Inside Magic Eden: is it worth the hype?
The NFT hype continues to grow with more platforms finding innovative ways to allow creators to participate. Magic Eden being one of the most user-friendly platforms on the market thus far.
It is a decentralized platform built on the Solana Cryptocurrency blockchain, which allows users to create and manage NFTs. CEO and Co-founder of Magic Eden, Jack Yu told Financial Fox that their decision on using Solana as their blockchain foundation was an intentional choice.
NFTs are still very new and often misunderstood. They are purchased through cryptocurrencies and with the price of competitor platforms such as Ethereum on OpenSea costing around $2000 for 1 Ethereum, this made it hard for beginners to enter the NFT marketplace and demotivated those to even try.
Which is why Magic Eden making the decision to build their platform through Solana which currently costs $50 per one, as a cost-effective way for consumer experimentation, especially now as Solana came out with “Solana Pay” earlier this year for consumers ease and directly pay for merchants.
Magic Eden has been able to create a large online community through their user-friendly features such as the create a portal feature. A self-servicing way for creators to put up their NFTs for sale and create an official product without the need to mint it before being sold like other platforms.
Magic Eden has also helped creators launch NFT collections with marketing tools to drive hyper for collections using a Launchpad feature.
These features have allowed Magic Eden users to create NFTs without the need for extensive technical knowledge or development experience. Jack Yu told Financial Fox that Magic Eden wants the creators and digital artists to have the comfort of focusing on the creativity of their work and that they should not have to worry about the difficulties of blockchains complexity.
This can explain the current success of Magic Eden, having up to 95% of the trading market share and over 40,000 active users. This is a drastic step as they have only launched last September.
But with every boom comes a bust. Cryptocurrency has seen a tremendous downfall in the past few weeks with coins seeing a dip in their prices due to uncertainty in the global economy. The risk with Cryptocurrency is that it can be very volatile and in return cause volatility in NFTs. The LUNA price fell by 96% in just 24 hours.
The gaming communities however have allowed cryptocurrency to stay more relevant and desirable even when there is a downfall.
In-game merchandise is a business model used by the gaming industry for over a decade. The use of NFTs is a natural and obvious way of introducing them to the mainstream market, said Yu. Especially as emerging markets and economies in the world are exploring the ways of earning money through playing games. Through trading game NFTs and game currencies, people have started to earn more money than they would in a traditional desk job.
Magic Eden is focusing on building their gaming NFT marketplace. It has launched Eden Games which allows for mini games created by third party creators who want to sell their NFT game assets. Magic Eden’s newest partnership with NFT strategy game, Dragon Wars, has launched 5000 NFTs in their play to earn project earlier this week.
Security however has been the biggest issue that faces cryptocurrency and NFTs. OpenSea tweeted that more than 80% of their free NFTs were either a scam or plagiarized from other artists. It makes it difficult for users to trust these platforms.
Magic Eden hopes that the use of the Solana blockchain foundation ensures better security as it is deemed to be a better version of Ethereum. In terms of ownership, Magic Eden is not a central arbiter of rights, said Yu. That they are a decentralized platform, and they leave it up to the sellers to decide what rights the buyers have on their art.
The future of Magic Eden or any platform is uncertain as it is an ever-changing marketplace, so it is hard to determine what is next, but it will definitely be interesting to watch.