- Paradigm Capital led the NFT marketplace's Series A raise
- Magic Eden is investing in Solana for its low costs and better performance than Ethereum
Solana-based NFT marketplace Magic Eden has closed a $27 million Series A funding round. The raise was led by investment dealer Paradigm Capital, with contributions from Sequoia Capital and Solana Ventures. Backed financially by the raise, Magic Eden intends to expand the breadth of products and services that it offers users.
A bet on Solana – the cheaper, better-performing alternative
Magic Eden aims to be the first mover to gain a real hold on the Solana NFT market space before OpenSea does. The latter is easily the most dominant marketplace in the NFT business, bragging the lion's share.
Though OpenSea suffered a 50% downturn in trading volumes last month compared to January, it still ranks the largest marketplace for digital collectables. Even with the decline, it collected $2.9 billion in sales.
In comparison, Magic Eden ranks ninth, and it is looking to leverage its focus on Solana to have a stab at the big bear's market dominance. One of OpenSea's most significant weaknesses is that it primarily hosts Ethereum-based NFTs, which are, to be fair, the most dominant of all NFTs but are also significantly more expensive than those on other chains.
The Ethereum focus means that OpenSea misses out on NFTs from these other chains with better conditions for NFTs – cheaper costs and higher performance (transactions per second) in authenticating NFTs. One such chain is Solana.
Though OpenSea is already ahead in this pretty early stage of evolution, co-founder of Magic Eden Zhuoxun Yin believes that Solana will edge Ethereum in one specific area. The ex-Coinbase product manager anticipates that NTFs based video games will continually choose Solana over Ethereum, as they usually involve frequent trading of the digital tokens.
"Gaming NFTs will be on places like Solana," he noted. "They're not going to be on Ethereum."
Truly so, Solana holds a 90% market share in the secondary trading volume of NFT games.
OpenSea is already snooping around Solana
If Magic Eden is to establish a stronger grip on Solana, it must proceed much quicker, given that recent reports have suggested. OpenSea is already exploring support for Solana NFTs. According to tech blogger Jane Manchun Wong, a look at the marketplace's website code indicates that it is working on the integration of Solana alongside its Phantom Wallet.