Why Competition Is Good For Crypto
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Why Competition Is Good For Crypto
If your the first at success it's a golden time however it often leads you into a stagnate no innovative plan because you no longer have any kind of push to make things better when you're already at the top.
The same is true for crypto as many of the projects that are fueling crypto are just like businesses in terms of development. Take OpenSea for example who used to charge NFT creators a pretty hefty fee and collect some serious profits. In fact the profits for opensea were $94.8 million in 2020 and well over 27 billion is 2021. However the bear market kicked in and with that we also started to see a number of other NFT platforms start to show up.
The competition has arrived!
While there are now many platforms like OpenSea they still remained at the top. However a new platform called Blur.io is starting to see a steady increase and growing demand in particular because of their 0% fee system. You see OpenSea charges 2.5% and takes 2.5% from every secondary trade as well.
With this new competition it's starting to seriously take away from of the market share from OpenSea and forcing them to take action. As of yesterday OpenSea is making some rather large adjustments to their markets.
- OpenSea will have a 0% fee for a limited time
- Moving to optional creator earnings (0.5% min) for all collections without on-chain enforcement.
Another big part that has been kicking in lately is that creator fees is a big part of why people build these collections.
What is a creator fee?
It's a fee that is also collected from all secondary market trades. If your NFT changes hand from one person to another then that creator fee also kicks in. It's often around 5% which seriously adds up.
However other marketplaces have been acting as ways to circumvent these creators fees and remove them so you can swap and exchange NFTs without paying the creator fee.
Is this a right move or not idk. Personally I think the creator should be entitled to the fee they places since they created the works however apparently 80% of the NFT space doesn't think so.
I would however agree that the fees are way too high. For crypto the big plus was the low fees however these NFT marketplaces have been charging an arm and a leg lately if you look at them. Creator fees of 5% or higher and a 2.5% fee from the marketplace means 7.5% or higher fees on opensea and I've seen this across many other platforms as well.
This is where competition is good as it's reducing fees down to a more reasonable level.
What are you thoughts on creator and marketplace fees?
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Yes, I agree with you, competition is very important to progress in any field. Because when there is competition then there is motivation and when there is motivation there is also success.
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When it comes to platforms I think its best to have a free tier service and then have a paid one but that do not interrupt or limit the free tier, like youtube or twitch you can still watch both for free but they both have paid tier for supporters, on a platform like Opensee that might work, they can do limit edition NFTs that have utility on partner platforms but I guess they greedy? then comes another platform with cero fees but other ways to make money and eventually take them down from the top, just a thought, thx for sharing ✌️
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Hello @bitcoinflood
I think creator fees should be lowered for artists.
Thanks for your info.
Barb 😊
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While on the one hand, I think that artists should get a portion of every sale, I think it's more important to have competing marketplaces to prevent monopolies. At the end of the day, users can barter their NFTs amongst themselves without paying fees.
While on the one hand, I think that artists should get a portion of every sale, I think it's more important to have competing marketplaces to prevent monopolies. At the end of the day, users can barter their NFTs amongst themselves without paying fees.
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Competition is always helpful.
Excellent post, @bitcoinflood
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I understand what you're saying about creator fees. But places like Fiverr take fees from freelancers who use their platform.
Or in cases like selling on Amazon, you're using their platform and trust with their customers to be able to sell there.
So, competition is good for keeping a business on its toes and keeping them from getting complacent.
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Yep but what's cool is with crypto those fees could be much lower and still make it very profitable.
Yes, that would be a very cool thing to create more volume and increase profits.
Enjoy your day😀
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