Wang Feng: Fifteen Observations and Speculations on the Quiet Evolution of NFT Marketplaces
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Wang Feng: Fifteen Observations and Speculations on the Quiet Evolution of NFT Marketplaces
Based on the author's speech at the Harvard Venture Capital Summit on July 15, with additions, deletions, and revisions.
Navigating Web3 tides with focused insightsBy Wang Feng
The author previously led anti-virus software and digital entertainment divisions at Kingsoft before 2007. He later founded Bluehole Interactive, focusing on game design, development, and publishing—from PC online games and web games to mobile games—leading the company to a Hong Kong IPO in 2014. In early 2018, he entered the crypto space, founding Consensus Labs and Marsbit. In 2021, he joined the product team at Element NFT marketplace and helped incubate the metaverse platform PlayerOne.
This article briefly reviews fifteen aspects of the current NFT market, including trading protocols, community governance, aggregators, and public chain ecosystems. If you read through patiently, you’ll grasp my central argument: that the NFT market may be—or already is—undergoing significant changes.
1. The Path to a Crypto eBay
Let’s revisit OpenSea’s journey. Eighteen months ago, few outside the crypto world had heard of it. Today, its valuation has surged tenfold, joining the coveted $1 billion club. Crypto investors often compare its dominance in the NFT market to Coinbase and Binance in the cryptocurrency market.
Choosing wisely matters more than hard work—but sticking with that initial choice over time is even harder, especially in the tempting landscape of crypto. OpenSea’s story resembles a "crypto castaway's odyssey." In September 2017, just as the ERC721 standard and CryptoKitties emerged, high-concurrency blockchain gaming brought Ethereum to a halt, causing the project to fail and discouraging imitators. OpenSea was born into this environment but didn’t immediately thrive. Until September 2021, the NFT market remained in hibernation. These pioneers likely imagined sailing to Africa’s Cape of Good Hope, only to end up in Greenland singing “straight north.” It’s hard to imagine how resilient their team must have been—navigating what seemed like an extremely niche path for five long years amid crypto’s turbulence.
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-Hype around public blockchain concepts
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-Bitcoin fork drama
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-Illusions of DApp diversity
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-Spot vs. futures wars among exchanges
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-Suffocating crypto bear markets
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-Filecoin reigniting mining
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-Rise of Uniswap
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-DeFi Summer
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-Algorithmic stablecoins
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-Axie Infinity fueling GameFi
Over five years, one trend after another dominated—yet NFTs were never center stage. OpenSea survived on minimal funding, gradually gaining investor attention until it became a hot favorite. Its two core founders were ordinary engineers from Silicon Valley tech giants with no prior crypto experience, yet they held fast to a grand vision of a crypto-powered eBay, avoiding distractions and temptations all the way—a kind of digital Long March.
2. Contributors List
Social platforms played a massive role in pushing NFTs into the mainstream, enabling broader participation and giving creators a voice to showcase their work. On global social and search trends, NFTs continue to dominate the top tier of crypto-related keywords, surpassing even "blockchain" and "Bitcoin" in influence.
With that in mind, here is my subjective list of key contributors to the 2021 NFT market. I omit Axie Infinity because its NFTs didn’t appear on major public chain NFT marketplaces. The following ten made notable impacts:
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-Jack Dorsey, and his creation Twitter—I believe the market still underestimates this maverick, much like Elon Musk.
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-Beeple, *The First 5000 Days*, and the person who paid $69 million for it.
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-CryptoPunks (pre-ERC721), which actually inspired Dapper Labs to create the ERC721 standard. I still hold several avatars I bought for 400 ETH.
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-Bored Ape Yacht Club and Yuga Labs—my takeaway: never underestimate an ugly, quirky face again, whether in Web2 or Web3. In an era of AI-generated faces, such uniqueness becomes scarcity.
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-Dapper Labs, creators of ERC721 and CryptoKitties, foundational figures in the NFT world. Their Flow blockchain is a gaming-focused chain built by the same team.
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-The NBA and Top Shot moments—the NBA’s brand power is unmatched, and its entry into NFTs created huge ripple effects.
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-OpenSea, the pioneering marketplace that became infrastructure, standardizing product logic and capturing the lion’s share of NFT market gains.
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-Animoca Brands—originally a mobile game developer similar to our Bluehole Interactive, it fully pivoted to crypto post-2017, focusing on blockchain gaming assets. Last April, we discussed acquiring some of their IPs with Yat Siu, but by year-end, I felt the gap between us had widened far beyond geographic distance.
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-A16Z Capital—today’s widespread praise and sharp criticism alike deserve attention.
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-Elon Musk and his mother—why am I getting so annoyed by him lately?
From last year’s first half, the DeFi market—built on DEXs, decentralized lending, and various algorithmic stablecoins—began giving way to colorful, bizarre-looking PFP markets. Many found this shift unbelievable, moving from disdain to confusion to missing out entirely. Thus, during what some call the “NFT Summer,” OpenSea discovered a lush new continent and emerged as the biggest winner. The Bored Ape, mouth gaping wide, puffing marijuana, helped Yuga Labs build a next-gen entertainment empire dream.
I placed Jack Dorsey and Twitter at the top of this contributor list because I believe Twitter was the single biggest driver behind the NFT market.
3. Ambitions of Product-Centric Companies
By last quarter, OpenSea controlled 97% of the Ethereum NFT market—an astonishing figure that left other digital asset exchanges envious and scrambling to launch hastily built competitors. Major players like Binance, Huobi, and FTX jumped in, even Coinbase made a splashy entrance—but none achieved expected results.
There’s a widespread misconception here. Many investors assume resources and traffic are key to entering the NFT market. But those advantages apply mainly to primary markets. Even the best launchpad performance is fleeting—and can backfire reputationally. Without strong secondary market support, any traffic or resources acquired at great cost will simply become liquidity sediment in OpenSea’s open sea.
Compared to giants, newer product-focused startups have been highly active. From their continuous innovation, we see ambitious beginnings. Most of these teams come not from DeFi experimentation, but from Web2 product development backgrounds.
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-On Solana, Magic Eden quickly rose to dominance
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-Trade aggregators: Genie, then GEM, now Element catching up
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-Multi-chain marketplaces: Tofu, Element, NFTtrade
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-Token reward platforms: LooksRare and X2Y2
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-Data dashboards: Nansen leads professionally, while NFTGo, NFTtrack, and TwitterScan enter with novel metrics
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-Wallet-integrated NFT markets: BitKeep NFT Market
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-Verticalized gaming platforms are also emerging
However, we can observe that the NFT trading landscape is evolving toward multiple paths and diversified models—echoing the early days when Yunbi, Binance, OKX, Huobi, KuCoin competed fiercely. Setting aside operational capabilities, let’s look purely at product evolution:
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-Coin-to-coin trading
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-Spot trading
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-Futures and contracts
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-Quantitative and grid trading
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-Copy trading systems
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-Wealth management and lending
Today, NFT markets focus on trading; tomorrow, they’ll expand into lending. Today it’s tools and data battles—what next? I believe DeFi’s composability will eventually migrate here. And I’m confident this market will soon face complex competition akin to CEXs, where technology, marketing, operations, and capital are all essential.
4. Three Active Forces
Ignoring bear market noise, if we examine teams that keep iterating products even during downturns, the trend looks positive. Currently, beyond OpenSea user spillover or new entrants, the most active players may emerge from three directions:
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-Aggregator toolflow
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-Operation-driven token incentive models
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-On-chain data tracking flow
In my view, these nascent forces will capture growing market share. These product and operations teams will increasingly learn from each other—absorbing strengths in aggregation, token-driven governance, and data tracking. As this cycle continues, the NFT market could evolve into a paradigm unrecognizable from today’s platforms.
Of course, this analysis has narrow relativity—it assumes current mainstream protocols still have room to grow and that product designs lack sufficient liquidity-driving capability. A completely fresh approach could disrupt everything.
Next steps require real-world validation, like uncovering fog-of-war maps in strategy games I played as a youth. Without activating new territories, it’s hard to envision what comes next. Perhaps today’s NFT market is merely kindergarten-level competition—the real exam hasn’t arrived.
5. Gradual and Radical Changes in Trading Protocols
Let’s focus on trading protocols within the Ethereum L1 ecosystem. “To adapt to change, stagnation means death.” Looking at decentralized trading protocols, uncertainty abounds. Semi-centralization issues—long criticized by Web3 purists—hang over OpenSea like the Sword of Damocles.
For example, both Wyvern and the recently migrated Seaport protocol use off-chain order mechanisms. Can we achieve full on-chain execution on Ethereum L2—like Magic Eden does on Solana—with fully on-chain order matching? That would enable greater efficiency and better composability, similar to DeFi.
Let’s review how past decentralized trading protocols evolved:
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-OpenSea’s Wyvern lasted until late May this year—the longest-serving NFT protocol veteran. Note: protocol upgrades in decentralized crypto markets don’t follow OS/app update logic—they’re either abandoned or run in parallel.
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-Seaport, OpenSea’s newly deployed protocol, drastically reduces gas fees and is now arguably the dominant protocol across crypto, having burned more gas than Uniswap. OpenSea is migrating most operations onto it.
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-LooksRare uses its own protocol
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-0x Protocol released v4 in March, directly adopted by Coinbase—though Coinbase’s NFT marketplace underperformed badly.
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-ElementEx further reduces gas versus Seaport, recently passed Certik audit, offers extended toolkit, and has opened APIs.
Moving forward, niche fragmentation and lending protocols exist but remain in expert evaluation phases, lacking broad market traction.
These are slow, dull changes. Bigger shifts may come from bold speculation.
Will more robust protocols supporting trading and financial derivatives emerge? Will true composability between NFTs and DeFi happen? That likely requires a new bull market.
Currently, Ethereum L2 ecosystems haven’t taken off—but what about next?
Don’t forget: protocols are the heart and operating system of decentralized apps—the AMD/Intel, iOS/Android/HarmonyOS of blockchains. Protocol upgrades aren’t simple patches like in Web2. We’ll see V2, V3, V4 rollouts across platforms soon enough.
6. Why Aggregators?
Today, it’s not heavyweight crypto exchanges, nor early-token adopters like Rarible (whose flawed product design trapped them in a dead end—many copycat startups vanished completely), nor art-focused platforms SuperRare and Foundation (despite potential, too niche) that are reshaping the NFT landscape.
What’s truly challenging OpenSea’s dominance are teams using tools to build aggregators and daring token incentive experiments—platforms like GEM and reward models like LooksRare.
So why aggregators? This also reveals why mainstream NFT platforms must fully open their trading APIs. While many think aggregators steal OpenSea’s share, the relationship should be win-win.
Markets evolve. Looking back, yesterday’s beauty now seems alien and unbearable. Twenty years ago, internet dawn saw Yahoo decline and Google rise—unexpected miracles. Two decades later, in this blockchain revolution targeting finance, do Uniswap, SushiSwap, and 1inch feel eerily familiar?
Yet comparing DEXs and NFT markets, there’s a crucial difference in decentralization. Uniswap is a fully decentralized, pure-protocol exchange. OpenSea, despite using on-chain smart contracts for trades, runs most processes off-chain to improve order processing efficiency. Hence, many insiders consider OpenSea to have high-moat defensibility.
In reality, aggregators gain clear efficiency advantages only when more trading platforms emerge. As LooksRare and X2Y2 rolled out transaction incentives and captured shares, cracks appeared. Though imperfect in handling cross-chain listings, platforms like GEM and Genie gained legitimacy. Imagine if fewer NFT platforms existed—GEM would merely be an experimental UX playground for OpenSea.
Speaking of tools, let’s analyze how GEM-like platforms used aggregation first, then leveraged top-tier Web2 product design skills to gradually eat into OpenSea’s market:
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-Bulk purchase cart
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-Bulk listing
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-Cross-market listing
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-Collection-wide offers
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-Sweep functionality
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-Embedded mintlist for primary market access
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-Product usability still needs improvement. The revolution isn’t over—developers must keep pushing.
Honestly, applying big-tech benchmarking and rapid iteration principles, OpenSea could replicate all these features internally. While I doubt this aligns with their product philosophy, their slow upgrade pace is undeniable. Buying GEM was a smart, graceful move.
7. Not Opening APIs Is Moving Backward
Some tried entering via social approaches or upstream resource grabs, but for traders focused on liquidity, these offer little immediate value.
Aggregation has become a core gene in the next phase of NFT markets—not just a standalone product. In Microsoft’s era, “integration” was king—a term later criticized as monopolistic bullying, like bundling Internet Explorer into Windows 98, killing Netscape’s lead. In Google and Facebook eras, information aggregation took over as the keyword.
In Web3, DeFi’s “composability” resonates strongly with today’s asset and order aggregation. To fully share market growth benefits, open APIs are essential.
OpenAPI presents a classic A/B dilemma—opportunity vs. risk. Third parties can leverage your order data to boost platform efficiency. Those refusing openness risk isolation, becoming forgotten islands. Unlike centralized crypto exchanges, every NFT platform must proactively open APIs. Politically speaking, in Web3’s age of exploration, whoever refuses API openness embraces Web2-style factionalism. Economically, facing the prisoner’s dilemma, rational actors choosing cooperation (i.e., openness) can reach Nash equilibrium—only through shared liquidity can all parties benefit.
At Web2’s peak, WeChat adopted open platforms; Alipay and PayPal opened payments—all based on this principle. More NFT platforms mean aggregators naturally become price-comparison engines, offering traders best floor prices across markets. Thus, Looksrare, X2Y2, and others entering the space mutually empower platforms like GEM.
8. Designing Reward Systems and DAO Community Governance
Likewise, NFT marketplaces using tokenization have proven viable and sustainable. Let’s compare two interesting cases in operational design:
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-LooksRare launched with top-down branding aimed at overseas communities, resembling a vampire attack. Hats off to their boldness. They rushed transaction mining near bull market’s end—initially accused of self-dealing by whales—then shifted to blue-chip NFT listing rewards. Clever moves throughout.
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-X2Y2 started bottom-up with domestic communities, gradually catching up. Initially offered listing rewards, which didn’t boost trades, then iterated operations multiple times—you can trace X2Y2’s adjustments to see how tough the journey was. Now, direct trading rewards take priority.
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-Clearly, they’re learning from each other competitively.
As an observer, I find their token-governed experiments in user growth and retention deeply insightful—mirroring and critiquing each other, offering valuable lessons for future entrants. This reminds me of comparing exchange tokenomics, though NFT reward complexity exceeds anything I’ve seen before.
Key unresolved questions include:
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-Who to reward: traders, listers, referrers, sharers?
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-Reward traders? Then few will list actively.
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-Reward listings? Beware freeloaders.
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-Referral and sharing rewards
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-If platforms embed primary markets, should launchers get rewarded?
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-Should a community-owned DAO reward fund exist—governed by DAO, open to creators, artists, GameFi partners?
This brings back memories from my game development days. Beyond server stability under high concurrency and third-party cheat prevention, the real headache was system and numerical design—plus preparing Lua scripting tools for live ops events. Economic modeling and operational agility matter immensely.
9. Aggregators ≠ Aggregated Marketplaces
More platforms mean aggregation becomes inevitable. Aggregation patterns will spread across NFT market segments. Never underestimate the market value of a powerful tool-based aggregated traffic gateway.
June: OpenSea acquired GEM.
July: Uniswap acquired Genie.
Both NFT and DeFi leaders snapped up aggregators. Their next moves aren’t hard to guess.
But GEM and Genie face challenges. Neither is a standard NFT marketplace—they lack proprietary trading protocols. As pure aggregators, all orders come from third parties. Think of their contract logic as adding a shopping cart layer atop existing trading functions.
They must adhere to each platform’s commission rate without offering discounts to attract users. For instance: OpenSea charges 2.5%, LooksRare 2%, X2Y2 currently 0.5%. GEM cannot charge extra fees for matchmaking—its net revenue doesn’t match its DappRadar ranking since it lacks transaction fee income. Business model sustainability is questionable.
10. Element 2.0’s Three-Stage Rocket
In July last year, Sequoia Capital, SIG, and Dragonfly Capital invested in Element. It launched version 1 in September with little impact—until recently unveiling Element 2.0.
Earlier models faced binary choices: issue tokens or not, build proprietary protocols or stick to pure aggregation. Element 2.0 breaks this mold with a Web3 “three-stage rocket” design—actually a three-layer architecture.
Though implemented using hybrid Web3/Web2 tech stacks, this is fundamentally a commercial three-tier design—please don’t interpret it mechanically.
-Layer One: Cross-market buy/sell aggregator solving basic liquidity service needs. This foundation is critical—I’ve seen many NFT teams rush to acquire assets and launch projects, only to lose users. Without solid secondary market liquidity, primary market efforts are futile.
-Layer Two: Task-based incentives (trading, listing, sharing) to nurture creator ecosystems, combined with referral rewards to boost engagement and community identity.
-Layer Three: Robust trading protocol offering professional users pricing advantages, enhanced utilities, and superior trading experiences. With this layer, order data, offer tools, and APIs/SDKs are fully opened to partners, enabling deeper participation in shared liquidity cycles.
This integrates aggregators, trading incentives, and data tools into a tightly coupled stack—building a DeFi-like mechanism on a new Web3 product architecture. Product intent is clear: solve NFT asset liquidity and platform traffic in one stop. This differs from OpenSea, LooksRare, and pure-aggregator models like GEM.
More precisely, an aggregated marketplace isn’t just an aggregator. Aggregators are tool-centric—focused on developers. But market platforms need launchpads, proprietary trading protocols, and tight collaboration between operations teams, communities, and products.
11. Speculating the Next Challengers
Going forward, I’m particularly interested in two emerging markets and one gateway: next-gen integrated markets driven by data and algorithms; verticalized gaming markets serving niche scenarios; and wallets as gateways.
-Could there be a TikTok-style content distribution algorithm for NFTs? More accurately: since NFT markets aren’t centralized financial venues but gradually decentralized e-commerce platforms covering all categories?
-Might a fully decentralized, algorithmically matched NFT marketplace emerge?
-Could mobile decentralized wallets become NFT market gateways? If so, what are ImToken and TokenPocket waiting for?
-Will mobile crypto wealth platforms and media outlets show greater interest in joining?
-Will established exchanges re-enter aggressively?
12. Public Chain Ecosystems: Advances and Setbacks
Ethereum’s strong consensus forms today’s NFT market value anchor. As for “digital collectibles,” perhaps I shouldn’t comment.
NFTs shouldn’t belong solely to Ethereum. No public chain ignores NFT ecosystems. Yet the quiet outside Ethereum surprises me. Currently, Solana is the biggest winner—Magic Eden and many creator teams thrive there. NFTs give Solana greater narrative space, making future Metaverse and Web3 projects promising.
-Contrastingly, Polygon, BSC, Avalanche—major EVM-compatible chains—lag noticeably, despite bold promises. Somewhat unexpected.
-BNB Chain’s NFT and GameFi potential is vast—Binance theoretically has excellent GameFi foundations. But compared to Binance CEX and DeFi ecosystem momentum, expectations remain largely unmet. Despite user and project participation, star asset trading volumes haven’t taken off. Binance’s sole problem isn’t size or high barriers—it’s doing too much itself.
-Polygon: I believe they missed their best opportunity last spring during peak token hype. Too conservative. They rose in DeFi by storytelling. Their next big narrative might hinge on their acquired ZK Rollup zero-knowledge proof team.
-Filecoin: NFTs require decentralized storage for media—IPFS, Filecoin, AR. After all, NFT metadata images must reference decentralized URLs in code. Future image files will grow larger, yet Filecoin hasn’t capitalized on this grand narrative. The largest storage chain’s circulating market cap inexplicably dropped 95% last month.
-NEAR Protocol: I once had duck dinner with co-founder Illia Polosukhin—we call him Yilong. He’d just raised big funds, full of ambition. But Mintbase, NEAR’s early mover, shows limited progress since.
-Justin Sun engaged NFTs early, investing heavily in art NFTs. What impresses me most is his relentless drive. We drank in Singapore till 3 a.m. He plans NFT funds and wants Tron’s NFT marketplace to shine—but how will Tron attract NFT creators into its ecosystem?
-Polkadot: Last autumn, I spent nearly a morning chatting one-on-one with Gavin Wood near Tsinghua University’s Wudaokou. He’s the original Web3 concept proposer. We discussed Web3 tech stack trends—he’s one of the few tech leaders in crypto who lights up talking tech like a child, a passionate evangelist. He believes in NFTs. Yet two years on, Polkadot lacks NFT influence matching its industry stature?
-Flow blockchain: Birthplace of CryptoKitties and ERC721 creator. After peaking with NBA Top Shot, it went quiet. Still, I hope GameFi remains its chance.
13. Power of Communities
June’s NFT.NYC conference in New York felt better than expected. Despite ongoing crypto bearishness, NFT exhibitions and parties stayed vibrant. The mood temporarily drowned out fears of impending doom and even erased memories of Bitcoin falling 70% from highs and the devastating collapses of LUNA and Three Arrows Capital. By contrast, CoinDesk’s long-running Consensus conference in Austin felt relatively subdued.
Today, NFT communities are moving offline. At more gatherings, “I’ve got a Punk,” “You’ve got an Ape”—these identities from Azuki circles help break ice and form connections effortlessly. NFTs have become crypto business cards. Owning prominent NFTs in Web3 confers status akin to legendary guild leaders in early MMOs like Legend of Mir or World of Warcraft US servers. Today’s NFT whales and social KOLs command respect and draw eager courtship from communities and platforms alike.
Cultural attributes matter greatly in NFTs. Community activity, member cohesion, and brand influence are prerequisites for project success. I notice increasing local Chinese organizing Mfer meetups—new NFT projects are likely sprouting from this group. Many hope its price breaks 10 ETH, though floor prices hover between 1–4 ETH. But this gives more people entry chances.
14. Asian Faces Awakening
NFTs have financial traits but inherently reflect cultural differences and regional preferences. Last year, many investors wrongly assumed otherwise. This year, that illusion shattered. NFTs are no longer U.S.-centric. Asian celebrities, anime, and IPs are joining steadily.
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-Takashi Murakami’s Sunflowers
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-China’s first meme NFT series: Cold Bunny
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-Jay Chou’s PhantaBear series
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-Edison Chen’s NFT series NVLPE
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-Shawn Yue’s Zoobie series
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-Ivy Yin’s Thierverse initiative
I’ve met Ivy Yin several times in Silicon Valley. She plans to integrate her NFT brand with offline beauty products. Her hands-on dedication inspires many. I believe once the market turns bullish, holders will smile
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