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NFTs were a defining theme of the cryptocurrency market between 2020 and 2022, but sales have slumped in recent years.
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Reservoir, the non-fungible token (NFT) infrastructure provider for Coinbase, MetaMask and Magic Eden, has closed a $14-million funding round to expand its infrastructure to new marketplaces.
According to a Feb. 5 announcement, the Series A funding round was led by Union Square Ventures (USV), a technology-focused venture capital firm based in New York City. USV was an early investor in Polygon, Dune Analytics, Matter Labs, Arweave, Dapper Labs and Algorand, among others.
Additional investors in the Series A round include Variant, Archetype and Square Peg Capital.
The funding will be used to expand Reservoir’s infrastructure to enable more networks to integrate NFT trading. This includes providing tools for indexing token images and data and interacting with decentralized exchanges and NFT markets.
Jason Maier, co-founder and chief operating officer of Reservoir, told Cointelegraph that while blockchains enable digital ownership, the tools needed to trade tokens on chains “don’t come out of the box on blockchains.”
“Creating a unified market for NFTs (and tokens at large) requires robust token indexing, aggregating token liquidity across marketplaces and interfacing with decentralized exchanges,” said Maier. “These APIs and developer tools are what teams like Coinbase, MetaMask and Magic Eden use.”
Related: VC Roundup: Bitcoin RWA, BNB incubator, Web3 gaming secure funding
The bursting of the “NFT bubble” and what comes next
NFTs were arguably the most defining theme of the last cryptocurrency bull market, which peaked in 2021. The momentum continued into 2022, when NFT sales reached a record high of $57.2 billion, according to DappRadar.
However, the market has slumped considerably in recent years, with 2024 seeing the lowest NFT trading volume and sales count since 2020.
NFT activity is down 76% from its peak in 2022. Source: DappRadar
Maier attributed the market volatility to the popping of an “NFT bubble” that followed a highly speculative mania phase of the market.
“At the end of the day, NFTs are simply a type of token, where that token is unique, and we are still extremely excited about how NFTs can revolutionize digital ownership,” said Maier, adding:
“While some of the mainstream focus in crypto has moved on, there are a wide variety of compelling use cases that continue to impress us — from collectibles to art, to [real-world assets].”
Despite the volatility, signs of life in the NFT market have started to reemerge. According to CryptoSlam, NFT sales reached $877 million in December.
In the same month, Yuga Labs, the company behind the Bored Ape Yacht Club NFT collection, acquired the tokenization platform Tokenproof.
This article first appeared at Cointelegraph.com News
