Coinbase and NFTs
The Coinbase NFT marketplace was launched in the spring of 2022, and it was created as part of Coinbase’s strategy for allocating cash, which sees 10% of its resources devoted to venture opportunities. The platform aims to enable users to buy, sell and trade NFTs or non-fungible tokens, which are unique digital assets that are used to prove the ownership of an item, often digital art.
Coinbase’s NFT marketplace was designed to compete with other NFT platforms, such as OpenSea and Blur. However, since its launch, the platform has struggled to gain traction, with trading volume of less than 3 Ethereum in the past week, according to a Dune Analytics dashboard. This is a stark contrast to OpenSea and Blur, which have seen around 303,000 and 53,000 sales within the past week, respectively.
We recently shared that we are pausing creator Drops on the NFT marketplace to focus on other features and tools that creators have asked for.— Coinbase NFT (@Coinbase_NFT) February 1, 2023
To be clear: We are not shutting down the Coinbase NFT marketplace.
Despite the weak volume, Coinbase has indicated that it is not backing away from its NFT venture anytime soon. Coinbase President and COO Emilie Choi stated that the company continues to view Coinbase NFT as a worthwhile project, and that they see medium and long-term opportunities for the platform. Coinbase recently stated that it remains committed to its NFT marketplace venture, despite a significant drop in trading volume and growing concern from shareholders. During an earnings call with investors and analysts, Coinbase faced questions about the health of its NFT marketplace, which was launched in the spring of last year.
Shareholders wanted to know how much money the company had lost related to the venture and how it planned to reduce the burn associated with running the business. They also inquired about the future of the marketplace and how Coinbase intended to increase its market share. According to a Dune Analytics dashboard, Coinbase NFT has seen only 41 sales and less than 3 Ethereum in volume worth roughly $4,900 over the past week, making it a virtual ghost town compared to other NFT marketplaces like OpenSea and Blur, which have seen around 303,000 and 53,000 sales within the past week, respectively.
Despite not disclosing specific project-related losses, Coinbase President and COO Emilie Choi stated that the company still considers Coinbase NFT a worthwhile project. Choi also noted that Coinbase has a lean team working on the project, but the company is not giving up on it. However, the company is now dedicating fewer resources to the venture than it did in the past. The Coinbase NFT team has realigned its resources to focus on high-impact areas for users. The team aims to bring increased focus and efficiency to a smaller set of high-impact focus areas within Coinbase NFT.
In response to the news that @opensea no longer enforces creator royalties, we have blocked their marketplace and all others that participate in this practice. @Coinbase_NFT will be our preferred marketplace to buy and sell @DeathbatsClub . 👇— M. Shadows (@shadows_eth) February 20, 2023
NFTs are unique digital tokens used to prove the ownership of an item, often digital art. The ecosystem surrounding NFT trading has recently undergone a shakeup as Blur and OpenSea battle it out for the top spot, prompting OpenSea to slash creator royalties as Blur’s volume surged ahead. Meanwhile, Coinbase NFT has been scaling back some elements of its business.
The venture stated that it was “pausing” future NFT drops with creators to “focus on other features and tools that creators have asked for,” according to a recent tweet. Despite this, Coinbase could stand to benefit from the shift as Blur and OpenSea put less emphasis on creator royalties in the overall NFT market.
Coinbase NFT was created as part of the exchange’s strategy for allocating cash, with 10% of its resources devoted to venture opportunities. Choi noted that Coinbase is taking “a more rigorous approach to investment in new and unproven products,” yet will do so “in a very lean, efficient way and get back to just a smaller team.” Although the project is scaling back in some ways, a spokesperson for Coinbase stated that the NFT marketplace has a long road ahead. The company sees a huge long-term opportunity to help customers discover and create NFTs, engage in social connections, and find communities.