Three new upstarts emerge to challenge the central position of exchanges: MetaMask OpenSea and Coingecko

Wu said author | Colin Wu

Editor of this issue | Colin Wu

On September 3, affected by poor U.S. employment data and the outside world's belief that interest rate hikes would slow down, cryptocurrency prices skyrocketed. Bitcoin reached its highest point in more than three months (US$50,961), and Ethereum once exceeded US$4,000.

An interesting phenomenon is that in the past, when the market fluctuated, the three major exchanges, Coinbase, Binance, and Huobi, would experience lags and downtime. However, on the evening of the 3rd, everyone found that it was Coingecko and OpenSea that experienced downtime and lag.

From this detail, it can be seen that the traffic center of the crypto world seems to be quietly changing.

Coingecko and OpeaSea, which have monopolized the market and NFT trading fields, and the "ID card + WeChat payment" of the DeFi world: the little fox MetaMask, are becoming the three new upstarts in the crypto industry.

However, the market value and profits of exchanges are still far ahead. The market value of the top exchanges such as Binance+Coinbase+FTX+huobi+Bybit exceeds 300 billion US dollars, and the profit exceeds 10 billion US dollars every quarter. From the perspective of revenue, the newcomers are far behind the exchanges, and their annual profit may be less than 1 billion US dollars for the time being. But from the perspective of growth, the traffic of exchanges is declining, and the three newcomers are rising rapidly.

The three new upstarts have shown amazing growth: OpenSea's cumulative trading volume in August has reached 3 billion US dollars, 9.3 times the previous historical high of 320 million US dollars in July. The number of active users of MetaMask wallet exceeded 10 million in August, an increase of 19 times compared with a year ago, and it may become the most used software in the crypto world in the future. After CMC was acquired, Coingecko's traffic and number of users grew rapidly.

In contrast, traditional exchanges are facing strict regulation. Binance, Huobi, FTX, etc. have all restricted their most profitable contract transactions. Huobi's revenue in July 2021 dropped 53% from June, and Binance's profit in the second quarter was about US$1.95 billion, a decrease of 33% from the previous quarter.

In addition, the three upstarts have formed a monopoly advantage in their respective fields. OpenSea accounts for 98% of the trading volume in the hottest NFT field; apart from Coingecko, it is difficult to think of a barely usable market website; Little Fox has become the ID card + WeChat payment of the DeFi world. The only thing it needs to worry about is that it is too powerful, which will attract the attention of regulators and hackers. The tentacles of the exchange were easily defeated in these fields (NFT, market, wallet, etc.).

Among them, Little Fox is undoubtedly the most imaginative. Just as WeChat Pay and Alipay entered the fund field, Little Fox quickly created a revenue of 100 million US dollars after entering the aggregation trading field. Aggregation trading, which countless traffic platforms had been thinking about but had found extremely difficult to do in the past, was easily successful with Little Fox.

Times make heroes, and the rise of NFT and DeFi has led to the emergence of new elites (Coingecko has also received wide acclaim for its DeFi data). But it is not easy for new elites to challenge old money.

First, their current advantage is mainly the sudden growth brought by specific fields, which in turn differentiates them from centralized exchanges. However, if the NFT or DeFi fields weaken or the industry focus shifts, they may be greatly affected. Second, the advantages of the newcomers are mainly in the field of traffic. How to convert traffic into revenue without affecting user experience is not easy to solve. The profit path has been clearly found by the exchanges, but the three newcomers still need to explore hard.

Finally, none of these three upstarts have issued their own tokens, and I believe this is what retail investors are most concerned about.

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