Most people know GameStop from the diverse range of video games, or the commotion the company’s stock has caused. However, GameStop has also discovered the world of blockchains and cryptocurrencies! As a result, the GameStop NFT marketplace has become a fact.via this marketplace non-fungible tokens!
The video game giant has thousands of brick-and-mortar stores, but now also makes it possible to blockchain complete transactions
More and more companies are seeing the benefits of blockchain technology and are trying to apply this technology within their company. Large companies, such as Samsung and Microsoft, have been using blockchain technology.
With GameStop, another big name has entered the list of companies. Would you like to know more about GameStop? Or are you curious about the video game giant’s marketplace? You will discover it in this article!
What is GameStop?
Video game retailer GameStop’s highly anticipated Ethereum NFT marketplace has finally gone live in its beta version on July 11. This marketplace release coincides with expected deadlines, as the company previously stated that the release date would be towards the end of the second quarter of the fiscal year 2022. At the end of last year, speculation started that GameStop, which was once a go-to for video games and consoles, then a meme investment, had finally evolved into its third form, which is an NFT marketplace.
By the end of 2021, speculations had given way to confirmation, and as the new year kicked in, the company began shifting its workforce and hiring new team members with a focus on blockchain gaming, e-commerce, and technology. GameStop chairman Ryan Cohen has made an effort to broaden the company’s offerings of digital services and online products to turn the struggling video game retailer around.
The Famous GameStop short squeeze
Quite a few professional mutual funds had taken large short positions against GameStop. With often openly scornful comments about the company, and that the share price at $ 20 was far too high.
That was against the sore leg of ‘GameStop believers’ on the internet platform Reddit. This is a site where visitors can talk to each other about anything and everything. For example, there is the WallStreetBets group on Reddit, where private traders exchange investment tips with each other.
That’s where the idea arose to smoke out shorters by buying organized shares and call options GameStop. The number of GameStop shares in circulation is small, so even if a limited group buys those shares, the price still rises considerably. The Reddit traders also stocked up on stock options to push the price up. The seller of an option is obliged to hold shares as a collateral obligation. The higher the share price, the more shares the option seller has to buy. So this became a self-reinforcing effect.
Due to the action on Reddit, GameStop’s price rose further and further. Extremely bad news for the shorter, because he sees his loss increase. In order not to incur even greater losses, the shorter must at some point buy shares to close his position. But that drives up the price even further.
The ‘short positions’ were large, hence the price increase of thousands of percent. This short squeeze led to huge losses at the hedge fund Melvin Capital, for example. It had to raise more than 2 billion euros in capital to survive, which led to glee. Surprisingly, Melvin Capital managed to handle the situation cleverly, making the same month the most profitable month!
GameStop NFT Marketplace
This NFT Marketplace is described by her company GameStop as “a non-custodial, Ethereum Layer 2 based Marketplace that enables parties to truly own their digital assets represented and secured on the blockchain.” The Marketplace is specifically built on Loopring, a Layer 2 scaling solution.
Loopring makes the GameStop wallet a lot cheaper and more efficient than the wallets based on the Layer 1 Ethereum mainnet. Users can connect a variety of crypto wallets to it, including the company’s own GameStop wallet. In addition, these NFTs can also be transferred between collectors and can even be re-traded on other marketplaces.
