Crypto Exchanges Look To Cash in on NFT Boom

Crypto exchanges are eager to move away from trading fees as the market sell-off continues

May 4, 2022 04:00 pm

Blockworks Exclusive Art by Axel Rangel

Coinbase and Kraken move ahead with NFT marketplace plans
Coinbase hopes to create a social community while Kraken offers zero gas fees

As the sell-off in cryptocurrency markets rages on, digital asset exchanges looking to diversify revenue outside of trading fees are taking an interest in a different part of the industry: NFTs.

US-based crypto exchanges Coinbase and Kraken each have their own NFT (non-fungible token) marketplaces in the works.

Coinbase’s venture, which it calls a “Web3 social marketplace,” moved to open beta testing Wednesday, allowing users to create a profile and trade on the platform.

Newsletter

Subscribe to The Breakdown

As part of the testing, Coinbase will offer zero transaction fees for a limited time, the exchange said in a blog post. Fees that are “in-line with Web3 industry standards” are slated to follow.

Coinbase and Kraken both face steep competition from incumbent NFT giant OpenSea — leading to such money-losing promotions in a bid to gain market share as upstarts.

Kraken has opened a waitlist for its NFT marketplace, which it hopes to launch later this year.

The exchange said once an NFT is custodied with Kraken, users will not have to pay any gas fees, which power transactions on the Ethereum blockchain. Gas fees change based on supply and demand and have risen recently as investor interest in digital collectibles has spiked following a year-end 2021 sell-off.

The zero-fee structure “helps you build your dream collection with near-instant transfer speeds and the peace of mind that spikes in network activity will not impact the cost of your purchases and trades,” Kraken wrote in a blog post.

The launches come as interest in the NFT space, which had been dwindling, starts to pick up again. Toward the end of April, weekly NFT trading volumes were up about 30% from March lows, according to data from crypto analytics firm Nansen.

Major NFT trading platform OpenSea logged a new daily trading record this week with more than $476 million worth of ethereum NFT trades on Sunday, according to data from Dune.

Get the news in your inbox. Explore Blockworks newsletters:

The Breakdown: Decoding crypto and the markets. Daily.
0xResearch: Alpha in your inbox. Think like an analyst.

Tags

Newsletter

The Breakdown

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Digital Asset Summit 2026

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

buy tickets learn more

recent research

Research

Kinetiq Protocol: From LST Infrastructure to HIP-3 Deployer

Kinetiq has established itself as Hyperliquid's dominant liquid staking protocol, holding 82.5% of LST market share with $610M in TVL. The protocol is now expanding beyond its kHYPE staking core into higher take-rate verticals: iHYPE for institutional custody rails, Launch for HIP-3 capital formation, and Markets for builder-deployed perpetuals. We view Markets, launching Jan. 12, as the highest-potential product line given its mechanically scalable, activity-linked unit economics. Near-term revenue remains anchored by kHYPE's KIP-2 fee schedule (~$1.6M annualized), while Markets provides embedded optionality if HIP-3 economics normalize post-Growth Mode. KNTQ's setup is relatively clean: zero insider unlocks until November 2026, 6.2% buyback yield from staking revenue, and cleared airdrop overhang. Risks center on unproven Markets execution, declining kHYPE TVL despite ongoing incentives, and competition from Hyperliquid's native initiatives.

by Shaunda Devens