Coinbase NFT marketplace gains too few users after the start

Coinbase NFT, the crypto exchange’s newly launched NFT marketplace, has a problem with attracting users. The once-anticipated platform still has fewer than 1,300 total users, according to Dune Analytics.

On its first day, the marketplace, which opened its beta up to the public yesterday, saw fewer than 150 new users make a trade on the platform, according to public blockchain data available on metrics site Dune Analytics. That brought the total number of active users on Coinbase NFT to 1,112 as of May 4 evening, data from Dune shows.

Coinbase’s exchange has a 24-hour volume of $3.2 billion and almost 2.5 million weekly visits, according to CoinMarketCap. Since launching on April 20, Coinbase NFT volume has reached sales worth $668,668 across a small pool of 1,287 users, according to data on Dune Analytics.

So why isn’t a larger part of its exchange’s overall volume and user base flowing into its NFT marketplace? Although Coinbase’s NFT platform is fairly new, for the second-largest crypto exchange globally, you’d expect better performance. There are several possible reasons.

For one, there’s already lots of competition, with LooksRare, Rarible, Foundation, NiftyGateway, and SuperRare filling niches for smaller markets.

And more competitors are coming. Kraken announced Wednesday that the waitlist is now open for its marketplace Kraken NFT, which will offer zero gas fees (the costs typically associated with transacting on the Ethereum network) through custodied trading and is set to launch in a few months.

Coinbase isn’t offering users any dramatic financial benefits for making the switch from OpenSea, other than promises of no trading fees on the platform for a limited time (though users still have to pay gas fees).

The timing of the launch is also likely an issue for Coinbase’s NFT marketplace. Crypto remains firmly in a bear market, with Ethereum currently down 44% from its all-time high of more than $4,800 in November. Monthly NFT sales are also down from the January high of nearly $5 billion, though the market has recently rebounded with a strong showing in April ($3.8 billion) following a relatively weak March.

A source close to Coinbase, who spoke under the condition of anonymity, told TechCrunch that the Dune Analytics data doesn’t provide an overall number of how many people have signed up for the platform.

“There’s that one stat that says Coinbase NFT total users, and it has been misrepresented as the number of people on the platform,” the source said. “That’s not how many people have signed up – that’s how many people have made a transaction.”

Still, Coinbase NFT opened its marketplace to everyone on May 4. But since then, the number of users has fallen every day, data shows.

“The anticipation of where this should be right now has not matched expectations,” Nick O’Neill, CEO, and co-founder of The Nifty, said to TechCrunch. “The product is overdeveloped; we see this happen all the time.”