Reservoir, a key infrastructure provider for NFT marketplaces such as Coinbase (NASDAQ:COIN), MetaMask, and Magic Eden, announced the successful closure of a $14-million Series A funding round. The investment aims to enhance the company’s infrastructure and extend its services to additional marketplaces.
The funding round, which took place on February 5, was spearheaded by Union Square (NYSE:XYZ) Ventures (USV), a New York-based venture capital firm with a history of investing in technology and blockchain ventures, including Polygon, Dune Analytics, Matter Labs, Arweave, Dapper Labs, and Algorand. Reservoir’s expansion plans are supported by additional contributions from Variant, Archetype, and Square Peg Capital.
Reservoir’s expansion will focus on enabling a broader range of networks to incorporate NFT trading. The firm plans to provide a suite of tools for indexing token images and data, as well as for interacting with decentralized exchanges and NFT marketplaces.
Jason Maier, co-founder and chief operating officer of Reservoir, emphasized the importance of developing tools to facilitate token trading on blockchains, which he noted do not inherently offer such capabilities. He outlined the need for robust token indexing, liquidity aggregation across marketplaces, and interfaces with decentralized exchanges. These are the types of APIs and developer tools that prominent teams like Coinbase, MetaMask, and Magic Eden rely on to operate in the NFT space.
Despite a significant downturn in the NFT market, with activity dropping 76% from its peak in 2022 and reaching the lowest trading volume and sales count since 2020, Maier remains optimistic about the future of NFTs. He attributes the market’s volatility to the deflation of an "NFT bubble" but sees enduring potential in NFTs to transform digital ownership. Maier highlighted the diverse applications of NFTs that continue to excite the industry, ranging from collectibles and art to real-world assets.
Recent signs suggest a resurgence in the NFT market, with sales hitting $877 million in December, as reported by CryptoSlam. In the same month, Yuga Labs, creators of the Bored Ape Yacht Club NFT collection, acquired tokenization platform Tokenproof, indicating ongoing strategic moves within the sector.
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