Launch of NFT marketplace Universe.xyz, what do we know?
Weekly report with highlights from NFT universe, 11th-18th March 22
NFTmemo by Mattbullish - synthesis of NFT news & investments, interesting projects, overview of NFT activity on Ethereum and Solana blockchains and weekly analysis: Launch of new NFT marketplace Universe.xyz, what do we know?
What happened - selected topics
The news were this week heavily dominated by Yuga Labs. Further confirmation of plans to integrate NFTs by Facebook and Spotify, Gamestop confirming earlier intention to launch own NFT marketplace.
Supposedly a deck from Yuga Labs leaked to the hands of The Block, which triggered discussion on roadmap incl. sale of virtual land and later announced as outdated by Co-founder;
ApeCoin (tokenomics, summary, Yuga Labs 15% + BAYC founders 8% of tokens) launched yesterday as primary token for all products and services incl. planned P2E game MetaRPG by Yuga Labs & is owned/operated by ApeCoin DAO. Next to DAO also Ape Foundation was established to serve as legal steward through which DAO operates. BAYC holders could claim an $APE airdrop, funny fact - someone borrowed 5 BAYCs from NFTX to claim $APE and returned them in one transaction;
The Ape Foundation board had first public discussion yesterday, board for 1st 6m: Alexis Ohanian (776/Reddit), Amy Wu (FTX), Yat Siu (Animoca Brands), Maaria Bajwa (Sound Ventures) and Dean Steinbeck (Horizen Labs).
South by Southwest (SXSW) festival was attended by several NFT projects such as Doodles, Flufworld, Sandbox or ASM and NFTs were used for entry at certain events (I recommend insightful take on SXSW by Platformer)
Investments
Investments into NFT projects were this week traditionally dominated mainly by blockchain gaming with Animoca Brands involved in multiple investments. Two notable investments are UNLOC and Magic Eden on the SOL ecosystem.
UNLOC, a platform providing loans against NFTs on Solana as collateral, raises $1.25M, seed round, $15M valuation (link)
Magic Eden, largest Solana NFT marketplace, raises $27M, series A (link)
LiveArtX, a premium NFT marketplace focused on artists, galleries, and collectors, raises $4.5M, seed round (link)
Project watchlist candidates
LandWorks, a project from EnterDAO that enables users to lend and rent virtual land. It currently supports only Decentraland, but with moving closer to metaverse adoption, this project could provide an interesting use case.
Artiva helps you build your own NFT marketplace with no coding knowledge. Your marketplace is then placed on .artiva.app subdomain. It is yet another platform next to Manifold and ultimately Universe that allow creators to build their own platform
Ethereum & Solana blockchain NFT activity
Looking at activity on Ethereum based on USD volume we can expect a significant improvement in OpenSea volume this week of $462.01M vs. previous week $350.81M, currently ~31.7% increase (LooksRare volume ignored due to wash trading). We can say with confidence that Yuga Labs news contributed significantly to NFT activity on ETH as volume was heavily dominated by Yuga Labs collections.
Weekly NFTs trading volume on Ethereum blockchain by marketplace [USD, 3m]
Looking at NFT activity on Solana blockchain it remains fairly similar to previous week. DappRadar reports 7d USD volume 101.32M on the biggest NFT marketplace Magic Eden, a ~4.8% drop compared to previous week of $106.52M. The increase of NFT activity on Ethereum chain could be therefore driven mainly by Yuga Labs news and does not change the macro picture of NFT market.
Launch of new NFT marketplace Universe.xyz, what do we know?
Universe protocol is expected to launch it´s marketplace next week and there are not many eyes on it in all the current Yuga Labs noise. Universe protocol is intended to be social media NFT platform built on Ethereum and aims to provide artists with a set of digital solutions (minting, marketplaces, social tools, NFT tools, and auctions) to easily mint and monetize NFTs.
Universe however brings on the table several important features & characteristics that distinguish it from the current market leader OpenSea:
Decentralization of smart contracts - the artists and collection creators will unlike on OpenSea own the smart contract of the project;
Decentralization of data - Universe in the long run intends to store all data on decentralized blockchain such as ICP;
Community-owned - in xyzDAO $XYZ holders are given voting rights to participate fully on the future of the project. Token holders were also able to vote on the launch of marketplace.
Strong team with all-star contributors
I think that one of the strengths of this project is long track record of the team and wide network of well-known contributors especially in DeFi space. Universe.xyz was cofounded by Tyler Ward, Tim Kang, Troy Murray and Milad Mostavi. The team has a wide track record in the DeFi/NFT space as they also work on projects like BarnBridge and set of DAOs i.e. LeagueDAO, EnterDAO, FiatDAO and PleaserDAO.
Among the strong contributors base can be found names such as Kain Warwick of SNX and his brother Kieran of Illuvium, Stani Kulechov from Aave and Robert Leshner of Compound Finance, Aaron McDonald of Centrality, Artia Moghbel of Dfinity and Anton Bukov of 1INCH.
Fees & selected features
Universe is very creator-focused as it has very fee-friendly policy and has first rolled out minting functionality. There is no transaction fee on primary sales & according to whitepaper 1% on secondary sales. The transaction fee would in that case be notably lower than the 2% at Magic Eden or LooksRare, or 2.5% at OpenSea.
One of strong upsides of Universe for creators is the possibility to mint their NFTs or NFT collection without the need for smart contract developer. This can be a great pain reliever for creators. Another upside already mentioned is the possibility to mint a project on a smart contract that you already own. Universe is also planning a functionality to run auctions in an auction house with 0% fees. This could be an interesting tool for creators that want to test the market with their NFTs.
Seed round last year
Universe.xyz closed $4.3M seed round with $21M valuation in May 2021. Unlike in other seed rounds opportunity to participate was given to various leaders of funds, DeFi & NFT protocols that believed to provide value.
Rocky road ahead
Since NFT space is an attention market, one of the obstacles I see for Universe is that they have a lack of it. With a small community and lack of involvement of NFT OGs with large tribes behind them or vampire attack on OpenSea with airdrop and activity incentives it may be very hard to attract meaningful user base.
There have been discussions on DAO level related to airdrop & user incentives, but to my knowledge the team does not plan an airdrop to OpenSea users. I understand that since the $XYZ ecosystem exists for a while now, airdrop would strongly dilute the value for holders. Also since the team is fully doxxed, due to US security laws Universe will most likely not be implementing the web3 user incentives (e.g. tokens for activity) we see on LooksRare marketplace. The team argues that this is because it is simply too easy to exploit and All the transaction fees will go to the xyzDAO treasury, therefore there is no incentive in place for the users that are not $XYZ holders at the same time.
It is also surprising to me that the team did not roll out any visible marketing initiatives prior to marketplace launch. Strategies like waitlists based on referrals could potentially bring a lot of traction like we see with Coinbase NFT or Limewire. Based on the last AMA I did not get a feeling that there is strong marketing team dedicated to strategy & communication. This corresponds to the picture of small community following the project and absolute lack of coverage of Universe on the internet.
I can imagine that Universe would attract mainly creators due to the easy minting, however it is not clear to me how the marketplace wants to differentiate from other alternatives focused at artists such as Manifold. The team also intends to power marketplaces of other projects that are built on the top of Universe protocol. If implemented, this could help with the user acquisition.
Wrap-up
Universe ticks all the boxes on the technical side of the project. There is a strong team with all-start contributors network that demonstrated good progress over time. I also think that building a complete independent ecosystem for NFTs (similar to Magic Eden) not just an isolated marketplace could prove to be very competitive in the long run. Universe also follows the ideals of decentralization from smart contracts to data that will be strongly appreciated by the web3 community as well as functioning in a full-scale DAO.
Where I see potential downsides is lack of attention and marketing especially this early into the launch and absence of web3 incentives towards users. Since discoverability is almost an inherent issue in NFT space, the technical execution is not the only success factor. It will be interesting to watch the NFT marketplace launch next week and what the team has planned to attract both NFT creators and collectors.
🔗 Want to dig deeper?
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