Uniswap entered the NFT trading market OpenSea to fight head-on

On July 7, Uniswap Labs asked users for opinions on NFT product functions on social media, which heralded that Uniswap's NFT trading business entered the countdown to launch.

As the builder of Uniswap, Uniswap Labs acquired the NFT aggregation platform Genie in June, which is regarded as a signal of its entry into the NFT trading market. According to official information, starting this fall, users will be able to buy and sell NFT on the Uniswap application, and this top decentralized exchange for encrypted assets will also develop into a comprehensive platform.

Although the Uniswap NFT trading product has not yet been launched, from the perspective of Genie's genes, it is likely to continue to improve the NFT trading experience with liquidity as the core. Before being recruited by Uniswap Labs, Genie had opened up the NFT trading functions of OpenSea, Rarible, Coinbase and other markets, and realized cross-platform real-time batch trading of NFT with the help of liquidity protocols such as NFTX and NFT20.

The entry of Uniswap has aroused the vigilance of OpenSea. In April of this year, the world's largest NFT trading platform acquired Genie's main competitor, Gem, and entered the aggregation trading track. In June, OpenSea released Seapor, a decentralized NFT trading protocol, which supports users to freely build markets and flexibly combine assets for NFT exchange.

The birth of Seapor is more like an active attack by OpenSea in response to Uniswap's invasion of territory. Against the background of the innovation of NFT trading products, the offensive and defensive battle between NFT trading platforms has officially started.

Uniswap NFT trading function enters the countdown to launch

"What NFT functions do you want to see Uniswap build?" On July 7, when Uniswap Labs sent this question on the official Twitter, people realized that Uniswap's NFT trading business will come soon.

Uniswap has already sent a signal to enter the NFT market.

In late June, Uniswap Labs announced the acquisition of Genie, an NFT aggregation platform. Although the team claimed that the acquisition had no impact on the Uniswap protocol, governance, or UNI tokens, this did not prevent people from raising expectations for Uniswap. A few days after the news of the acquisition was announced, UNI quickly rose from $3.5. As of July 10, UNI was quoted at $6.23, a half-month increase of 78%.

According to the information released by Uniswap Labs at the time, starting this fall, users will be able to buy and sell NFT directly on the Uniswap application. Additionally, the program will also integrate NFTs into its developer API and widgets, making Uniswap a comprehensive platform for Web3 users and builders.

Supporting NFT transactions is not difficult for Uniswap, which acquired Genie. However, the current NFT trading market already has OpenSea as the benchmark, and many imitators such as LooksRare and X2Y2 have been born. The outside world is curious about what kind of NFT trading experience Uniswap, which has always been ingenious in product development, can bring.

To explore this point, we must find the answer from the genes of Uniswap and Genie.

Unsiwap is the originator of the AMM (Automatic Market Maker) trading mechanism, which supports all users in the market to add liquidity to trading pairs of encrypted assets to achieve instant transactions with low slippage. And Genie can be regarded as the "1inch" in the NFT trading market. The platform focuses on NFT bulk sales and purchase functions. Users can purchase up to 60 NFTs from multiple markets in a single transaction, thereby reducing the user's need for high-frequency transactions. Friction costs such as Gas fees generated.

Before being recruited by Uniswap Labs, Genie had opened up multiple NFT trading markets such as OpenSea, Rarible, and Coinbase, and released the NFT listing function Genie List, allowing users to place orders in multiple NFT markets to sell multiple NFTs with one click. Its transaction page is similar to Uniswap: the homepage provides Genie Sweep function, the overall interface is very simple, the payment box is on the left, and the receiving box is on the right. After the user enters the amount of ETH to pay, the system will automatically match the NFT that can be purchased in batches .

Genie official website page

It should be known that NFT has the particularity of non-homogeneity, and its liquidity cannot be compared with that of ERC-20 homogenization Token. In general, users can buy NFTs in batches, but it is difficult to sell NFTs in batches. Genie’s realization of this mainly relies on NFT’s liquidity protocols NFTX and NFT20. These protocols are somewhat similar to Uniswap’s liquidity pools, and they have access to several blue-chip NFT series such as CryptoPunks, CryptoKitties, Axie Infinity, and Avastars, which has improved to a certain extent. Liquidity in the NFT market.

Genetic fit is the main reason for Uniswap’s acquisition of Genie. Both of them focus on liquidity aggregation to achieve a lightweight trading experience. Therefore, Uniswap’s NFT business line has aroused the appetite of the outside world. What is certain is that it will bring product functions that are completely different from OpenSea.

When Unsiwap Labs solicited functional suggestions, many users expressed their expectation that Uniswap would launch “NFT AMM”. In people's opinion, for blue-chip projects with better liquidity, it is achievable to build NFT liquidity pools one by one. Some people also raised expectations that Uniswap can realize NFT cross-chain transactions through cross-chain bridges. For example, users can directly exchange NFTs in the Ethereum network with NFTs on the Solana chain. If this function is implemented, it is equivalent to opening up the NFT market on each chain, which will bring a more convenient trading experience.

The NFT trading platform launched a product offensive and defensive battle

For NFT trading platforms, the "invasion" of Uniswap is likely to change the current market structure. After all, before the birth of Uniswap, people would not have imagined that a decentralized application without an order book could rival well-established centralized platforms such as Binance and Coinbase in terms of transaction depth, but Uniswap did it.

Looking at the current NFT trading market, platforms with order book models such as OpenSea, LooksRare, and X2Y2 are at the forefront of the trading volume rankings. From the perspective of products, there is no essential difference between these platforms. Usually, sellers sell NFT through pending orders, and buyers check market orders and make selective purchases. And OpenSea can become a recognized leader among these platforms, and the traffic moat built due to its early entry is an important reason.

Current NFT trading platform trading volume leaderboard

Until the arrival of Uniswap, the war on NFT platform 1.0 may come to an end. Uniswap, which has always conquered users with its "small and beautiful" product features, will launch an impact on OpenSea from the bottom of the product.

On July 5, Scott, the founder of Genie and the current head of Uniswap NFT products, tweeted that according to the roadmap, the first step is to start the "core foundation" of Uniswap NFT.

He didn't explain too much what the "core foundation" is, but he emphasized that the market should build a customized experience instead of copying and pasting application components. It only makes sense for a small number of NFT collections to have their own market. This remark is imaginative, and some people speculate that Uniswap may establish a customized trading market for some blue-chip NFT projects with a large user base.

On July 9, Scott revealed more details. He said that the Uniswap NFT transaction list will use real-time streaming, and this feature will have three months of architecture, construction and actual combat testing. "Real-time streaming" means that whenever a new NFT is put on the shelves, users can see it for the first time without having to filter the collection to retrieve it.

Although the current Uniswap NFT trading platform is still "holding the pipa half-hidden", the offensive and defensive battle between the trading platforms has already begun, and the challenged party did not adopt the strategy of "waiting for changes" and began to take the initiative.

In April this year, OpenSea also completed an acquisition, which was Genie’s main competitor, Gem. Gem is also a decentralized aggregator of the NFT market, and its transaction volume and number of users are even higher than Genie, which was born earlier. According to OpenSea, the acquisition is "an investment in the future of the professional community". However, the outside world generally believes that this acquisition is a defensive acquisition of OpenSea to prevent the aggregator NFT platform from cutting its own cake.

As of now, Gem is still operating independently of OpenSea, and the two have not produced a combination at the product level. However, after Uniswap's high-profile entry into the NFT field, OpenSea quickly launched another product-Seaport Protocol.

If the acquisition of Gem is OpenSea's defensive strategy, the launch of Seaport is its proactive attack. Compared with OpenSea, which has been criticized for being "centralized", Seapor is an open source decentralized protocol. Anyone can build an NFT market based on the Seaport protocol.

In terms of product functions, Seaport supports users to bundle different assets to trade NFT. For example, when a user owns a Doodle NFT worth 40 ETH and wants to trade a BAYC NFT worth 100 ETH, he can use a combination of a Doodle NFT and 60 ETH to buy the BAYC NFT. This flexible combination exchange method can greatly improve the transaction efficiency of NFT assets.

Seaport also provides the SudoSwap tool to facilitate users to trade NFTs by "bartering". In addition, the protocol allows the creation of Dutch auctions for NFTs. Users can set a start and end price, auction duration, and then proceed with the auction in accordance with the mechanism of lowering or increasing the price until a buyer is found or the auction is completed after the deadline. The Dutch auction mechanism facilitates price discovery for NFTs.

Some users believe that Seaport launched by OpenSea is like Uniswap in the field of benchmarking encrypted asset trading, which may fundamentally change the way NFT is bought, sold and traded.

Before the Uniswap NFT business went live, a series of actions by OpenSea had shown the gunpowder of war. The scrambling innovation of NFT trading products is bringing more room for imagination to the NFT market structure, and the biggest advantage is that users' NFT trading experience will be improved in the competition between platforms.