Sequoia Capital has announced that it is now backing Magic Eden, a newly found Opensea competitor based on Solana. Whilst Opensea completed its latest round at $13 billion, the rival does not yet disclose its established valuation but it is known that Sequoia Capital is sending the firm a cool $27 million boost.
Is Magic Eden the solution to solve all problems tied to Opensea? Are we on a true successor or do the founders just try to hype it out being associated with Solana? Let’s find out!
Sequoia Capital and Magic Eden
According to the firm’s announcement, their bet on Magic Eden is below $27 million. The round packs a few other investors but it is definitely a great start. Magic Eden will tap Sequoia and other new investors, such as Greylock, to help expand into OpenSea’s waters. It has 55 employees dispersed around the world and will open its first office next month in San Francisco.
It also created a decentralized autonomous organization called MagicDAO that anyone can join. Members can vote on things like which NFT collections are featured on the homepage.
Sequoia has been around for 50 years and backed the likes of Apple Inc., Google and WhatsApp. It has only gotten serious about crypto relatively recently, creating a dedicated fund in February with as much as $600 million. “There are needs for crypto-specific companies, whether it’s participating in governance, whether it’s providing liquidity,” said Josephine Chen, a partner at the firm. There are also some dynamics in the tech business that are universal, that Sequoia has watched play out again and again—like when a tiny startup tries to take on a giant.
Opensea NFT marketplace and the industry
It is not a secret that Opensea is leading the pack when it comes to NFT marketplaces. Nevertheless, it’s centralised nature is open to Bored Ape Yacht Club hacks and other hiccups that have recently taken place, and are being resolved.
The lead investor in Magic Eden’s funding is essentially hedging its bets: Paradigm, the crypto-focused VC firm started by a Coinbase Global Inc. founder and a former Sequoia partner, is also a major backer of OpenSea. Magic Eden and its shareholders are anxious to see whether, or when, OpenSea adopts Solana. OpenSea has already conducted tests on that blockchain, according to an analysis of the site’s code by the tech blogger Jane Manchun Wong. OpenSea declined to comment.
Zhuoxun Yin, a former Coinbase product manager, co-founded Magic Eden last year during the NFT boom. The hype has fallen sharply since then. Trading volumes on OpenSea have been cut in half over the past month, DappRadar said. Still, NFT sales reached $2.9 billion in February, according to NFT data provider CryptoSlam, and investors expect interest to hold up in the long term. Investor Marc Andreessen and Reddit Inc. co-founder Alexis Ohanian backed a $30 million fund last week solely devoted to buying NFT artwork. “NFTs are still pretty early,” Yin said.
Is Solana a Magic Eden’s ticket to the greatest?
So far, NFT owners haven’t bought into the promise of Solana. Magic Eden prevails in NFT trade on that blockchain, according to DappRadar, but it’s only the 9th largest NFT marketplace overall. Solana is used mainly for DeFi. But Yin said the blockchain’s advantages over Ethereum will play well in a medium like video games, where NFTs are likely to be traded frequently. “Gaming NFTs will be on places like Solana,” he said. “They’re not going to be on Ethereum.”
Solana is the marmite of blockchain. Hated by some, and completely adored by the others. It truly splits the opinions of hardcore blockchain developers. Those who are in the pro camp say that it is easy to get acquainted with, whilst the opposite team proclaims that it is not even a blockchain. Only time will tell if Solana is really the best solution for NFTs, and for now, Ethereum remains to be the place to be.
Parts of this article were taken from BB