Reservoir, which provides NFT infrastructure for Coinbase and MetaMask, raises $14 million

NFTs were a defining theme in the cryptocurrency market between 2020 and 2022, but sales have declined in recent years.

Reservoir, a provider of non-redeemable token (NFT) infrastructure for Coinbase, MetaMask, and Magic Eden, has closed a $14 million round of funding to expand its infrastructure to new markets.

According to an announcement published on February 5, this Series A round was led by Union Square Ventures (USV), a technology-focused venture capital firm based in New York. USV is an early investor in companies such as Polygon, Dune Analytics, Matter Labs, Arweave, Dapper Labs, and Algorand.

Other investors in this Series A round include Variant, Archetype, and Square Peg Capital.

The funds will be used to expand Reservoir's infrastructure to enable more networks to integrate NFT transactions. This includes providing token images and data indexing tools, as well as tools for interacting with decentralized exchanges and NFT marketplaces.

Jason Maier, co-founder and COO of Reservoir, told Cointelegraph that while blockchain enables digital ownership, the tools needed to trade tokens on-chain “are not available out of the box on blockchain.”

“Creating a unified marketplace for NFTs (and tokens as a whole) requires strong token indexing, aggregating token liquidity on the market, and interfacing with decentralized exchanges,” Maier said. “These APIs and developer tools are exactly what teams like Coinbase, MetaMask, and Magic Eden use.”

The NFT Bubble Burst and What’s Next

NFTs were arguably the most defining theme of the last crypto bull run, which peaked in 2021. The momentum continued into 2022, when NFT sales reached an all-time high of $57.2 billion, according to DappRadar.

However, the market has fallen sharply in recent years, with both NFT trading volume and sales in 2024 being the lowest since 2020.

Maier attributed the market volatility to the bursting of the "NFT bubble," which followed a highly speculative phase of market mania.

"At the end of the day, an NFT is just a token that is unique, and we remain very excited about how NFTs can revolutionize digital ownership," Maier said, adding:

"While some of the mainstream focus on crypto has shifted, we continue to be impressed by the range of compelling use cases, from collectibles to art to [real-world assets]."

Despite the volatility, the NFT market has begun to show signs of life again. 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 series, acquired tokenization platform Tokenproof.