Today, Magic Eden made an important announcement on "Chapter II" initiative for the Solana-based NFT trading platform. The new "Chapter" introduces major changes to Magic Eden which aim to fix most of the issues that were previously highlighted by the marketplace’s users and competitors, and improve the user experience.
"Today marks the beginning of a new chapter for Magic Eden and the broader NFT ecosystem. More is coming, just let us cook. Also, diamonds are made under pressure...including ours," Magic Eden tweeted in the thread.
In the past, the platform received many negative comments due to its limited compatibility with other NFT marketplaces as well as closed-source code. Now Magic Eden is starting to aggregate offers from competing marketplaces, turning into an ultimate trading solution with access to listings and prices across the entire Solana NFT market. The removal of the "co-sign" feature has already been appreciated by the NFT trader community and even the developers of Magic Eden’s main competitor, the fast-growing NFT marketplace Tensor, which raised $3 million in a seed round earlier this year.
One of the platform’s creators with the Twitter nickname Richard Tensor, commented on co-signing in late April, "Imagine if Uniswap, GMX or OpenBook required co-signing. You would HAVE to go through their centralized APIs to trade. If the servers went down, your trades and capital would be frozen in time. We do not need this in the NFT space. Say NO to co-signing." Richard Tensor also explained, "There are some valid cases where co-signing makes sense. For example, if things cannot be as easily done on-chain ( trait bids ). BUT: buying an NFT should not require this. Listing should not require this. Delisting definitely not (imagine not being able to withdraw your funds!)."
Now the developer tweeted "Credit where credit is due. Mad props to MagicEden for removing co-signing on their buys!"
It is worth noting that the team behind Tensor has a very respectful attitude toward Solana.
"I think a lot of people on Twitter like to dramatize things. They want to see a battle of marketplaces. There’s healthy competition between us [and Magic Eden], but the point we want to drive home is we are not here to win 80% of a non-existent market," Ilja Moisejevs, a Tensor's co-founder, told TechCrunch in early May, adding, "We want us to win, Solana to win, and we will be a bigger business if Solana as a chain does well."
While another move by Magic Eden to make its code open-source was also welcomed, probably one of the most exciting news is the time-limited MAKE FEE campaign. Magic Eden has set its fees at -0.25%, meaning creators can earn 0.25% of the listing value, whereas collectors will receive 0.25% of the accepted offer. In addition, every buy and sale for a double-sided AMM Pool will also earn marketplace users 0.25%.
The only fact that still needs to be clarified is the use of an escrow contract which was one of Magic Eden's biggest drawbacks cited by its competitors as a potential security risk.
How is it going with the NFT market?
It seems that Magic Eden’s Ordinals marketplace is currently performing much better than its original NFT marketplace. According to NFT on-chain analyst Domo's statistics, Magic Eden has a fairly strong position on the Ordinals marketplace at press time, with a total trading volume of $760484.4. The only Ordinals marketplace currently outperforming Magic Eden is Unisat with a total trading volume of approximately $859378.6 noted yesterday. However, between May 17 and May 22, Magic Eden’s Ordinals marketplace was the absolute industry leader.
At the same time, the Dune charts based on SeaLaunch's on-chain data represented current market leaders such as Blur with a trading volume of 9,889 ETH reported yesterday, OpenSea (about 2,856 ETH), OpenSEa Pro (572 ETH) and LooksRare (35 ETH). Magic Eden was not specifically listed by SeaLaunch and it is unclear whether the analyst categorized Magic Eden's trade statistics as "Other" which would imply rather low numbers compared to the leading NFT platforms. Most likely, the data was only collected for Ethereum-based marketplaces and did not include Magic Eden powered by a different blockchain.
Meanwhile, analyst Rexzh0u reported that Magic Eden’s latest 24-hour trading volume was only 26,994 SOL worth about $7340.
SeaLaunch sees the main reason for the waning interest in Ethereum-based marketplaces as the result of the "abnormally high gas costs," but asset rotation caused by tax payments and the boom in memecoins were also cited as factors affecting the Ethereum NFT market.
"Interestingly, all types of users (from heavy traders to "normal" NFT traders) are decreasing activity at the same pace," SeaLaunch said in the Twitter thread, adding, "Our thesis is that since there is a general decay in NFT users, it is most likely due to a macro scenario (such as high gas prices, tax payment liquidity issues) than a change in the pattern of trading (such as, for example, reduction of airdrop farming trading )."