Occupy 97% of the transaction share Learn about NFT trading platform Opensea

NFT, one of the products of blockchain. Blockchain is a technology that highly respects decentralization. However, recently, users have launched a call because of their dissatisfaction with the centralization of the NFT market, drawing people’s attention to the centralization of the NFT market. The NFT market now accounts for 97% of the transaction share on the Opensea platform.

Who is Opensea?

OpenSea is an online marketplace for NFTs. Opensea was founded by Devin Finzer and Alex Atallah on December 20, 2017 in New York. Users can generate NFTs for free on OpenSea and offer them for direct purchases or auctions. OpenSea is primarily based on the Ethereum ERC-721 standard and Polygon (a layer 2 scaling solution for Ethereum).

OpenSea went through Y Combinator’s seed round in 2018. In November 2019, OpenSea raised $2.1 million in venture capital (primarily from Animoca Brands). In March 2021, OpenSea raised another $23 million in venture capital (primarily from A16z Capital). In July 2021, OpenSea announced another $100 million funding round.

OpenSea had $95 million in revenue in February 2021, $147 million in March, and $2.75 billion in September. In September 2021, OpenSea released its own mobile apps for Android and iOS. In January 2022, OpenSea raised a $300 million funding round (led by Paradigm and Coatue Management) at a valuation of $13.3 billion.

OpenSea co-founder and CEO Devin Finzer said the newly raised funds will be used to improve customer support and security, invest in the wider NFT and web3 community, as well as recruiting and product development. OpenSea is committed to expanding the entire NFT ecosystem. OpenSea will launch a grants program with an opportunity to directly support the developers, builders and creators shaping the future of NFTs. OpenSea’s goal is to facilitate the scale and growth of the wider NFT ecosystem, including raising the profile of emerging creators and investing in the people who shape the NFT space for the better.

Additionally, the funds raised will help OpenSea fend off new competitors in the NFT market. For example, Coinbase is preparing to launch its own NFT marketplace; FTX has an NFT marketplace up and running.

Opensea’s fundraising has also set out four areas for future efforts, namely, accelerating product development, significantly improving customer experience and customer asset security, investing in the wider NFT and Web3 project community, and growing the team.

The first is to accelerate the development of related products. In the future, Opensea will focus on continuing to abstract the functions of blockchain complexity and simplify the process to lower the entry barrier for NFTs. In addition, Opensea will also accelerate the development of functions to support other blockchains in the future. They will also continue to develop better tools to help people analyze, demonstrate, manage and showcase their NFTs.

The second is to significantly improve the customer experience and the safety of customers’ assets. With the price of NFT assets skyrocketing, how to prevent hackers has become a problem. Opensea revealed that it will actively develop the trustworthiness, security and stability of the platform in the future, and relevant teams will continue to recruit to ensure the security of customers’ assets.

The last step is to make related investments. Opensea will launch plans in the future to directly support developers, builders and creators who shape the future of the NFT space, and ultimately make the entire NFT ecosystem more complete.

The rise of OpenSea

On November 28, 2017, the CryptoKitties project was officially launched. Because of the digital cat, it has attracted the interest of many people. At that time, one of the CryptoKitties named Genesis was sold at a price of 247 ETH, which was about 118,000 US dollars (about 752,100 yuan) at the time, and 780,000 US dollars (about 4.97 million yuan according to the current price of ETH). Yuan).

Occupy 97% of the transaction share Learn about NFT trading platform Opensea

Genesis NFTs

Seeing the sales of NFTs and the meteoric rise of NFTs, Devin Finzer decided to create a trading platform for these assets. From this was born Opensea.

OpenSea may seem like a simple platform or product. After all, it’s just a marketplace for NFTs. And it can have such a large share today because of the way its platform is built and how it is managed.

The easy-to-use listing feature, powerful filters, and a wide range of NFT project assets on the OpenSea platform have contributed to its dominance in the NFT market. Creators can launch NFTs on OpenSea with just a few clicks. Simplifying the process of NFT minting has made the threshold for people to enter NFT much lower, further expanding the audience and participants of the NFT market.

Although some platforms such as Foundation, KnownOrigin, Nifty Gateway, Rarible, SuperRare and Zora are similar NFT trading platforms in the same period, OpenSea’s approachable operation and low threshold are the main reasons for its popularity. In the first week of September 2021, the OpenSea platform facilitated more than $600 million in transactions, according to DappRadar; while SuperRare saw $6 million in transaction volume.

In addition, Opensea also supports many NFT projects. For example, NFTs found on the Foundation platform may not be able to be found and traded on the SuperRare platform, while Opensea supports the vast majority of NFT projects.

Today, Opensea almost occupies more than 97% of the NFT trading market share. This level of control is rare in industries other than the digital world. Although NFT is a blockchain – a product that promotes decentralized technology. However, the NFT market is actually not decentralized, and Opensea has become the center of today’s NFT market.

Occupy 97% of the transaction share Learn about NFT trading platform Opensea

Share of NFT transactions on each platform

Source: Dune Analytics

increasingly fierce market

Recently, with the rapid growth of the NFT market, many Crypto exchanges have also launched their own NFT markets. For example, three of the top five centralized Cyrpto exchanges have launched their own NFT marketplaces, Coinbase launched its NFT platform in mid-October 2021, and FTX also launched its own NFT marketplace in mid-October. Many established and emerging players are entering the space, and competition is intensifying, which could cause OpenSea to lose some market share.

Additionally, OpenSea competitor Rarible (NFT trading platform) has launched a new feature that enables artists to mint NFTs for free. NFT minting requires a fee (cost), and with the rise of NFT, its cost is rising, which in turn becomes a barrier for people to enter the NFT market. Rarible’s free NFT minting service will attract more and more NFT minters, and it is likely to become the first choice for artists in the future.

To trade NFT on OpenSea, in addition to the price of the NFT itself, the buyer needs to bear the gas fee of the Ethereum network and the fixed fee of 2.5% of the platform. Today, many platforms do not charge any fees, except for the price of NFT itself and the gas fee of the Ethereum network. These factors may become obstacles to the future development of OpenSea.

Finally, OpenSea does not support other popular blockchains such as Solana, Cardano and Tezos, except Ethereum. Solana, for example, has grown in popularity over the past year, making it the blockchain network of choice for many crypto traders. While many other blockchain networks feature low or even zero gas transaction fees, these will attract more users. And Opensea’s lack of support for other popular blockchains may weaken Opensea’s dominance and allow other platforms to take advantage.

However, other platforms have opportunities but will only turn one center into multiple centers. In fact, many NFT projects are mastered on these platforms, and the decentralization of NFT in the future may only become more and more slim.

outrage

OpenSea is a completely centralized platform and does not issue Tokens to distribute governance in its community. This move actually violates the idea of ​​decentralization in the blockchain. Many exchanges or platforms now issue their own Tokens to allow users to allocate governance, which may gradually weaken OpenSea’s dominance in the NFT market.

The recent gaffes made by OpenSea on the show even made the currency circle issue tokens for Opensea on their own. The full name of the project is Save Opensea. The price of this coin has doubled 50 times within 24 hours of its launch, and the number of coin holders exceeds 200,000. Its code name is SOS . The purpose of its establishment is to claim to replace Opensea to give back to the community. In short, Opensea is an organization that will issue tokens for you if you don’t issue tokens.

Earlier, Opensea’s CFO (Chief Financial Officer) Brian Roberts said in an interview with Bloomberg: He has seen many companies’ income statements, but he has never seen such an income statement like Opensea. When the company is growing so fast, you would be very stupid if you didn’t consider going public. The secondary market will be very optimistic about the company with this growth rate. There is nothing wrong with this statement in any other industry, but it is not recognized in the blockchain world that advocates decentralization. Going public and taking the old road of the web 2 era is considered to be against the “blockchain spirit” of web 3 users. After Opensea went public, many retail investors ended up being chauffeurs who could only take orders for big institutions in the secondary market.

After this remark was published, Opensea’s CFO quickly came out to clarify that Opensea has no plans to conduct an IPO for the time being. If you want to IPO in the future, you will also find a way to bring community members together. Although it was clarified, it did not stop the anger of American blockchain users, so Save Opensea was born. In less than two days, the SOS airdrop was received by 200,000 people. According to Uniswap data, the 24-hour transaction volume of SOS was as high as 157 million US dollars (about 1 billion yuan).

Occupy 97% of the transaction share Learn about NFT trading platform Opensea

SOS price trend

Source: Coingecko

The official website of Save Opensea states that the purpose of this project is to give back to all NFT creators, collectors and community members who have contributed to the development of the entire NFT ecosystem. The Save Opensea project party will issue Tokens to all users who have traded on the Opensea platform based on the open source data provided by Opensea. The amount that can be received is determined by the total number of transactions and consumption amount that the user has made in Opensea. The total number of SOS is 100 trillion, of which 50% will be used for airdrop rewards, 20% for staking rewards, 20% for the governance and maintenance of the DAO organization, and 10% for liquidity mining rewards.

Opensea was established in 2017, and has experienced a four-year-old bear market in the currency circle. Many projects closed or went bankrupt during this period. Opensea has been working silently for a few years, and now it has a dominant position in the NFT market. However, as a result of the hard work, a DAO that was established for a few days was able to snatch away the fruits of victory. This incident is bound to make Opensea re-examine its decision not to issue Token and to want to go public in an IPO.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/occupy-97-of-the-transaction-share-learn-about-nft-trading-platform-opensea/
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