The online auction behemoth eBay is getting into the NFT game. The company confirmed via Reuters that they will be allowing the sale of non-fungible tokens (NFTs) beginning Tuesday, May 11th sellers who meet eBays standards will be allowed an “NFT inventory.” eBay has also expressed that they will be allowing NFT sales with traditional payment methods like credit cards and Paypal.
This big news will surely have some ripple effects throughout the NFT space, but what those effects might be is yet to be seen for existing creators, collectors and blockchain entrepreneurs.
I recently asked David Sneider, founder of Lit Protocol, and a forward thinking NFT marketplace called HelloApricot.com, what his thoughts were on eBay entering this space and his response echoed some of my own sentiments around this development. According to Sneider: “With deeper utility for NFTs coming soon, eBay is setting themselves up to become the crypto entry point for millions of new users and extend their offering into the metaverse.”
With the ability to use eBay as a secondary marketplace for certain NFTs, I believe this could be a massive opportunity for the entire NFT community and ecosystem.
Removing the crypto complexity for new users is one major weakness of nearly all NFT marketplaces out there. While I have been a true believer in blockchain and crypto since 2014, I do feel that the “meta maskery” needs to be simplified industry-wide for non-technical users. eBay will be one of those entry points that anyone can interact with seamlessly and that will most certainly drive other marketplaces to also innovate within the user experience arena.
— Gary Vaynerchuk (@garyvee) May 11, 2021
Another major challenge facing a majority of NFT marketplaces is the discoverability of artists. eBay entering this space with over 180 million active buyers can potentially drive other NFT platforms to innovate and improve on the gaps in the current state of NFT marketplaces, to retain and attract more users.
Big companies like eBay were always bound to get involved in this space. As the masses are starting to become more aware of NFTs, a large driver of this hype stems from the celebrities and influencers looking to cash in on this crypto craze, while missing the real point and possibilities of non-fungible token technology.
Big names entering the NFT game
In a refreshing twist, influencer Gary Vee and his NFT project Veefriends has, in my opinion, really entered this space thoughtfully and is setting a new standard for what an influencer / celebrity NFT project could look like, by creating additional utility and experiences for his collectors. Ranging from 3 year of access to his annual conference to being able to have dinner or even play a game of basketball with the famous CEO. These types of influencers with millions of followers bring new non-crypto-native users into this space and that, fundamentally, is a good thing.
Founded in 1995, eBay has a long-standing reputation as one of the first online marketplaces for all types of goods and products. The eBay brand lends an enormous amount of additional credibility to this emerging paradigm-shifting technology that is NFTs. While many in the mainstream are maybe still having trouble wrapping their heads around what a non-fungible token is and why they can be so valuable, it’s seeing big brands like eBay jumping into this space, that will give millions of users the curiosity and confidence that may nudge them into the market for buying NFTs.
The massive amount of traffic and eyeballs on eBay is astounding and this most certainly could be a great source of traffic for creators and collectors alike who are willing and able to become savvier in learning how to market and promote their creations.
What could go wrong?
However, there are some potential pitfalls here to take into account with eBay joining the NFT space. The most pressing one is the lack of a recognized NFT royalty standard, that is acknowledged and adopted across all NFT marketplaces.
As it stands now, when a creator’s NFT is removed from most NFT marketplaces to be listed on another, any royalties set for secondary sales are lost, and this negates one of the primary benefits for creators (the ability to be compensated for secondary sales). This will almost certainly be true for NFTs listed on eBay. Specific details around how eBay will implement NFTs on their platform are still scarce.
There has been an Ethereum improvement proposal (EIP) for creating such a royalty standard, proposed by Zach Burks, James Morgan , Blaine Malone, and James Seibel that has yet to be adopted on a massive scale but should be made known to all creators and collectors called the EIP 2981: ERC-721 Royalty Standard. The community should be making it known to all marketplaces that they want a standard adopted for the benefit of the entire NFT economy.
This loss of secondary royalties could create a negative impact on the NFT community and ecosystem. However, this gap is also an opportunity for other marketplaces to step up and adopt a royalty standard in order to retain the best artists, creators and collectors.
Overall, I believe that eBay being in this space will have a net positive effect, and be a major driver of mass adoption that will bring an additional flood of interest and users. Though eventually, these users will want more than what eBay will allow to happen on their platform. These new users will trickle into other parts of this incredible NFT ecosystem. eBay’s move may also spur some additional big brands to pay attention and enter this space, hopefully in a way that also benefits the overall industry and community.
As with anything that involves a big brand like eBay, there will be positive and negative aspects involved. It truly depends on where you find yourself and from what perspective you are viewing this news; as an artist, content creator, collector, curator or just now learning about NFTs.
NFT & Crypto Community Concerns
There are many crucial concepts that I know are important to the blockchain community, such as decentralization and moving away from centralized platforms, middlemen and gatekeepers, and to some, the name “eBay” may sound like the antithesis of the blockchain ethos.
I would like to invite you to consider a different perspective, for those who truly believe in the possibilities and benefits of blockchain and non-fungible tokens. We cannot be maximalists at the expense of mass adoption. In order to alchemize the incredible changes this technology enables, we must align ourselves with how nature operates, which is via the path of least resistance, especially for new users. In all honesty, most people will not care about the technology, but only that it works seamlessly.
There will always be some form of centralized systems because there is a general benefit to having them set up that way. As this technology matures, centralized systems that do not serve us as a society, a human culture, and as a planet will eventually be replaced with more decentralized systems. This will take mass adoption events like the eBays of the world getting involved, paired with a bit of time, development, and patience.
eBay will undoubtedly bring new energy, attention and opportunities to this space and it will be up to each artist, content creator, collector and blockchain entrepreneur to decide how they react to more mass adoption as big brands take note and enter this space with considerable resources, users and capital.