Ethereum, the crypto-currency on which most NFTs are minted, dropped below $1,800 Friday, its lowest value in over a year. It’s a far cry from its peak in the high $4,000s last November.
With the drop, the mourning has begun, even among a crypto-community used to weathering the asset’s volatility. NFT platforms, however, are not wading through the five stages of grief before taking action.
In quick succession, major NFT platforms like Foundation, SuperRare, and OpenSea have announced major changes to the way they run their businesses.
While none of these pivots has been explicitly labeled as a response to the market, the timing and nature of the new initiatives seem designed to make up for the lack of enthusiasm in the market currently.
Take Foundation, for example.
Foundation is an NFT platform known for its high quality and focus on one-of-ones, or single edition NFTs (as opposed to large PFP NFT collections like Bored Ape Yacht Club, or Crypto Punks). This was partly possible because, to sell works on Foundation, an artist had to be invited by Foundation or by other artists already using the platform.
In mid-May, Foundation announced that it would be doing away with their invite-only strategy, which they framed as a shift away from the gatekeeping mentality of Web 2.0 (the internet we have today) to the greater freedom and democracy of Web3 (an internet experience built off of decentralized technologies like blockchain).
Yet, Foundation’s tight curation was what made it different from platforms like OpenSea, which has made significantly more money but have also been plagued by scams, hacks, rug-pulls, and all the other risks that come 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, Foundation seems like it’s focusing more on a new operating system initiative called Foundation OS, whose motto is “The building blocks for a new internet.” The operating system, a kind of key service infrastructure, is built off of the data sharing protocol Foundation built for its marketplace. Leaning on infrastructural offerings may seem like a more sustainable aspect of the business to focus on when short-term trading isn’t in vogue.
Sunil Singhvi, chief business development officer at the NFT platform Rarible, said that in this moment, having this kind of diversity is key (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 raft of things we’ve built alongside the marketplace,” Singhvi told ARTnews.
Meanwhile, NFT platform SuperRare believes it has found a way to respond to the shifting market without changing the core aspects of SuperRare’s identity.
“SuperRare represents trust,” CEO John Crain told ARTnews. However, Crain said that the company knew it had to try something new.
“Just having a marketplace isn’t something novel anymore. Creating an NFT isn’t something to write about. So this moment is really pushing people to add value and push boundaries,” He said.
Similarly to Foundation, SuperRare was a place to discover artists selling unique works, as opposed to the collectible-type PFP NFTs. Furthermore, SuperRare has never been a secondary market. Now, SuperRare is exploring both PFPs and the secondary market.
In partnership with Async Art, an NFT platform that specializes in creating big, generative projects, SuperRare offered its first massive collection called Across the Face, made 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 dove, a book, a Rubiks cube, and so on, with randomly paired accessories and color backgrounds.
SuperRare usually mints 20-30 works a day, a SuperRare spokesperson told ARTnews in an email, but working with Async has allowed them to handle a much larger load. Async minted 1,000 NFTs and then these were sold on the secondary market through SuperRare. The move is one that was tightly controlled, allowing SuperRare to widen 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 even knew what an NFT was, which meant operating on a shoe-string budget for years. For the many platforms that popped up during the 2021 boom, this may be their first time operating in a major downturn.
“In a bull market money is easy to get. But venture capital spending on crypto start-ups and stuff peaked in December,” Crain said. “In this market, investors are certainly going to be thinking twice about how they deploy capital, it’s not like, ‘Cool idea, here’s some money’ anymore.”
Whether or not these summer children-platforms will survive a crypto winter is a question no one can answer, especially when chasing the jagged peaks and dips of a market which promises to shoot up at the next moment.
But, if there is one platform that is too big to fail, it might be OpenSea. At a $13 billion valuation, OpenSea is undoubtedly the highest-valued NFT market around, but even this behemoth has been making some changes.
Unlike Foundation or SuperRare, OpenSea didn’t structure itself around exclusivity, but focused on getting the most amount of users possible from the get-go, which has helped OpenSea capture market share but has also meant sacrificing the quality of their service in the eyes of many crypto-enthusiasts. At this point, then, OpenSea didn’t have many options for how it could expand. In an incredibly savvy move, OpenSea is starting to open up its marketplace to NFTs minted on a cryptocurrency called Solana.
Like Tezos, Solana is a crypto infrastructure that is less energy intensive and is thus considered better for the environment. The same things that make it greener make it cheaper to use, meaning that gas fees on Solana, the fees that one pays when completing transactions (such as buying an NFT) are much, much lower than the gas fees for using Ethereum.
Solana is also valued much lower than Ethereum. Its peak price was around $200 and is now worth about $40. By offering Solana NFTs on OpenSea, the platform is enticing NFT collectors to keep buying without having to make the larger investments implicit in trading in Ethereum-based NFTs.
Solana NFTs on OpenSea are still in the beta phase, that is, still being tested.
Whether any of the changes that NFT platforms are pursuing will be effective is something that remains to be seen. Maybe the market will miraculously turn and none of this will matter anyway.
Or maybe not.