Deciphering the Metaverse: The fragmentation of marketplace liquidity

In a whirlwind of cascading events, the NFT market continued to inexorably expand its reach and pass vital milestones. Despite being up against stiff competition, the dominating NFT marketplace, OpenSea, has managed to dodge bullets from its attacking competitors so far and made significant progress regardless. This resilience was substantiated by the fact that it already surpassed its previous all-time high (ATH) of 1.2M ETH in trading volume during the ongoing month of January, having generated 1.4M ETH as of this writing. Although it burst through its previous ATH in ETH terms, it still has not passed it in USD terms.

Paradoxically, this flies in the face of the ubiquitous narrative of a mass exodus of users fleeing the incumbent. Nevertheless, the rivalrous NFT marketplace, LooksRare, got off to an explosive start after its official launch last week and already realized a staggering $5.7B in raw trading volume. However, as The Block Research analyzed before, a significant share of this was driven by wash traders deploying their cunning strategy to rake in as many trading fee rewards as possible.