Non-fungible tokens, or NFTs, have seen a meteoric rise over the past couple of years. Although not a new concept in the crypto-sphere, NFTs saw a resurgence driven by popular projects such as the Bored Ape Yacht Club (BAYC) and Cryptopunks. However, the market became extremely over-heated very fast. At the apex of the NFT rush, pixelated pictures of rocks were fetching millions of dollars, a clear signal of excess that needed to be tampered down.
Over the past few months, NFT values have come crashing back down to Earth, alongside the cryptocurrency market in general. From April to June 2022, NFT sales have dropped 150%. Values have also seen a significant slump. Back in April 2022, the average NFT transaction came in at about $589. Less than a couple of months later, the average NFT transaction collapsed 67% to $192.
Popular projects like BAYC have not been immune to the value drop. The coveted NFT collection is now trading below $100,000 for the first time since August 2021. In May 2022, the floor price for the collection stood at $200,000, showing a floor price drop of 100% over the past month.
Magic Eden Series B Shows Market Conditions Not Deterring VC and PE Investment Activity
Despite the overall market slump, NFT startups have continues to raise money from private equity and venture investors. Magic Eden is the latest startup to raise millions of dollars from notable firms.
The community-centric NFT marketplace, Magic Eden, just announced it has closed a $130 million Series B funding round, which values the startup at $1.6 billion. The funding round was co-led by Electric Capital and Greylock and featured participation from Paradigm and Sequoia Capital. Magic Eden says the proceeds will be used to continue expanding its primary and secondary marketplace, as well as exploring multi-chain opportunities.
Magic Eden’s Launchpad has successfully launched over 250 projects to date. Its complementary secondary NFT market is active with over 7,000 listed collections, which sees 92% of its volume on Solana-based projects. In addition to its NFT marketplace, the startup has been very active in expanding its reach to high-growth blockchain gaming through its Eden Games portal. Since its establishment in March 2022, Eden Games has launched over 50 games and metaverse projects, which have been responsible for 90% of all gaming NFT volume on the Solana blockchain.
Mike Duboe, Partner at Greylock: “Magic Eden is one of those top 1% teams that is just firing on all cylinders — product execution, community growth, transaction volume — and the velocity in less than one year of existence has been exceptional. We believe Magic Eden is the most interesting and durable offering for creators and collectors alike — from its primary NFT launchpad, to its embedded marketplace API empowering projects to host their own secondary transactions. The team listens and lives with its communities, and it shows in the product, metrics, and feedback.”