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NFTs need to be about connecting creators with collectors, says Magic Eden’s Huang

source-logo  blockworks.co 24 August 2023 16:20, UTC

Tiffany Huang asserts that Solana’s “superpower” is its transaction capacity, attributed to low transaction costs and high speeds.

But, Huang asks, how does this advantage translate into real-world applications? More importantly, she asks, “Why does someone outside of crypto care?”

On the Lightspeed podcast (Spotify/Apple), the Magic Eden general manager says the NFT narrative needs to change. Rather than being driven by speculation and technology, the narrative should be driven by use case, she says, with a greater emphasis on “collectible moments” and the ability to foster connections between creators and collectors.

Magic Eden, the most visited NFT exchange powered by the Solana network, brings a “highly engaged set of users that are very real and proven over time,” Huang says. According to Huang, the exchange powered “ten times the number of transactions as Opensea” in 2022, with average session lengths of 14 minutes — one and a half times longer than average user sessions on TikTok.

Huang sees NFTs achieving broader appeal as collectible moments, used by creators to gain a better understanding of their collectors. “This is a problem that exists in Web2,” she says. “You cannot distinguish who is watching your content versus who would actually spend money on your content.”

“You can’t distinguish your fans from your super fans,” she says. The exchange’s distribution capacity and ability to gain detailed knowledge about their users gives it distinct advantages in this regard, Huang says. “That’s where I think there are really interesting things that Magic Eden can start to play with.”

Making friends with PFPs

While the 10K PFP collection is now generally considered a tired format, it’s the “only use case that has worked so far,” says Magic Eden co-founder Zhuoxun Yin. “There needs to be a bunch of other creator types that have to come in and try things for NFTs,” he says.

Yin reflects on post-ICO declarations that ERC-20 tokens were “dead,” noting that many new form factors based on the tech emerged during market doldrums such as governance models, token incentives and DeFi. “All that stuff came after people were labeling tokens as dead.”

“People oftentimes forget this universal truth,” Huang adds, “the current iteration of NFTs really popped off during the pandemic because people wanted to make friends.”

“That’s the reason why NFTs are different from fungibles,” she says. “They’re inherently emotional.”

“NFTs will continue to be a way for people to connect and form deeper relationships,” she says. “I just don’t know if the 10K PFP supply is going to be the thing that brings back the next bull.”

Internet level access for anything

“We should lean into the things that make the properties of NFTs really interesting,” Yin says. “All we’ve really done is we’ve pointed NFTs to images, basically.”

“You can make a lot of these things programmable in many ways,” he adds. “Barely anyone has touched that surface area.”

Yin is intrigued by the ability of NFTs to “spin up internet level access for anything.”

“It’s no longer confined to things that are physically possible,” he explains. “You suddenly have internet level scale for anything that you do with NFTs.”

“That is what makes this design space the most interesting of all of crypto.”