The market’s third-largest cryptocurrency exchange – and newly minted Fortune 500 member – has thrown its hat into the NFT ring.
When Coinbase went live with their new NFT marketplace, around one million users signed up for it almost immediately…
…and those million users clogged Coinbase’s “pipes” so much that the system became notably laggy – that’s a big deal in a market that moves as fast as crypto and NFTs.
The new marketplace simply couldn’t handle that modest volume. OpenSea, Gemini’s NFTs marketplace, has about 1.5 million users by contrast.
Still, on the surface, the Coinbase NFT market isn’t a terrible idea. Take a look at what’s under the hood – users can…
- Buy and sell NFTs
- Gift NFTs
- Referral program
- Auction their NFTs
- Sell NFT bundles and collections
It offers the same vanilla and user-friendly interface as Coinbase’s crypto offering; the look-and-feel is pretty easy to get, you can filter searches, and there are multiple crypto wallet options for paying for those NFTs. Good “UX,” or user experience, you might say.
But just because something looks good doesn’t mean it’s a necessary product. The NFT space already has reputable marketplaces like OpenSea and Nifty Gateway with more than one million users combined. To become the industry leader in NFTs that it wants to be, Coinbase has to convert a decent chunk of those users to their platform.
But can they? Or is the NFT space already too crowded for Coinbase to snatch up significant market share?
The social element of the Coinbase trading platform has always helped drive its popularity, and this is likely to play a role in Coinbase’s NFT platform. The Coinbase NFT Marketplace has kind of an Instagram “feel” to it. Management clearly knows where its bread is buttered, and they obvious feel pretty confident that users are accustomed to their UX.
For instance, one cool feature Coinbase uses is the NFT “descriptions.” As you open the marketplace, you will see attributes and product details like volume, price of ETH, and owners’ comments.
Sounds great, but…
I’m still waiting to hear why experienced NFT traders and collectors should move their operations from industry leaders like OpenSea, Nifty Gateway, or LooksRare and into Coinbase.
With any new product of this magnitude, there will be bugs that need working out. Coinbase is a little bit late to this game, and they don’t have any functionality that an existing NFT marketplace doesn’t already offer.
Without any new features or something unique distinguishing Coinbase as an NFT marketplace, the company will need to incentivize users to join their platform through freebies or other marketing tactics – two things I wouldn’t rely on when deciding where to buy or sell NFTs.
My official take: there isn’t anything special enough about the Coinbase NFT marketplace for it to make a real dent in the NFT space – or in COIN’s stock price.
Chief Crypto Strategist, American Institute for Crypto Investors