US biggest crypto exchange, Coinbase, has announced its plans to delve into the world of NFTs before the end of the year.
Sanchan Saxena, the Product Vice President of Coinbase, made the disclosure on Tuesday, stating that the company is looking to “help millions of people” access NFTs much the same way it did in the early stages of Bitcoin.
The first NASDAQ-listed crypto exchange company will be looking to rake in a ton of share gains from a currently-vibrant NFT market split among a long list of established NFT exchanges like OpenSea, Nifty Gateway, Rarible, BSC NFT, Crypto.com NFT, and FTX.
OpenSea currently tops the NFT trading leaderboard with a record of approximately $7.7 billion in transactions over the past 11 weeks and has become the preferred choice for many artists owing to its multi-channel feature which does not limit users to Ethereum’s costly transaction fees.
While many crypto pundits predict a massive disruption to the NFT marketplace with the arrival of Coinbase, the company knows all too well how uneasy lies the task ahead, as it would have to compete favorably in three major areas.
While OpenSea charges a 2.5% transaction fee, Coinbase can easily become the people’s favorite with lower fees.
Though no disclosure has been made about its potential charge rate, Coinbase may seek to target price-sensitive collectors and artists to its platform.
To do this effectively and ensure retention, it would equally need to maintain or improve upon the user experience currently present in OpenSea.
Multiple chain support
Most artists minting their NFTs through the Ethereum ERC-721 only take solace in the advantage of a massive market while shelling out between $70 to $150 in transaction costs.
Others who find such costs prohibitive are looking out for cheaper and less popular alternatives in cryptocurrencies like Solana and Cardano.
Offering a broad variety of chain networks to choose from, will help boost NFT minting market competition, and redistribute user traffic thereby generating more customers for Coinbase.
Following recent reports of theft, fake art sales, impersonation, IP theft, and insider trading at OpenSea, Coinbase would also do better to put in place measures to prevent access and utilization of private and sensitive information to make a profit as users tend to find this a big turn off.
Coinbase can learn from the challenges faced by OpenSea to create a water-tight secure NFT exchange platform.