What is OpenSea?
The Digital Art Marketplace for NFT’s
What is OpenSea? To some people, NFTs are pretty Alien. They’re Non Fungible Tokens, digital art goods that are uniquely identifiable, authenticated through the blockchain, scarce but perhaps most important of all, tradeable. In 2017, the launch of CryptoKitties gave birth to NFTs and whilst they were a bit of a novelty, it changed the way in which we interact with digital items. It’s changed quite dramatically over the last 4 years as we now see digital artwork, videos and virtual real estate change hands for hundreds of thousands of dollars, if not millions.
The Digital Art Marketplace
Think Cryptopunks, the Bored Ape Yacht club, Beeple, these names are now synonymous with some of the most expensive digital artwork and in today’s video, we’re exploring the world’s first and largest digital art marketplace for NFTs, OpenSea.
Perhaps well timed, or well executed, OpenSea is now the major marketplace for buying, selling and exchanging NFTs and in August alone, OpenSea recorded $3.3bn in digital merchandise transaction volumes on Ethereum, more than 10 times what was sold in July and the growth has been insane. But What is OpenSea, How does OpenSea Make money and how did OpenSea become THE NFT Marketplace? Here’s how it happened. Unlike Physical goods, NFTs are armed with the programmability of digital assets which can then be exchanged on OpenSea.
But What is OpenSea? OpenSea is the largest general marketplace for User-owned digital items supporting multiple blockchains, with the broadest set of categories and the best prices for new emerging asset classes.
What is OpeaSea
People can buy or sell NFTs on the platform, with OpenSea.io making their money through a 2.5% fee on the sale price, which they regard as one of the lowest in the industry without any buyers fees. OpenSea was founded in 2018 by Alex Atallah and Devin Finzer, who took inspiration from CryptoKitties success on the market.
The pair spent time on Discord servers, chatting to users and launched the beta version of OpenSea in December 2017 with the duo believing they ‘could create an Amazon or eBay for all of these new NFTs”. They enrolled in Y Combinators startup accelerator programme and founded OpenSea.io together. Following the initial $120k investment from Y Combinator, OpenSea have raised an impressive $130mn since then, with Andreessen Horowitz investing heavily and there’s been interest from well known celebs like Tim Ferris, Ashton Kutcher and Mark Cuban too. OpenSea now has a valuation of $1.5bn. They plan to use this new capital to scale the platform, hiring engineering talent, cross Blockchain support and expanding to new markets.
OpenSea now supports multiple blockchains, such as Polygon and Ethereum, and will announce support for Flow and Tezos in the near future, having previously been restricted to Ethereum which used a lot of computing power and wasted energy. Polygon stops insanely high transaction fees related to computer usage in a bid to make the marketplace more accessible. The mission behind the platform stems from new economies that may arise from cryptocurrencies.
Part of that allows for a minimal trust operation as the buyers and sellers don’t have to trust that the other party will behave themselves. That’s because the transactions rely on technology and smart contracts, not reputation or third parties.
Their atomic transaction system means that the either the whole deal happens or it doesn’t. Unlike with eBay, where the buyer has to pay the seller before they ship the goods, if the deal goes sour for any reason it’s like it never happened and neither person is left in the mud. To accomplish this, OpenSea uses the Wyvern Protocol, a suite of smart contracts that are audited and tested in the real world.
It allows users to swap state changes like NFT Ownership State for Crypto ownership state, allowing the seller to transfer the NFT to the buyer instantly. The CEO, Devin Finzer believes that we’re experiencing one of the biggest fundamental changes in the internet economy and he’s proud to be leading it for a while. OpenSea are selling hundreds of millions of $ per month on their marketplace and big social media names like Gary See and Logan Paul are continuing to push the NFT message, only attracting more support to the marketplace. Not only that, but the increased demand and attention drives up the prices of Ether and Solana.
At the end of the day, Finzer and Atallah have created the first and largest NFT marketplace and their success will be determined by mr market.
But even so, they take a slice of every transaction that takes place. What do you think of OpenSea? What do you think of NFTs? Do you own them? Do you think they’re smart or stupid?
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Read More: How to Sell NFT Crypto Art on Rarible (2021)