What Is the Future of NFT Marketplaces?

March 1, 2022

by Li Jin

Originally published on Twitter on March 1, 2022

What does the future hold for NFT marketplaces?

Today, we are in the “eBay era,” with the largest NFT marketplaces aggregating everything into grids of products, focused on transactions.

But in the future, the best NFT marketplaces may not even look like marketplaces at all.

Consider the progression of marketplaces on the internet: historically, the 1st generation of marketplaces added a ton of value just by aggregating any and all supply and demand. Think Craigslist, eBay, etc.

The onus is on users to vet and find what they want to buy.

For NFTs, we are still in the 1.0 era of marketplaces, where users have to figure out what they want to buy, go to a marketplace, type the product into a search bar, and then transact.

Over the years, marketplaces evolved to deliver more seamless experiences, and the same will happen to NFTs.

Vertical-specific features and signals will help users find the right product, and marketplaces can even learn from users’ behavior to determine what to surface.

Sometimes, these platforms can be wrapped into a compelling user experience so they don’t even feel like marketplaces at all.

For example: Instagram, AirBnB, Etsy, Pinduoduo (social shopping app in China with a $256b GMV).

Discovery and transaction exist in one experience.

As the range of products expands and NFTs eat all of digital media — from digital fashion to metaverse land to game assets — there becomes a need for verticalized experiences, better discovery, and marketplaces that connect the dots for users.

Instead of users sifting through everything available, future NFT marketplaces will inspire and guide users to buy, even learning from their past on- and off-chain activity to ascertain what to surface.

What are some projects to watch that represent the future of how NFTs are discovered and collected? Here are a few:

Each of these are building new social experiences, various models for curation, and features that are vertical-specific.

Check out this article I wrote a few years ago about the progression of various marketplace models.

Who else is pushing the boundaries of what NFT marketplaces can look like, and should be added to this list? If you’re building in this space, I’d love to talk! My DMs are always open.

Originally published on Twitter on March 1, 2022

Disclaimer
All information contained herein is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. None of the opinions or positions provided herein are intended to be treated as legal advice or to create an attorney-client relationship. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by Variant. While taken from sources believed to be reliable, Variant has not independently verified such information. Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by Variant, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Variant (excluding investments for which the issuer has not provided permission for Variant to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://variant.fund/portfolio. Variant makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This post reflects the current opinions of the authors and is not made on behalf of Variant or its Clients and does not necessarily reflect the opinions of Variant, its General Partners, its affiliates, advisors or individuals associated with Variant. The opinions reflected herein are subject to change without being updated. All liability with respect to actions taken or not taken based on the contents of the information contained herein are hereby expressly disclaimed. The content of this post is provided "as is;" no representations are made that the content is error-free.