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Coinbase won’t quit its NFT project despite low volume

Coinbase won't quit its NFT project despite low volume

The past week’s trading volume on Coinbase’s marketplace for NFTs was less than 3 ETH.

The cryptocurrency exchange Coinbase gave a sign yesterday that it won’t quit its NFT project any time soon. Even though sales have dropped a lot over time and shareholders are paying more attention now than they used to.

After the company reported higher-than-expected sales and a $577 million loss for its last fiscal quarter of last year, investors and analysts asked Coinbase a number of questions about the health of the business on an earnings call.

One question from shareholders was about the exchange’s NFT venture, which started last spring with a platform. It asked Coinbase to say how much money the company has lost because of its NFT marketplace and how it plans to “reduce the burn” that comes with running a business.

The investor was also interested about the future of the market and how Coinbase could increase its market share. According to a Dune Analytics dashboard, Coinbase NFT has seen only 41 sales and less than 3 Ethereum worth approximately $4,900 over the past week.

In comparison to other NFT marketplaces such as OpenSea and Blur, which have seen approximately 303,000 and 53,000 sales within the past week, it is a virtual ghost town.

Without disclosing any specific project losses, Coinbase President and COO Emilie Choi stated that Coinbase NFT remains a worthwhile endeavor. “We continue to see medium and long-term opportunities here,” she said.

But Choi did appear to say that Coinbase is now devoting fewer resources to the initiative now than it has in the past. “We’ve got a very lean team on it now, but we’re not throwing in the towel by any means,” she said.

Last month, Coinbase announced it was laying off 950 employees, the exchange’s second round of layoffs in the past year after trimming its headcount by 1,100 employees last June. “The Coinbase NFT team has realigned its resources to focus on the highest impact areas for our users,” a Coinbase spokesperson told Decrypt. “We’re bringing increased focus and efficiency to a smaller set of high-impact focus areas within Coinbase NFT.”

Meanwhile, Coinbase NFT has been paring back on some parts of its business. In a recent Tweet, the company said it was “pausing” future NFT drops with creators to “focus on other features and tools that creators have asked for,” according to a recent Tweet.

But because Blur and OpenSea are putting less emphasis on creator royalties in the NFT market as a whole, Coinbase could benefit from the change. Deathbats Club’s team recently said that Coinbase NFT is now its preferred platform and that trading of the project’s tokens on OpenSea would be stopped.

Choi said Coinbase NFT was formed as part of the exchange’s 10% venture allocation strategy. She added that Coinbase is taking “a more rigorous approach to investment in new and unproven products,” yet will do so “in a very lean, efficient way and get back to just smaller team.”

Even though the project is changing in some ways, a Coinbase spokesperson told Decrypt that the NFT marketplace still has a long way to go.

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