How a Tiny Startup Beat Magic Eden and Rarible to Build ApeCoin’s NFT Marketplace
When the ApeCoin DAO community began chatting about launching a custom marketplace for Bored Ape Yacht Club NFTs this summer, major existing marketplace startups like Magic Eden and Rarible teed up proposals to build feature-rich platforms—with no upfront fee.
But when APE token holders cast their votes, it wasn’t either of those well-capitalized, VC-funded firms that won the community’s approval. Instead, it was Snag Solutions—a two-person startup founded this summer by former DoorDash employees—that secured the only passing proposal, with 88% positive votes from token holders.
“It was a really interesting process,” Snag Solutions CEO and co-founder Zach Heerwagen said to Decrypt about convincing ApeCoin DAO voters. “We were small enough and nimble enough to adjust our entire business approach to win.”
Today, the firm’s official ApeCoin NFT marketplace went live, enabling trades for popular Yuga Labs-developed collections like the Bored Ape Yacht Club, Mutant Ape Yacht Club, and Otherside metaverse game. But why would holders of ApeCoin—the Ethereum-based crypto token built for the Bored Ape ecosystem—need their own custom marketplace?
For one, it offers much lower fees than a general, all-purpose NFT marketplace like OpenSea, which has a standard 2.5% fee. The ApeCoin platform charges a relatively tiny 0.25% platform fee on listings in APE and 0.5% fee on listings in ETH. In both cases, 0.25% goes back to the ApeCoin DAO’s treasury. Snag Solutions only benefits on sales listed in ETH, taking the remaining 0.25% fee.
The other potential benefits come with deeper Bored Ape ecosystem integration than typical NFT marketplaces. The ApeCoin marketplace will show ApeCoin staking details for any listed NFT, for example, as well as highlight the matching-numbered NFTs across Yuga’s projects. It’ll also tell shoppers whether a Bored Ape has used a Serum NFT to yield a Mutant Ape NFT.
Some of the above might make zero sense to casual observers. But the marketplace’s audience is the ApeCoin faithful—people who are invested in the future of the Bored Ape ecosystem, and quite likely own some of the NFTs. They might appreciate all of that nuance and supporting detail, on top of the lower fees and DAO treasury contributions.
Snag Solutions has only been around for a few months, and it has built a few other custom marketplaces for NFT projects, such as GoblinTown, Genuine Undead, and Crypto Chicks.
But the upstart firm, with only two full-time employees—Heerwagen and fellow co-founder and CTO, Jason Jong—faced off against a pair of major players to win the community’s support to build the marketplace. Magic Eden, in particular, aggressively promoted its efforts to build the marketplace, given its new entrance into the Ethereum space at the time.
As Heerwagen alluded to earlier, the win came from smart pivots. Snag Solutions’ first pitch wasn’t a winner. The firm initially wanted a $50,000 upfront payment and specified higher overall fees. The community was unmoved, and the bigger-name, lower-fee proposals from Magic Eden and Rarible had the Snag Solutions team rapidly reworking its model.
“Their proposals made our proposal better,” said Heerwagen, “as with anything in business.”
So the duo shook things up. Snag Solutions ditched the upfront payment request and trimmed down its fees, but it also went a step further: it pinpointed some of the key complaints about Magic Eden and played into a growing narrative about the Solana-centric startup.
The firm had a startling run of success earlier this year, dominating the Solana market and hitting a $1.6 billion valuation in just nine months. But Magic Eden has been a target for critics, who allege that its custodial marketplace model puts users’ NFTs at risk, and its closed-source tech isn’t very Web3 in nature. Snag Solutions used that perception to its advantage.
“Magic Eden's proposal was super feature-rich and built by a market leader,” Heerwagen recalled. “And so we pivoted our entire kind of smart contract stack to be entirely on-chain and open-source, so that we could lean into the narrative that Magic Eden is fairly centralized and doesn't play well by Web3 values.”
Ultimately, Magic Eden’s proposal—which held voting during the same week in September—failed with only 40% positive votes (measured by token share). Rarible’s proposal lingered and didn’t go up for a vote until this month, well after Snag Solution’s proposal was approved, finding only 14% of votes in favor of a Rarible ApeCoin marketplace.
Leaning into concerns about Magic Eden was a shrewd move, but Heerwagen said it wasn’t purely theatrics. Snag Solutions emphasized ideals like decentralization, interoperability, and non-extractive models, and found a receptive audience among ApeCoin holders.
“I was candidly floored by how well the community resonated with that,” he told Decrypt.
The messaging worked, and now the ApeCoin DAO has its own NFT marketplace. The crypto winter has only gotten colder, however, with Bored Ape NFT prices sinking and ApeCoin setting an all-time low price this month amid the collapse of FTX. It’s a tougher market for traders, but Snag Solutions aims to help play a part in keeping the Ape buzz alive.
“We're relying on [Yuga Labs] and on ourselves as a community, which is the cool part, to continue to add value to the tokens and ecosystem here,” said Heerwagen.
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