Haters Rejoice: Coinbase NFT Is off to a Slow Start

Coinbase NFT is open to the public, but it has very low transaction volume and poor user numbers.

Haters Rejoice: Coinbase NFT Is off to a Slow Start
Doodles NFTs for sale on Coinbase NFT

Coinbase NFT is open to the public, but it doesn't seem like anyone cares. On May 4 2022, Coinbase allowed everyone to sign up for its NFT marketplace beta, but in the following days Coinbase NFT attracted very low transaction volume and poor user numbers.

Coinbase NFT is Coinbase's new NFT marketplace and social platform, similar to OpenSea if it was combined with Instagram. Unlike other NFT marketplaces, Coinbase NFT requires collectors to go through a "know your customer" (KYC) process.

Internet complainers and non-crypto media outlets like Bloomberg and Mashable were quick to call Coinbase NFT a failure, but they also cited data from Dune Analytics directly (oof) and didn't seem willing to understand what's actually going on.

According to on-chain data collected by @hildobby, the Dune Analytics user everyone is quoting as just “Dune Analytics,” Coinbase NFT volume has significantly lagged behind established leader OpenSea and new challenger LooksRare. The following data covers April 20 - May 7, 2022. The "users" count for Coinbase NFT is actually the number of users who have completed a transaction. Coinbase declined to share how many users signed up for the platform.

Platform Volume Txns Users
OpenSea $3,534,716,636 2,298,498 359,151
LooksRare $1,584,643,901 37,823 22,387
Coinbase $734,478 1,675 1,401

So it looks pretty bad. Coinbase knows how to attract users, as it proved with its Super Bowl ad. So what gives?

Obviously, Coinbase NFT launched at a tricky time. The stock market is in trouble, and the crypto markets have been down for months. It's not a great time to launch a platform for buying expensive vanity JPEGs. Coinbase NFT also has a limited selection of blue chip NFTs, such as Bored Apes, compared to NFT marketplace leader OpenSea.

Coinbase NFT’s KYC requirements likely harm its ability to attract the ETH whales holding the best NFTs, because the whales don't want to doxx themselves then pay taxes if they can operate anonymously on other platforms. I also suspect Coinbase NFT is a poor platform for NFT wash trading, which is extremely common on other platforms.

I don't believe we can judge Coinbase NFT's success until the next crypto bull run. Coinbase is an extremely mainstream company, and Coinbase NFT is made to attract mainstream NFT collectors. If NFT interest booms during the next bull run, I expect to see Coinbase NFT take a big bite out of OpenSea's market share.