Magic Eden is the largest NFT marketplace in the Solana ecosystem, and it just got a war chest of capital that made it a crypto unicorn.
We now know how the company is putting some of its money to work: it has set up an investment arm that focuses on games.
The most recent funding for Magic Eden, a $27 million Series A round that was announced in March, will be coming in just three months. Magic Eden’s CEO and co-founder, Jack Lu, told Decrypt that the company didn’t want to ask for money so soon, but that its growing market share and NFT gaming footprint forced him to build up a war chest.
He said, “We didn’t want to feel like we were short on resources, and we wanted to grow over the next five to ten years.”
Adding more blocks to other blockchains
Fractal, a Solana NFT gaming platform from Twitch co-founder Justin Kan, is Magic Eden’s main competitor in the gaming market. But Magic Eden also plans to support NFTs on other blockchain platforms.
COO and co-founder Zhouxun Yin said, “It’s clear that we live in and will continue to live in a world with many chains.” He said that certain types of NFTs, like games, art, and music, are gathering on certain blockchain platforms, and Magic Eden plans to serve them. He didn’t say which blockchains the marketplace plans to use, though.
An NFT serves as proof of ownership and is often used for digital products like artwork, profile photos, collectibles, and video game items. Solana is now the second most popular platform for trading NFTs, after Ethereum.
In the past few weeks, the Solana ecosystem has shown a lot of signs of growth. For example, a Solana NFT project has outperformed all Ethereum projects in terms of daily trading volume, and on one day, the total trading volume of all Solana NFT projects beat Ethereum.
Lu talked about the growing number of ways that NFTs can be used on Solana, as well as the growing number of Ethereum NFT traders who are trying out the Solana market. He also said that Solana’s “meta” for NFT trading changes often, with new trends popping up every few weeks to keep NFT collectors interested and buying.
Magic Eden says that it has at least 90% of the secondary market for Solana NFTs. Even though there was a lot of buzz about OpenSea adding support for Solana in April, it doesn’t seem to have had much of an effect. On the other hand, the co-founders of Magic Eden think it was good for the platform.
Yin said that they had seen the Solana and Ethereum profile photo collections “converge as a business,” which he said was something they had been expecting for a long time. He said that the fact that OpenSea and Rarible both added Solana NFTs at the same time helped the NFT community trust the space.
Even though the larger NFT market has been down in recent weeks because of the crypto market crisis and Solana (SOL) has lost almost 60% of its USD value since the beginning of May, Lu said that Magic Eden has seen more SOL transactions in recent weeks.
Magic Eden wants to expand to more blockchain platforms, and the co-founders think the marketplace has a real chance of beating OpenSea, which Yin called “more centralized and corporate” compared to Magic Eden’s more community-focused, DAO-assisted approach.
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