What is Magic Eden? How to Get Started on the NFT Marketplace

By August 5, 2022NFT
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NFTs on Magic Eden (Screenshot modified by CoinDesk)

Magic Eden is the most popular NFT marketplace on Solana, a blockchain that rivals Ethereum. It lets you sell non-fungible tokens (NFTs) – unique crypto tokens that usually bear a pointer to a piece of digital art or music or an in-game collectible.

The company announced on Aug. 2, 2022, that it is going multichain and will expand its offerings to Ethereum NFTs, but its primary ecosystem and main blockchain is Solana as of this writing.

To use Magic Eden, you’ll need a Solana-compatible wallet (such as Trust Wallet or Exodus Wallet) filled with some SOL – enough to pay for your NFT, plus the transaction fee on the Solana blockchain. Hit “connect wallet” on the top right of the site – no need to create an account – then click on a collection and bid on a project. It’s really an interface for Solana NFTs, so any Solana NFT project is hosted on the platform.

The largest NFT collection by trading volume and floor price, as of this writing, is Okay Bears, a profile-picture collection of bears. Like market leader OpenSea, Magic Eden lets you sort through collections by attributes – in this case, the hats, fur and eyewear of the bears. In the world of NFTs, rarer attributes, or at least those with community cachet, often sell for more SOL than those with more common attributes.

Magic Eden also offers an iOS app. The app, however, only supports browsing – you’ll have to head to the site on a web browser and connect your web3 wallet to trade NFTs.

There are plans for the marketplace to add support for ETH, the native coin of Ethereum, the blockchain that supports most NFT trading activity. Magic Eden’s first ETH-supported collection will be Ezu, an NFT project that can be minted in either ETH or SOL.

Magic Eden also sells Magic Tickets, which provide access to a decentralized autonomous organization (DAO). In practice, that’s a Discord chat that lets users vote on how the marketplace operates.

The marketplace has a launchpad – a part of the site that lets projects mint NFTs on Magic Eden. The benefit for projects is that they are featured on Magic Eden’s site – kind of like an artist selling off works at a major auction house, like Christie’s. Magic Eden claims that just 3% of projects that apply to the launchpad make it through the application process.

Four friends founded the marketplace in September 2021: Chief Technology Officer and former Uber Eats developer Sidney Zhang; CEO and former FTX employee Jack Lu; Chief Operating Officer and former Coinbase product manager Zhuoxun Yin; and chief engineer and former Facebook developer Zhuojie Zhou.

In July 2022, Magic Eden raised $130 million in a Series B funding round led by Electric Capital and Greylock, with backing from Paradigm and Sequoia Capital. The funding round, which followed a $27 Series A in March, brought the marketplace to a $1.6 billion valuation.

On Solana, Magic Eden's trading volume trounces OpenSea, the market leader for NFT trading that added support for Solana in April 2022. Magic Eden captures 97% to 99% of the daily volume for Solana NFTs, according to a dashboard on Dune Analytics from SeaLaunch that derives trading data from the two platforms’ trading fees.

Still, OpenSea remains the larger platform in terms of daily sales across all blockchains. While Magic Eden averages around 55,000 SOL a day, or $2.1 million as of this writing, OpenSea records trades about $15 million in Ethereum every 24 hours.

Network dominance marks the major difference between the two marketplaces. Solana is a rival to Ethereum, so Magic Eden and OpenSea maintain their dominance on very different playing fields. Solana’s main difference, as of August 2022, is that it’s faster and cheaper to use than Ethereum.

The network’s token, SOL, was a favorite of venture capitalists and major players, including FTX founder Sam Bankman-Fried and the bankrupt (but once popular) crypto VC fund, Three Arrows Capital. When the crypto market crashed in 2022, SOL cratered from $258 in November 2021 to lows of $26 in mid-June.

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