Coinbase, one of the top three crypto exchanges in the world, dipped its toes into the NFT market last year. They launched a new Web3 social marketplace for NFTs. But how good is it? And should you use it?
In this two-part article series, we’ll completely examine the Coinbase NFT marketplace.
What Is the Coinbase NFT Marketplace?
Coinbase entered the NFT space last year in competition with OpenSea, which emerged in 2021 as the biggest NFT marketplace. The company is a publicly traded cryptocurrency exchange platform with over 108 million verified users, $101 billion in Bitcoin holdings, and $159 billion in quarterly volume traded.
The industry giant announced the launch of a peer-to-peer marketplace for minting, buying, and discovering non-fungible tokens in October 2021, along with an invitation to join a waitlist that grew up to 2.5 million people.
These assets, also referred to as NFTs, reflect ownership of creative works in digital form, including images, music, designs, trading cards and other items, etc.
The NFT grants its holder a distinct digital representation. It does not hold exclusive rights to a work’s digital or physical reproduction, and the original creator or company retains ownership of the copyright and reproduction rights.
Creators can sell NFT tokens of their works, and important NFTs have commanded very high prices. For instance, the NFT of the first tweet of Jack Dorsey, the inventor of Twitter, sold in 2021 for about $2.9 million.
Coinbase Enriches the NFT Market With a New Social Media Element
The company has designed the marketplace focusing more on social engagement. And rightly so, because community and social engagement have been the backbone of many popular NFT collections.
The NFT platform includes individual profiles, personal feeds, and a display for all NFTs made by the user in mimic of Meta or Twitter.
Although the NFT market is not booming as before, NFTs could provide the company with a significant new revenue stream once the mass adoption surges. The value of the company’s shares has lagged behind the increase in the price of virtual currencies like Bitcoin and Ethereum since Coinbase’s IPO in April 2021.
Coinbase positioned itself as the “Web3 social marketplace for NFTs” when it first launched its NFT marketplace to stand out from its rivals. Unfortunately, though, they were late.
By the time the marketplace was ready, the NFT bubble had already burst. The trading volume was declining. The endeavor could have seen more success if they had launched a few months earlier. But it is always better late than sorry!
Dune Analytics data shows that since its April 20 debut, Coinbase NFT volume has roughly generated sales of $8 million from just 17K users. Comparatively, OpenSea, the world’s largest NFT marketplace, has seen nearly $9 billion in NFT volume across roughly 148K users. OpenSea’s volume was almost 100,000% higher when compared to Coinbase NFTs.
Ethereum serves as the currency on the Coinbase NFT exchange. And the marketplace supports any self-custody wallets that are NFT-compatible.
WalletConnect, MetaMask, and Coinbase Wallet are the three visible on the Coinbase NFT website. Using Coinbase Wallet is ideal here as it is the native wallet of the Coinbase ecosystem.
The Coinbase Wallet is separate from the main Coinbase app and is available in the Apple App Store or Google Play. If you’d prefer to explore NFTs on a computer, you may also download a Chrome extension to link Coinbase Wallet to a web browser.
NFT Coinbase Wallet
Coinbase won’t charge fees to buy and sell NFTs for an undisclosed period. But they still charge an Ethereum gas fee for logging a transaction on the network. And importantly, using the Coinbase Wallet does not require a Coinbase account. That means you don’t need to do KYC.
The wallet is the best option for trading NFTs on Coinbase because of its strict security measures, history of no hacks, simplicity of usage, and generally good reputation. But remember, since the Coinbase wallet is a hot wallet, it is always better to transfer your assets to a cold wallet for long-term storage.
Will Coinbase NFT Support Solana?
Interest in Web3 and decentralized applications, such as NFTs and decentralized finance, has exploded during the past year. Many users have been searching for scalable networks that provide fast transaction speeds and low-cost transactions.
Solana is one of the blockchain networks that has experienced a rise in usage and has amassed a thriving community of users and developers. On March 17, 2022, the Coinbase Wallet enabled compatibility for the Solana blockchain in its Coinbase Wallet browser extension, initiating its support for the Solana ecosystem. Although the Coinbase Wallet now supports SOL and SPL tokens, users cannot directly manage Solana NFTs from the wallet.
The Coinbase NFT marketplace only supports the Ethereum network currently. So you still have to rely on Ethereum to trade NFTs on the platform. However, we can expect future integration with Solana and other blockchains. For Coinbase NFT to remain competitive, it is imperative to take this action.
How to Buy NFTs on Coinbase
Buying an NFT from Coinbase is incredibly simple, thanks to its familiar UI and easy-to-navigate interface. Follow the steps to purchase an NFT from the platform.
- Set up an NFT-compatible digital wallet – You need an ETH-compatible crypto wallet to purchase NFTs on the market. Coinbase supports MetaMask and other ETH wallets. Another option is to use the native Coinbase Wallet.
- Fill the wallet with ETH – You must purchase or deposit ETH into your wallet to use Coinbase’s marketplace. You can buy ETH on many exchanges, including the one operated by Coinbase, Binance, and Crypto.com.
- Connect the wallet to the platform – Connect your wallet to the NFT marketplace using the sign-in icon on the top right.
- Search the listings – Browse the NFT listings while having your wallet ready. Select the NFT you like if you find it.
- Buy the NFT – Prices range from virtually nothing to several thousand dollars or more for a rare item. While some products are sold through auctions, others can be bought right away by clicking a “Buy now” button.
Once you sign the transaction and pay the fees, the NFT will get transferred to your wallet. Even if the NFT is free or inexpensive, there will be expenses involved in executing the transaction. All digital collectibles on Coinbase NFT use the Ethereum blockchain, and the network levies a “gas” tax for transactions like NFT sales. The proportion of network traffic determines how much gas costs fluctuate.
While the Coinbase NFT was late, it was nevertheless inevitable. In this article, we covered what the Coinbase NFT platform is and how to purchase NFTs on them. Here is the second part for a more in-depth review.
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