The OpenSea project started when the very idea that a crypto image could be sold for a high price seemed crazy. Especially during the financial winter, when crypto-assets fell in price dramatically and for a long time. How to survive and become an industry leader — let’s look at the example of OpenSea.
Non-fungible tokens seem to have changed the crypto market. This is evidenced by the outflow of capital from DeFi, which may indicate the growth of investor confidence in the NFT. This is the preliminary conclusion analysts draw from the explosive jump in capitalization of the NFT token market during 2021. While in the first half of the year the total capitalization of this market showed an increase of about 18,000%, compared with 2020, the indicators of the third quarter have already approached 30,000% and amounted to more than 10 billion dollars.
The hype around images
A few years ago, the idea that a profile picture could be worth a lot of money was perplexing, and the hype around the legendary CryptoKitties provoked laughter. However, putting emotions aside, market participants couldn’t help but notice that NFT isn’t just a picture.
This is a unique digital object of the crypto world, the reliability of which is ensured by blockchain technology. Owning this painting, accordingly, carries the same perspectives as owning works of art. This ownership is both an investment and a status. Exactly what the rich and powerful need.
The history of the NFT marketplace is inextricably linked to that of the main marketplace, which carried this initially fragile industry on its shoulders through the crypto winter of 2018 and is now unequivocally leading the market. To date, 97% of NFT tokens on the Ethereum blockchain are sold on the OpenSea platform.
The OpenSea platform emerged in 2017 through the efforts of programmers Devin Finzer and Alex Atallah. The project was inspired by a window of opportunity that suddenly opened up to the digital world thanks to that very game CryptoKitties. Even then, in 2017, CryptoKitty alone once fetched more than $100,000, clearly signaling the birth of a new trend.
How to Survive Winter
OpenSea was launched on February 13, 2018, as a marketplace for creating, buying and selling NFTs.
In the very beginning, the project attracted $2 million of investment, their main competitor at that time was Rare Bits — 6. OpenSea took a commission of 1% of transaction amount (now it is about 2.5%), while the competitors worked almost without commission and refunded gas costs. Rare Bits first targeted a trusted public, collectors of sports paraphernalia, then it continued to expand, increasing its catalog.
Devin Fizner and Alex Atallah didn’t force the issue, focusing on the user experience and refining the functionality. Back then, in 2018, OpenSea’s tenacity and perfectionism could cause confusion — the NFT market was growing slowly, and besides, the crypto winter was coming.
The reserve provided by transaction fees allowed OpenSea to stay in the stormy ocean, meanwhile the platform’s convenience and intriguing content guaranteed the marketplace’s popularity regardless of the market’s weather. By the time of the thaw, and then by the start of the NFT boom in 2020, the company had become the undisputed leader in its market segment. Rare Bits did not survive the winter. RIP.
User tolerance and cross-project flexibility
A wide and high-quality assortment, an impressive client base, location on multiple blockchains, but most importantly — the simplicity and ease of use, when an intuitive user experience opens up access to the full potential of the platform, were the advantages that defined OpenSea leadership in the market.
The OpenSea protocol supports Ethereum, Polygon and Klaytn Blockchain. This made it possible to reduce the transaction costs associated with the legendary high cost of Ether transactions — the user can simply choose another blockchain. Classic NFT tokens created during CryptoKitties are used: ERC-721 — for single items, ERC-1155 — for collections.
To buy NFT on the platform, you do not need to be verified, just connect your wallet. OpenSea is compatible with several of them, and, of course, with MetaMask. When purchasing a token, the user can easily see the seller’s reliability rating, information about the token itself and its previous owners.
It is possible to buy NFT tokens on the platform for any ERC-20 tokens or with a bank card through the MoonPay service. Here you can also create your own tokens, but you will have to pay for transaction gas on the first transaction.
NFTs on the OpenSea platform fall into several categories, and are not just pictures. It can also be audio files, videos — in fact, any digital object.
This is because OpenSea is not so much a gallery as it is a list aggregator. As a result, you can trade products from any source here that more centralized platforms cannot afford. Consequently, you cannot trade SuperRare NFT tokens on the Foundation platform or Foundation-NFT tokens on SuperRare, but you can trade both on OpenSea.
At the moment, OpenSea is the undisputed market leader, and the market itself is an intriguing new reality of the crypto industry. While regulators are puzzling over whether to classify NFTs as stocks, bonds, real estate or works of art, the open and undiscovered ocean of opportunities is attracting more and more travelers.