OpenSea is the first public NFT marketplace. OpenSea allows users to search, browse and buy NFTs in different categories. OpenSea was founded in 2017 by Devin Finzer and Alex Atallah. Popular NFT collections such as Bored Ape Yacht Club, Azuki and CryptoPunks are available for purchase on OpenSea.
Inspired by the CryptoKitties project, Devin Finzer and Alex Atallah co-founded OpenSea. Its beta version launched in December 2017. In January 2018 Ethereum proposed the ERC-721, which is the first standard for NFTs. At the same time Atallah and Finzer became part of the Winter 2018 batch of Y Combinator with their OpenSea. The platform was presented as an “Ebay for crypto assets”.
OpenSea is a marketplace for searching, browsing, trading and creating NFTs. NFTs in the following categories can be found on OpenSea: Art, Collectibles, Music, Domain Names, Photography, Sports, Trading Cards, Utility and Virtual Worlds. OpenSea supports Ethereum, Polygon, Klaytn and Solana in beta. More than 150 tokens are available on OpenSea, the main ones remain ETH/WETH, SOL, USDC and DAI.
To get full access to the platform’s functionality, the user needs to connect OpenSea with their crypto wallet. OpenSea supports 17 different crypto wallets in total, including Metamask, Coinbase and Trust Wallet.
OpenSea uses atomic transactions and the Wyvern Protocol, which guarantees compliance with all terms of the transaction between the seller and the buyer.
OpenSea has its own mobile app , where all of the platform's main features are introduced except for the purchase of NFTs.
Interface and Features
OpenSea offers several rankings of NFT collections by category, time and the blockchain. Also, information on the latest transactions is available in the “Activity” section. Trending collections can be found on the OpenSea main page.
Users can view the information on sales volume, number of items, number of owners, the minimum price for an item, the sales dynamics of a particular NFT collection.
On OpenSea, users can issue, or "mint", NFTs both within and outside the collection. OpenSea offers its users the so-called "lazy" minting, i.e. when an NFT is put on sale without a record on the blockchain and, therefore, does not require users to pay a provisional fee.
Users who mint and list their NFTs, might pay:
- A one-time entry fee for new users (for new wallets);
- if the NFT was minted on another platform;
- if it’s the first time the user utilizes the token on which the NFT is going to be issued.
OpenSea takes 2.5% fee of the total NFT price. When creating a collection, an author can set up the so-called "royalties". Royalties are a fee received by an NFT original author each time it is being resold. The maximum royalty on OpenSea is 10%.
NFTs can be sold both for a fixed price and at an auction.
OpenSea supports English and Dutch auction mechanisms.
In an English auction, NFT goes to the user who bid the highest. The seller puts NFTs on sale for a fixed amount of time. In case of an unplanned delisting, i.e. withdrawal of NFTs from sale, OpenSea makes the seller pay fees. In an English auction, the seller sets an initial price and the minimum price of the item being sold. If a bid takes place 10 or less minutes before the end of auction, the auction will be extended another 10 minutes. In an English auction users pay with “wrapped Ethereum” (WETH) tokens. A wrapped Ethereum allows users to make pre-authorized bids that can be fulfilled later. There is a fee for “wrapping” an Ethereum.
In a Dutch auction, prices start high and then drop progressively until a bidder accepts the going price. The first one to bid gets the NFT. In this type of auction users pay with regular Ethereum since there is no need for delayed transactions.
OpenSea has been criticized for its security flaws and cases of fraud on its platform.
In January 2022, several services that rely on OpenSea’s API, including Metamask, stopped displaying NFTs. In February 2022, OpenSea users lost $1.7 million in NFTs to a phishing attack. Among items stolen are those from the Bored Ape Yacht Club and the Decentraland collections.
In September 2021, Nate Chastain, then the product manager of OpenSea, was accused of taking advantage of the company's inside information to profit from trading NFTs. Chastain was fired, and OpenSea management banned insider trading on the platform.
In January 2020, OpenSea made a total of $65,000, in January 2021, it was $615,000 . 2021 has been a turning point for OpenSea. In February 2021, Andreessen Horowitz General Partner Kathryn Haun joined OpenSea. In less than a year, OpenSea raised $423 million in three funding rounds. By January 2022, OpenSea is valued at $13.3 billion.
On September 17, 2021, OpenSea introduces its mobile app , where all of the platform's main features are introduced except for the purchase of NFTs. This is due to the fact that Apple, Google and other mobile app platforms do not support ETH as a payment method. Also, there may have been a divergence of interest between platforms regarding fees.
In February 2022, OpenSea and CoinTracker launched a program helping users with declaring taxes. In April 2022, OpenSea announced integration with Solana in beta.