The Billion Dollar Buyer

GM frens,

It’s been an exciting week in the Web3 world with NFT NYC taking center stage this week as NFT collectors from far and wide flock to the big apple.

Outside of NFT NYC, the last 7 days has also been a busy week for Web3 related acquisitions with both UniSwap and eBay purchasing Web3 products to expand their existing offerings.

In today’s edition of The Ground Floor we will be focusing on eBay’s acquisition of KnownOrigin, and the position this purchase puts eBay in as they seek to expand their existing business.

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The Billion Dollar Buyer

Breaking down the eBay’s acquisition of the NFT marketplace KnownOrigin...

In 1996, Pierre Omidyar founded AuctionWeb, a site "dedicated to bringing together buyers and sellers in an honest and open marketplace."

Less than 2 years later, with more than 2 billion dollars worth of goods being purchased on the platform, AuctionWeb was renamed to eBay.

During this time, eBay made a number of strategic acquisitions to advance their ability to continue to win market share, acquiring several startups including the acquisition of PayPal for $1.5 billion in August 2002.

In the time since, eBay has continued to double down on this strategy which brings us to their most recent acquisition: KnownOrigin

Who is KnownOrigin?

Absent this acquisition news, you’ve likely never heard the name KnownOrigin before.

Candidly, there’s a very good reason for that with the platform having facilitated less than $8 million in trade volume since their launch in 2018.

By comparison, despite the bear market we currently find ourselves in, OpenSea has facilitated over $15.9 million in trade volume in the last 24 hours alone.

As such, it’s crystal clear that this acquisition represents much more of a starting point, rather than an end point for eBay in the Web3 world.

Expanding into Web3

Its been clear for many months now that eBay views NFTs as a core component of their future success.

While eBay is currently without a user base who are accustomed to purchasing NFTs — what they do have is a massive network of people who are interested in purchasing physical goods online.

How big is their network? In 2022, eBay had 150+ million users — 120 million more than the 30 million users MetaMask boasts, and 150x the number OpenSea has.

Can eBay really win in Web3?

eBay is in a great position to help onboard millions of people into the Web3 World.

Despite the low volume KnownOrigin has so far facilitated, this acquisition marks a trend whereby eBay — a $24 billion dollar company is making moves into Web3.

One area in particular we think eBay can really excel in is the authentication and storage of physical collectibles with a corresponding NFT to allow people to buy these assets without having to run the risk of buying replicas.

This would also allow people to add these assets to their portfolio without having to take on the task of storing them, which we suspect would be sufficient to significantly expand this existing market.

Not without competition

When it comes to bridging physical collectibles into the Web3 world, eBay wouldn’t be the only platform working on this problem with Americana having raised a $6.9 million seed round from the co-founder of Reddit Alexis Ohanian in May 2022.

Nonetheless, it’s hard to ignore the advantage eBay would have against any & all startups courtesy of their existing network of 150+ million consumers — many of which we suspect would be open to purchasing physical collectibles tied to tokens.

The Future Outlook?

This acquisition puts eBay in a great position to expand their business by offering their existing customers the means to purchase NFTs.

If eBay does pursue this path they will need to significantly simplify the current process for people to purchase their first NFT, however, should they get this right there’s certainly a future whereby eBay could be one of the biggest players in Web3.

3 Things You Need to Know

1) Uniswap Labs Acquires Genie

It really is the week for acquisitions.

Uniswap, the Decentralised exchange protocol, has purchased Genie; the NFT marketplace aggregator, that lets anyone trade NFTs cross platform.

Consolidation and convergence in markets comes when sectors start to spread very thin or markets get saturated. In this case however, we’re seeing an entity who have never touched NFTs get into the NFT space, whilst volumes are at year long lows.

2) Doodles Name Pharell as Chief Brand Officer At NFT NYC

Pharell, the legendary musician and generational creative, has been named as the Chief Brand Officer of Doodles.

A big move by one of the leading NFT projects in the space, bringing on who many regard a genius, inside their walls.

3) Christie’s Web3 Head Leaves to Lead CryptoPunks for Yuga Labs

Since Yuga Labs acquired the IP for the legendary NFT collection CryptoPunks… they haven’t exactly done much with it.

This might just be changing as they hire Noah Davis, someone considered a big part of why Christie’s embraced NFTs, and took on Beeple’s huge $69m auction in 2021.

Tweet of the week

Bear markets are for builders.

While this first NFT bubble has well & truly popped, and the consolidation period has just begun, we have a strong suspicion we will see enormous amounts of innovation during this bear market.

Community Update

NFT NYC

Floor held 2 community events during the NFT NYC week and we are beyond grateful for every single person that showed up.

Thank you again for everyone that showed up to our events and we look forward to hosting more events within our community.

Be sure to checkout the #meetups channel within the Floor discord for more events!

Thanks for the read,

See you next time! — OB1, Pet & Corwin.

This newsletter is for informational purposes only and does not constitute financial or business advice to any person or entity.