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Coinbase NFT – Exploring Coinbase’s NFT Marketplace

Currently in closed beta, Coinbase NFT is a peer-to-peer marketplace for buying, selling, and trading non-fungible tokens (NFTs). The leading crypto exchange has a proven track record of building products and businesses. However, Coinbase’s NFT marketplace is up against some serious competition in an already well-established industry.

Coinbase NFT is a social marketplace for non-fungible tokens (NFTs). The platform is the latest product offering by the US-based crypto firm. Coinbase is a leading North American crypto exchange and was publicly listed on Nasdaq in 2021. Coinbase has extended its crypto services to provide compliance solutions for governments and financial institutions after acquiring blockchain intelligence firm Neutrino. However, Coinbase’s NFT marketplace aims to capture a different part of the market entirely. 

In this article, we’re going to dive deep into Coinbase’s NFT marketplace. We’ll explore the background of the prominent crypto exchange. Plus, we’ll discuss some of the best features of the new Coinbase NFT platform. Furthermore, we’ll take a look at some of Coinbase’s competitors and discuss how they stand up against each other.

Moralis Academy is the ultimate Web3 and blockchain education platform online. If you’re new to crypto, you’re in good hands. Check out the Crypto for Beginners course to learn how to safely buy, sell, and trade crypto assets using the Coinbase crypto exchange. Also, this course teaches students about consensus mechanisms, smart contracts, and the differences between Bitcoin, Ethereum, and altcoins. Join our community of over 30,000 students and start your crypto journey today with Moralis Academy! In addition, save our “Crypto Exchanges in 2022” article for later reading to learn more about the top crypto exchanges!

What is Coinbase?

Coinbase is a centralized cryptocurrency exchange that enables users to buy, sell, and trade more than 100 crypto assets. As the largest US-based crypto exchange, Coinbase is often a go-to exchange for anyone new to the crypto realm. At the time of writing, Coinbase has more than 89 million users, $547 billion in quarterly volume, and $278 billion in assets under management (AUM).

Coinbase (its logo) written in blue text with white background

Founded in 2012, Coinbase currently has over 3,700 employees globally and operates in more than 100 countries. The company was publicly listed as Coinbase Global, Inc. (COIN) in April 2021. Co-founder and CEO Brian Armstrong is an extremely prominent and influential figurehead in the blockchain industry. Furthermore, Coinbase supports an ecosystem of approximately 11,000 financial institutions.

Two separate exchanges operate under the Coinbase umbrella. First, the classic Coinbase exchange is an easy-to-use crypto exchange available for web, Android, and iOS. Coinbase facilitates simple asset swaps using a sleek interface. Users can deposit fiat currencies and exchange them for crypto assets or vice versa. Plus, Coinbase offers staking rewards for locking up crypto assets.

Coinbase Pro is the “pro” trading arm of the exchange. Anyone with a Coinbase account can access Coinbase Pro. It gives users access to a wealth of professional trading features and trading types. This includes limit/stop orders and trading indicators. Both Coinbase and Coinbase Pro use state-of-the-art security features. Moreover, around 98% of users’ assets are stored offline in cold storage. Plus, all users must implement two-factor authentication. Other product offerings include the self-custodial Coinbase Wallet, Coinbase Intelligence, and the Coinbase crypto debit card.

What is an NFT?

A non-fungible token (NFT) is a unique type of digital asset on the blockchain. NFTs hold unique identifying data that provides an immutable record of ownership. Fungible assets such as Bitcoin (BTC), Ethereum (ETH), or the US dollar (USD) are interchangeable. That is to say, you can swap one ETH for another ETH, and one BTC is worth the same in your wallet as it is in someone else’s. Likewise, if you took out a loan in USD, you wouldn’t be expected to repay the loan using the exact same banknotes. Accordingly, non-fungible assets are not an effective medium of exchange. However, NFTs enable anyone to “tokenize” assets on the blockchain.

Coinbase's NFT marketplace - is currently in beta.

Tokenizing an asset on the blockchain entails creating a digital representation of that asset. Just about anything can be tokenized as an NFT. For example, NFTs have become widely used for tokenizing art, collectibles, fan experiences, music, real estate, ticketing, virtual property ownership, identification, and more. Also, NFTs have become an essential part of crypto gaming platforms. Thanks to NFTs, players gain transparent ownership of verifiably scarce in-game items such as swords, potions, and shields.

One of the most famous examples of an NFT collection is Bored Ape Yacht Club (BAYC). This collection of 10,000 unique ape pictures went on sale for 0.08 ETH each. However, the most expensive of these apes would sell on a secondary market for 769 ETH, worth around $2.3 million, at the time of sale.

NFT Marketplaces

NFT marketplaces are platforms that enable users to buy, sell, and list NFTs and NFT collections. Creators can list various types of NFTs, including collectibles, art, in-game items, and music. Different marketplaces offer several auction options for buying and selling NFTs. Plus, users can browse their favorite artists and collections. NFT marketplaces allow artists, audiences, and collectors to build decentralized communities. Also, some marketplaces implement a decentralized autonomous organization (DAO) model to facilitate community governance.

What is Coinbase NFT? 

Coinbase NFT is a social NFT marketplace that aims to be “the world’s easiest-to-use NFT marketplace”. Throughout the beta launch, Coinbase NFT will enable users to connect with their favorite artists, subscribe to NFT launch events, create their own NFTs, and sell them. Initially, the marketplace will support Ethereum NFTs. However, other blockchain networks will become available in the near future.

Coinbase's NFT marketplace.

Coinbase’s NFT marketplace will be open to anyone over the age of 18. Users can connect to the NFT marketplace using a Coinbase exchange wallet or any self-custodial Ethereum wallet. The goal of the Coinbase NFT platform is to encourage adoption and promote awareness of the benefits of NFTs. Coinbase NFT will omit transaction fees for NFT purchases for a limited time to further encourage adoption. However, the marketplace aims to maintain lower than average fees for NFTs in the future.

Coinbase NFT aims to implement a Web3 social marketplace to allow creators, artists, and collectors to interact directly. NFT enthusiasts at the top of Coinbase NFT’s waiting list get the opportunity to participate in beta testing of the platform. This includes creating a profile and showcasing NFT collections. Also, users can follow, comment, and like other profiles and content via Coinbase’s NFT marketplace.

Many of these social features are not recorded on the blockchain. However, the company aims to decentralize many of these components in the future. Also, Coinbase’s NFT marketplace will only censor or moderate content that is offered illegally in specific geographies. For example, content that is illegal in the US could still be available throughout Europe and Asia. Moderation and censorship are contentious and divisive topics in the NFT community. However, Coinbase’s NFT marketplace aims to be permissionless within the boundaries of regional law enforcement. 

Reaction

With 1.5 million people signing up for the waiting list, Coinbase NFT appears to be in high demand. However, reactions to Coinbase’s NFT marketplace were mixed. Coinbase’s stock, COIN, fell to an all-time low two days after the launch. Several prominent media outlets and analysts suggest that scaling the marketplace and introducing new features will be the ultimate test. However, Coinbase NFT will have to create significant value for users if it is to compete with platforms such as OpenSea.

The interface of Coinbase's NFT marketplace.

Despite these obstacles, Coinbase is an industry titan. Few crypto companies are as well-positioned to challenge the already saturated market as Coinbase. Below, we’ll take a look at some of the biggest competitors Coinbase NFT will come up against in the coming months.

Competitors to Coinbase’s NFT Marketplace

Now that you’re familiar with Coinbase’s NFT marketplace, let’s take a look at some of its competitors. Below, we’ll discuss some of the most prominent NFT marketplaces for buying, selling, and showcasing NFTs.

OpenSea

OpenSea is the most prominent decentralized marketplace for buying, selling, and minting non-fungible tokens (NFTs). Dubbed the “eBay for NFTs”, OpenSea was founded in 2018 by Alex Atallah and Devin Finzer and was the first marketplace of its kind. The platform has hosted some of the biggest NFT drops and launches and has been pivotal in the widespread success of NFTs. OpenSea is available on Ethereum, Polygon, Klaytn, and Solana. 

OpenSea vs Coinbase's NFT marketplace.

Also, the platform features a “gasless marketplace” on Polygon. To interact with OpenSea on a web browser, you’ll need to create an account and have a Web3 browser wallet such as MetaMask or Phantom. Alternatively, OpenSea is available for Android and iOS.

Rarible

Rarible is another prominent cross-chain NFT marketplace for buying, selling, and minting NFTs. Available on Ethereum, Tezos, Flow, and Polygon, users can access a range of unique NFT collections across multiple genres. While OpenSea supports more than 150 payment options, Rarible only supports four. However, Rarible also supports card payments on some NFT collections. Rarible has higher levels of decentralization than OpenSea, thanks to the RARI governance token. Moreover, holders of RARI tokens can vote on proposals to make changes to the platform.

Coinbase's NFT marketplace compared to Rarible.

While the two NFT marketplaces offer many of these same social features, Rarible offers a chat function, whereas OpenSea does not. Also, the fee structure for royalties is quite different between the two platforms. On OpenSea, users can set a royalty fee of 10%, whereas Rarible users can set royalty fees of up to 50%. Furthermore, OpenSea is available on the web and as a mobile app. On the other hand, Rarible is only available as a web application. As the first NFT marketplace, OpenSea has a strong user base of around 500,000 unique monthly users. Conversely, Rarible has a smaller following of under 10,000 unique monthly users.

LooksRare

LooksRare is a next-gen multi-chain NFT marketplace that rewards users for their participation. Users can earn up to 160.25% APY by staking the native LOOKS token. This incorporates wrapped ETH (wETH) from daily transaction fees and additional LOOKS tokens. The LooksRare NFT marketplace operates in much the same way as Rarible and OpenSea. However, the platform offers fees around 20% lower than OpenSea. Also, creator royalties are paid instantly in the LOOKS token. A downside of LooksRare is that it’s only available for web browsers. 

Following the launch of LooksRare in January 2022, the platform achieved almost three times the daily trading volume and protocol revenue of OpenSea. Despite this, OpenSea still maintains around ten times the amount of unique users as LooksRare.

Coinbase NFT – Exploring Coinbase’s NFT Marketplace – Summary 

Coinbase’s NFT marketplace aims to promote the mainstream adoption of NFTs. By making NFTs fun and accessible, Coinbase NFT is placing NFTs in front of one of the largest user bases in the industry. In the future, Coinbase NFT will introduce new features, including NFT airdrops, minting, and token-based communities. In addition, the team anticipates further integrations with Coinbase wallets and exchange accounts. Furthermore, the platform has many partners and collaborators on board to help establish Coinbase NFT as the go-to NFT marketplace. 

Coinbase's NFT marketplace UI.

Coinbase NFT allows users to chat, up and downvote content, and comment directly on NFT pages. The social element of Coinbase’s NFT marketplace intends to create more conversations around NFTs and help to build a thriving NFT community of artists and collectors. The competition is stiff in the NFT space. However, Coinbase is one of the most prominent names in crypto. Only time will tell if Coinbase’s NFT marketplace will be able to scale and generate revenue.

There has never been a better time to learn a new skill in an emerging tech field. Blockchain and Web3 are becoming ubiquitous sector-wide. Plus, blockchain developers can earn a handsome salary. If you want to become a blockchain developer but have no coding experience, check out the JavaScript Programming for Blockchain Developers course at Moralis Academy. Here, we teach students how to build a decentralized exchange (DEX) from scratch using JavaScript.

Following this, be sure to check out the Ethereum Dapp Programming course to learn how to create your own NFT marketplace. Students will also gain a firm understanding of industry-standard toolings such as Solidity, Web3.js, MetaMask, Truffle, and Ganache. Kickstart your Web3 education today with Moralis Academy! Also, check out our “Why to Learn Web3 Development” article for more reasons to become a Web3 developer!

ivanontech

Written by Ivan on Tech

April 29, 2022

Written by IvanOnTech
April 29, 2022
Ivan is an international speaker, educator, developer and data scientists. Ivan’s YouTube channel Ivan on Tech has become an international phenomenon, spreading blockchain knowledge all over the world and accumulating over 450,000 subscribers.

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