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Breakdown of Leading NFT Platforms

Black Mountain Breakdown of Leading NFT Platforms

Written by Kyle Niedzwiecki

Co-founder & CTO of Black Mountain Investment Group and Portfolio Manager & CEO of The Jupiter Fund.

October 16, 2021

Non-fungible Tokens (NFTs)

A non-fungible token is a unit of data stored on a digital ledger, called a blockchain, that certifies a digital asset to be unique and therefore not interchangeable. NFTs can be used to represent items such as photos, videos, audio, and other types of digital files. While copies of these digital items are available for anyone to obtain, NFTs are tracked on blockchains to provide the owner with a proof of ownership that is separate from copyright.

The NFT market value tripled in 2020, reaching more than $250 million. During the first quarter of 2021, NFT sales exceeded $2 billion and seem to keep growing with no slow down in sight. Instead of handpicking and analyzing each and every NFT, i’m going to break down the leading NFT platforms which are (in no particular order): Axie Infinity, Decentraland, Enjin Coin, MyNeighborAlice, The Sandbox, OpenSea, and Rarible. 

 

Axie Infinity (AXS)

Price: $125.56

Market Cap: $7,607,58,693

Fully Diluted Market Cap: $33,767,368,386

Circulating Supply: 60,907,500.00 AXS

Max Supply: 270,000,000 

Total Supply: 270,000,000

Annualized Revenue: $3.72b

P/S Ratio: 4.91x

Axie Infinity (AXS) Revenue Share over a 365-day period ranging from September 9th, 2020 to September 9th, 2021.

Axie Infinity is a blockchain-based trading and battling game that is partially owned and operated by its players. Inspired by popular games like Pokemon and Tamagotchi, Axie Infinity allows players to collect, breed, raise, battle and trade token-based creatures known as Axies.

These Axies can take various forms, and there are more than 500 different body parts available, including aquatic, beast, bird, bug, plant and reptile parts. Parts from each type class come in four different rarity scales: common, rare, ultra-rare and legendary — and Axies can have any combination of body parts, making them highly variable and often rare and unique.

Each Axie is a non-fungible token (NFT) with different attributes and strengths and can be entered into 3v3 battles, with the winning team earning more experience (exp) points that are used to level up an Axie’s stats or evolve their body parts. These Axies can be bred together to produce new and unique offspring, which can be used or sold on the Axie marketplace.

The Axie Infinity ecosystem also has its own unique governance token, known as Axie Infinity Shards (AXS). These are used to participate in key governance votes and will give holders a say in how funds in the Axie Community Treasury are spent.

Decentraland (MANA)

Price: $0.80

Market Cap: $1,440,452,508

Fully Diluted Market Cap: $1,760,350,148 

Circulating Supply: 1,795,369,043 MANA

Max Supply: — 

Total Supply: 2,194,087,027

Decentraland (MANA) defines itself as a virtual reality platform powered by the Ethereum blockchain that allows users to create, experience, and monetize content and applications. In this virtual world, users purchase plots of land that they can later navigate, build upon and monetize.

Decentraland was launched following a $24 million initial coin offering (ICO) that was conducted in 2017. The virtual world launched its closed beta in 2019 and opened to the public in February 2020. Since then, users have created a wide range of experiences on their parcels of LAND, including interactive games, sprawling 3D scenes and a variety of other interactive experiences.

Decentraland uses two tokens: MANA and LAND. MANA is an ERC-20 token that must be burned to acquire non-fungible ERC-721 LAND tokens. MANA tokens can also be used to pay for a range of avatars, wearables, names, and more on the Decentraland marketplace.

In total, the Decentraland gameworld – termed the “Metaverse” – is divided into 90,601 individual parcels of LAND, each of which is represented by an ERC-721 non-fungible token. Each LAND is exactly 16m x 16m (256 square meters) and can be found at a particular coordinate in the Metaverse.

Decentraland is also one of the growing number of projects to use a decentralized autonomous organization (DAO) structure for governance decisions. As a result, MANA token holders are in control of how the Decentraland world behaves, by proposing and voting on policy updates, the specifics of upcoming LAND auctions and the types of content that are allowed with the Metaverse.

Besides being a creative outlet, many Decentraland users currently monetize their LAND through leasing, advertising, and paid experiences. Likewise, other users generate an income by creating and selling items on the Decentraland marketplace for MANA tokens.

 

Enjin Coin (ENJ)

Price: $1.66 

Market Cap: $1,383,551,437

Fully Diluted Market Cap: $1,658,276,194

Circulating Supply: 834,331,121.40 ENJ

Max Supply: 1,000,000,000

Total Supply: 1,000,000,000

Enjin Coin is a project of Enjin, a ompany that provides an ecosystem of interconnected, blockchain-based gaming products. Enjin’s flagship offering is the Enjin Network, a social gaming platform through which users can create websites and clans, chat, and host virtual item stores.

Enjin allows game developers to tokenize in-game items on the Ethereum blockchain. It uses Enjin Coin, an ERC-20 token, to back the digital assets issued using its platform, meaning that items can be bought, sold and traded with real-world value.

Enjin Coin (ENJ) is a digital store of value used to back the value of blockchain assets like non-fungible tokens (NFTs). Every asset minted with the Enjin Platform contains ENJ, a minting resource which is locked inside NFTs and removed from circulation. 

The Enjin blockchain ecosystem aims to offer software products that make it easy for everyone to develop, trade, monetize, and market with blockchain. It allos game developers and businesses of all sizes to use tokenized digital assets as part of their acquisition, retention, engagement, and monetization strategies. The Enjin ecosystem is fueled by Enjin Coin (ENJ), a cryptocurrency used to back the value of blockchain assets.

MyNeighborAlice (ALICE)

Price: $12.53 

Market Cap: $288,272,104

Fully Diluted Market Cap: $1,253,356,973

Circulating Supply: 23,000,000.00 ALICE

Max Supply: 100,000,000 

Total Supply: 100,000,000

MyNeighborAlice is a multiplayer builder game, where anyone can buy and own virtual islands, collect and build exciting items and meet new friends. Inspired by successful games such as Animal Crossing, the game combines the best of the two worlds – a fun narrative for regular players who want to enjoy the gameplay experience as well as an ecosystem for players who want to collect and trade Non-Fungible Tokens (NFTs).

ALICE is MyNeighborAlice’s native utility token and is used in the following functions:

In-game Currency: Purchase assets and special skill sets in the game and in Alice’s marketplace.

Governance: Participate in the governance process through a Decentralized Autonomous Organization (DAO), with proposals and voting structures (e.g. platform operations and development). 

Staking: Stake ALICE tokens to earn a percentage of platform revenues (e.g. plot sales, asset sales, and transaction fees).

Player Incentives: By completing quests in the game, players can earn ALICE tokens. This design is to encourage user participation in the game and to maintain traction.

The Sandbox (SAND)

Price: $0.7985

Market Cap: $706,981,540

Fully Diluted Market Cap: $2,395,356,852

Circulating Supply: 885,439,937.22 SAND

Max Supply: 3,000,000,000 

Total Supply: 3,000,000,000 

Launched in 2011 by Pixowl, The Sandbox is a blockchain-based virtual world allowing users to create, build, buy and sell digital assets in the form of a game. By combining the powers of decentralized autonomous organizations (DAOs) and non-fungible tokens (NFTs), the Sandbox creates a decentralized platform for a thriving gaming community.

The Sandbox is a unique platform because it introduces blockchain technology to the world of gaming. By creating a universe where gamers can create and collect blockchain-based assets, the Sandbox aims to revolutionize the market. It makes a niche for itself in the global market of gaming. By focusing on user-generated content, the Sandbox creates a metaverse of involved players who contribute to the platform’s further development. Not only that, by introducting the SAND token, the Sandbox promotes decentralized governance and allows users to share their views and ideas about the development of the project. Thanks to the evolving technology, decentralized governance is becoming a must-have in blockchain-based projects.

OpenSea

Price: 

Market Cap: 

Annualized Revenue: $3.46b

Circulating Supply:

Max Supply: —

Total Supply: —

OpenSea Revenue Share over a 365-day period ranging from September 9th, 2020 to September 9th, 2021.

OpenSea is a decentralized peer-to-peer marketplace for buying, selling, and trading rare digital goods, from gaming items to collectibles to art, which are built on non-fungible token (NFT) technology and run on the Ethereum blockchain. In fact, OpenSea brands itself as the largest marketplace for digital goods as it has a broad range of available items in over 200 categories and claims to have the best prices for new items.

OpenSea allows the trading of digital art, decentralized domain names, trading cards, digital collectibles, virtual worlds, sportds cards, and much more. Just like Uniswap is the go-to ERC-20 exchange, OpenSea is the go-to platform for some of the most popular NFT projects like Cryptopunks, Axie Infinity, Gods Unchained, CryptoKitties, SuperRare, etc. 

The marketplace enables trading through a smart contract while users store their items in their chosen wallet. Furthermore, users are allowed to list their items on OpenSea even if they are also listed in other marketplaces as long as they remain in their wallets.

OpenSea provides an open platform for users to trade while taking only 2.5% of the purchase price of every NFT sold, which the platform boasts as the lowest in the space. The revenue is split into two categories: Supply-side revenue and Protocol revenue. Supply-side revenue is essentially the royalities paid out to creators, while protocol revenue is the share of fees that go to the protocol.

Rarible (RARI)

Price: $22.02

Market Cap: $104,656,086

Fully Diluted Market Cap: $553,193,836

Circulating Supply: 4,752,373.38 RARI

Max Supply: —

Total Supply: 25,000,000

Rarible (RARI) Revenue Share over a 365-day period ranging from September 9th, 2020 to September 9th, 2021.

Rarible is a creator-centric NFT marketplace and issuance platform that utilizes the RARI token to empower users who actively interact with the protocol. Users on the Rarible platform can easily create non-fungible tokens (NFTs) for unique digital items like artworks, game items and more. The platform offers users a fully-featured marketplace that is filtered and sorted using different categories to create a smooth and easy user experience.

Anyone can create and post NFTs on the Rarible marketplace. The RARI token is a fundamental pillar of the platform as it is used to reward active users and for participating in the governance of the protocol. Rarible intends to become more than just a marketplace for digital collectibles and art through blockchain technology. The platform is used to create or “mint” NFTs with an extremely simple process that makes it accessible to those with little to no experience with NFTs.

This allows artists and creatives to create and sell their digital products with zero barriers to entry while still benefiting from the security enabled by blockchain technology. The Rarible platform and protocol is an autonomous ecosystem that is governed by RARI holders, who are tasked with voting on governance proposals. In time, Rarible intends to transition to a fully decentralized autonomous organization (DAO) strucutre.

Competitive Landscape

The top NFT (non-fungible token) Platforms sorted by Revenue, highest to lowest.

As we move into the future, we’re going to see more and more NFT Platforms emerge from the woodworks, just as we’re going to continue seeing new cryptocurrencies. The ones to emerge as the clear victors of the NFT sector will be the 1st movers as they have the network effect large enough to incentivize users to continue suing their platofrm. Out of all the platforms currently released, it seems like the main winner for the NFT platform is OpenSea.

OpenSea for NFT trading is the equivalent to the Uniswap for ERC-20 trading, and it doesn’t even have a governance token. At the moment, OpenSea has a higher revenue than Pancake & SushiSwap, the other two leading ERC-20 & BSC-20 exchanges. Out of all the NFT proejcts, its a bit difficult to speculate which ones will be champions in the long-term, as we’re not art speculators by profession. However, with all the research we’ve done, Axie Infinity aims to be the Pokemon of the Ethereum blockchain.

Currently, Axie Infinity is the highest grossing revenue NFT platform. Back in May, AXS was actually out-grossing Ethereum in terms of revenue. When the market picks back up full swing and Ethereum fixes their fees, we believe the hype for AXS will also follow suit and continue dominating the NFT space in both terms of revenue and users partaking in the decentralized game.

As always please do your own research, this information does not constitute as financial advice. 

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