The largest NFT marketplace
When it comes to NFT, OpenSea is the indisputable leader. With over a billion visitors per month and a market capitalization of $13.3 billion, the website is also the largest marketplace for non-fungible tokens in the world. The firm recently raised $300 million in new funding, valuing it at $13.3 billion.
But there have been some growing pains for the site as it has developed. A scandal over insider training, high-profile attacks on users, and bans on Iranian users may open the door for OpenSea’s many competitors to gain a piece of the NFT market, which is believed to be worth tens of billions of dollars, according to industry estimates.
On the business side, some of OpenSea’s competitors take a slightly different strategy. Cultivated art marketplaces such as Foundation and SuperRare make an effort to spotlight exclusive artists, whereas decentralized art marketplaces such as LooksRare and Rarible provide a portion of their payments to their users rather than retaining them for themselves.
If we look at social media data given by our parent business, Thinknum Alternative Data, Opensea not only has the most Twitter followers in the NFT industry, but it also has experienced the greatest growth over the previous six months when compared with competitors.
The business strategy of OpenSea is straightforward: the company retains a 2.5 percent cut of every NFT transaction that takes place on its platform. In the last month, the trade volume on Opensea reached approximately $2.5 billion, generating an estimated revenue of $62.5 million for the company – not bad for a company that hasn’t sold any physical assets or introduced any major new features.
In its current state, OpenSea operates on two blockchains: Ethereum, which is the most popular blockchain for buying and selling NFTs; and Polygon, which is a so-called “Layer 2” or “sidechain” system that operates on top of the Ethereum blockchain to allow for transactions with lower fees and faster transaction speeds. Additionally, support for Solana, an Ethereum competitor with its NFT ecosystem under development, is likely to be added to OpenSea.
For users who are unfamiliar with NFTs, the platform is also rather simple to understand, and it features a user interface that is both stylish and information-dense. Users can access their NFT collection on their profile page, which allows them to sell their NFT collection through auctions or direct listings. A large number of cryptocurrency wallets, including MetaMask and WalletConnect, as well as Coinbase Wallet and twelve others, are also supported by OpenSea.
In contrast to bitcoin and Web3 advocates who typically point to decentralization as one of their core principles, OpenSea can appear to be more like a Web2 corporation that is functioning in the Web3 world. In contrast to some marketplaces that distribute their fees back to users or give consumers the ability to vote on business choices, OpenSea functions more like a traditional technology corporation.
Accordingly, OpenSea will take steps to freeze assets when they are reported as stolen, and will not enable them to be purchased or sold as a result of this action. In these types of scenarios, truly decentralized networks tend to remain hands-off. Although OpenSea’s strategy is intended to safeguard victims in theory the policy results in naïve buyers being stuck with goods that they had no idea were stolen in the first place, according to the company.
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Other difficulties have arisen for OpenSea. A scandal involving insider trading forced the resignation of the company’s head of product, Nate Chastain. He was suspected of profiting by purchasing non-financial transactions (NFTs) from projects just before they were advertised on OpenSea’s website.
Following international restrictions, the platform recently barred Iranian users from accessing the marketplace, causing outrage within the platform’s Iranian artistic community. Despite its efforts, the site has struggled to keep plagiarism and copyright infringement off its marketplace, and it has found itself in the position of having to weigh the risks of acting as a consumer-friendly central authority against the benefits of catering to constituencies who would prefer to see it become more decentralized once more.