Former Web3 Gaming Founders Raise $2.5M for NFT Marketplace Focused on User Retention

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The NFT market may be down significantly from its 2022 peak—sales volume is still 88% lower than all-time highs and 38% down year-to-date—but that hasn’t stopped innovators from building the next generation of digital ownership platforms. Enter Pallet Exchange, a new NFT marketplace with a bold mission: keep users engaged even when there’s no quick profit to be made.

Backed by a $2.5 million private funding round led by top-tier investors including Spartan Group, Symbolic Capital, and Cypher Capital—with angel participation from executives at Coinbase and MoonPay—Pallet is redefining what an NFT platform can be. Unlike most marketplaces built on Ethereum, Solana, or Bitcoin, Pallet has chosen an unexpected foundation: Sei, a high-performance layer-1 blockchain known for speed and low fees.

From Web3 Gaming to NFT Innovation

Pallet’s co-founders, Kelvin Wang and Davy Li, aren’t newcomers to the decentralized space. They previously launched The Beacon, one of the most popular web3 games on Arbitrum, where they first encountered the friction points plaguing current NFT ecosystems.

“We saw the gaming landscape and believed we could build something better,” Li explained. That experience became the catalyst for Pallet—not just as a trading hub, but as a community-driven platform designed for long-term user retention.

Their insight? People don’t just trade NFTs for profit—they collect, connect, and compete. “The fundamental draw to trade and flip is very human,” Wang said. “We’ve seen it with toys, cars, sneakers. NFTs are just the digital evolution of that instinct.”

But existing platforms often fail newcomers. Overloaded dashboards, complex interfaces, and financial jargon create steep entry barriers.

“Imagine dropping someone who’s never traded stocks into a Bloomberg terminal,” Li said. “That’s what most crypto marketplaces feel like.”

Redefining Engagement Beyond Financial Incentives

In bull markets, speculation drives activity. But in bear markets—when gains are slim and volatility reigns—platforms struggle to retain users. Pallet’s founders recognized this challenge early and made user engagement their north star.

Instead of relying solely on price appreciation to keep users active, Pallet integrates gamified social features that make collecting feel meaningful—even when the market isn’t booming.

👉 Discover how gamification is reshaping digital ownership and keeping users engaged long after the hype fades.

One standout feature is in-app messaging that connects holders of the same NFT collections. Buy an NFT? You’re automatically added to a group chat with fellow collectors.

“We want to create clans where friends can collaborate,” Li said. “We’re taking inspiration from live-service games and building systems more engaging than just loyalty points.”

This blend of social dynamics and game-like progression transforms passive ownership into active participation. Users aren’t just watching charts—they’re building relationships, sharing strategies, and unlocking shared experiences.

Why Build on Sei?

With Ethereum, Solana, and Bitcoin dominating NFT volume—over $1.3 billion in the last 30 days combined—why choose a less-established chain?

Speed and scalability.

Sei boasts 12,500 transactions per second and minimal gas fees, making it ideal for fast, low-cost NFT trades. More importantly, Sei is developing The Parallel Stack, a technology aimed at accelerating Ethereum-compatible (EVM) applications while reducing costs—a move that could attract a flood of developers.

Wang sees parallels between today’s Sei and early Solana: “We’re betting this will be the chain of the future. It offers something Solana couldn’t—native access to EVM liquidity in a seamless way.”

That strategic bet has already paid off.

Rapid Growth Despite Market Downturn

Launched in September, Pallet saw explosive growth by December—fueled by Seiyans, a meme-powered NFT collection that became a cultural moment in the Sei ecosystem.

Seiyans aren’t just digital art—they’re community badges, conversation starters, and status symbols within Pallet’s growing network. Their success catapulted Pallet into the spotlight, driving massive user influx.

Today, Pallet holds 99% of the NFT market share on Sei, with over $20 million in trading volume year-to-date. The platform has welcomed 2 million visitors in the past year and averages 40,000 to 50,000 daily users.

Monetization is straightforward: a 2% transaction fee generates an annual run rate of $2 million or more—a strong signal of sustainable demand.

👉 See how emerging blockchains are creating new opportunities for creators and collectors alike.

Expanding Into Art and Creator-Centric Markets

While PFPs (profile pictures) like Bored Apes sparked the NFT boom, Wang believes the next wave will belong to authentic digital art and creator-driven experiences.

“There’s growing interest in art NFTs—not just meme collections,” he said. “We don’t want to put a one-of-one artist in the same feed as mass-produced PFPs. They deserve unique spaces.”

Pallet plans to launch a dedicated marketplace for artists, offering tailored tools, curation support, and enhanced discovery features. The goal? Elevate digital art beyond speculation and into cultural relevance.

Frequently Asked Questions (FAQ)

Q: What makes Pallet different from other NFT marketplaces?
A: Pallet combines speed (via Sei blockchain), low fees, and deep social integration. Instead of focusing only on trading, it emphasizes community, gamification, and user progress—even when prices aren’t rising.

Q: How does Pallet retain users during bear markets?
A: Through gamified social features like group chats, collaborative clans, and activity-based rewards. These elements keep users engaged beyond financial incentives.

Q: Why did Pallet choose Sei over Ethereum or Solana?
A: Sei offers superior speed (12,500 TPS), low transaction costs, and upcoming EVM compatibility via The Parallel Stack—making it ideal for scalable, user-friendly NFT trading.

Q: Is Pallet only for experienced crypto users?
A: No. Pallet is designed for “normies”—everyday users unfamiliar with crypto. Its clean interface and social-first approach lower the barrier to entry.

Q: How does Pallet make money?
A: It charges a 2% fee on all transactions, generating a projected annual revenue of $2 million or more based on current volume.

Q: Will Pallet support other blockchains in the future?
A: While currently focused on Sei, expansion to other chains is possible as part of long-term growth strategy—especially those aligned with speed, affordability, and EVM compatibility.

Core Keywords

With a foundation built on speed, simplicity, and social connection, Pallet Exchange isn’t just chasing trends—it’s shaping the future of digital ownership. As the NFT space matures beyond speculative frenzy, platforms that prioritize meaningful engagement will lead the next chapter.

👉 Explore how the future of NFTs is being rewritten—where community matters more than cashouts.