has been successful due to its low fees on the BNB Chain (formerly BSC) and user-friendly interface. However, it has also faced criticism for the prevalence of scams on the platform and the centralization of the cryptocurrency exchange platform Binance. Despite these challenges, Binance NFT remains a popular marketplace in Binance's NFT ecosystem.

Quantum was launched by renowned NFT photographer Justin Aversano in October 2021. It is an NFT marketplace that focuses on photography NFTs. It aims to attract artists to plan and release NFT collections, making it easier for collectors to obtain NFT photography works. Since its launch, Quantum has expanded to open a physical store in Los Angeles and has also added digital art to the platform.

Sudoswap was launched in October 2021 as a fully on-chain AMM protocol for NFT trading. It gained popularity in mid-2022 for offering 0% creator royalties and low market fees of 0.5%. During a difficult period in the cryptocurrency market, many traders were looking for ways to preserve their funds, and Sudoswap caught their attention. As Sudoswap gained market share, it caused some confusion in the industry, with some markets following suit and offering 0% royalties, leading to a proliferation of creators. Today, Sudoswap is a popular choice for a large number of NFT traders.

Looks Rare suddenly appeared in January 2022 and conducted a "vampire attack" on OpenSea, a decentralized market that provides 100% of transaction fees to buyers, sellers, and stakeholders on the platform. According to users' OpenSea transaction history, Looks Rare airdropped LOOKS tokens to users. In the first 30 days after launch, users attempted to obtain more LOOKS airdrops by cleaning transactions. The completely anonymous team of 40 employees recently announced that Looks Rare V2 will be deployed in the first quarter of 2023, including an app version and NFT aggregator.

X2Y2 was launched in a similar way to Looks Rare shortly after, in February 2022. They initiated an ILO (Initial Liquidity Offering) in February, attracting thousands of investors, and subsequently airdropped X2Y2 Tokens to users based on NFT transaction records. The platform experienced some turbulence when it announced the cancellation of creator royalties, but was forced to retract this decision a few months later. Today, the platform has entered the NFT lending business and has gained some market share in this field.

Coinbase NFT may be considered the most disappointing NFT market release in history. The platform was announced in October 2021, but was not publicly available until April 2022. In the first three months of its launch, Coinbase NFT's sales failed to exceed $1 million, and only 1,200 people registered. Its "Social NFT Marketplace" allows users to make friends and comment on NFTs, similar to social media platforms. Nevertheless, by the end of 2022, Coinbase NFT still failed to make any waves in the NFT industry.

ENS Vision was launched in March 2022 as a tool to help ENS enthusiasts search for ENS names. In the following months, ENS experienced a frenzy. For comprehensive NFT markets like OpenSea, the number of ENS transactions and demand became too much, and ENS Vision saw and seized the opportunity. ENS Vision has now become a leading ENS market with lower market fees and additional tools that other markets cannot provide.

The top decentralized trading platform Uniswap acquired NFT Aggregator and Floor Sweeper Genie in June 2022, indicating its intention to enter the NFT market. With its experience in developing decentralized trading platforms, Uniswap is expected to become a top NFT market over time. There are indications that Uniswap will allow the purchase of NFTs using multiple ERC-20 tokens, which could give it a significant advantage in the market.

Blur raised $11 million in seed funding in early 2022 led by Paradigm. It wasn't until October 2022 that Blur launched its NFT marketplace, which is a platform built for professional traders with a data-driven user interface. It is the first NFT marketplace to offer both an NFT aggregator and a marketplace. With 0% market fees and optional creator tips, as well as a BLUR Token airdrop incentive in January 2023, Blur quickly became a top NFT marketplace. However, the sustainability of the platform beyond the initial token incentive remains to be seen.

This is the brief history of the NFT market!

Since the creation of the first non-fungible asset "bitcoin.bit" on April 21, 2011, it has been more than ten years since the Namecoin blockchain. This is a crazy history, and it is clear that people's interest in the history of NFTs will only grow over time. As we move forward, it will be interesting to see how the NFT market evolves and what new stories will emerge.

Overall, becoming a member of the NFT industry and witnessing its development and evolution is so exciting!