NFTY #44: unbundling marketplaces

Using tokens to bootstrap financial & social capital in niche markets.

Marketplaces are undergoing a massive unbundling phase outside of blockchain. Over the past few years, we saw the introduction of shoe collectible marketplaces like GOAT and StockX and now we’re starting to see other collectible marketplaces emerge like Mage for Magic the Gathering cards.

This is occurring at a faster pace with blockchain markets. OpenSea is an aggregator of non-fungible tokens, but niche non-fungible token marketplaces like GUDecks exist for more concentrated liquidity. On the prediction market front, Veil is similar to OpenSea in being an aggregator for prediction markets, but niche prediction markets like Sports.X exist for more concentrated liquidity.

SportsX was released last week and follows the playbook from Asia by introducing a native-token based upon transaction volume on the protocol or dApp. Each time you bet, you pay a small fee in DAI and earn BetX tokens. The lower the transaction volume is, the more tokens you earn. Keep an eye on this cryptoeconomic model for bootstrapping incentives early.

BoxSwap, a niche trading platform, has also introduced a bootstrapping mechanic this week — NFTs as achievements. By interacting and using BoxSwap, you can earn NFTs that gives special access to:

  • access to premium content

  • early access to new features

  • social signaling within discord

dApps in the future might do a combination of both Sports.X & BoxSwap. Native tokens will be used to bootstrap financial incentives and draw in the heavy lifters while NFTs will come in at a growth stage for social capital once a community has been built.

With more niche marketplaces arising from more passionate communities like Mage, the unbundling of marketplaces may happen faster if these marketplaces use tokens for early financial incentives while later introducing programmable NFTs to build communities. I expect this to happen as ERC1155 picks up more popularity and developers start to mint fungible & non-fungible tokens in the same contract.

The NFTY News tracks the ever-evolving narrative of how dApps will gain mainstream adoption through crypto-native experiments. In each edition I explore the grassroots experiments happening across the ecosystem.

Disclaimer: I work on helping create a world of infinite possibility at Dapper Labs. All opinions are my own and don’t represent the opinions of Dapper Labs.