NFT sales exploded in 2021. According to reports, sales went from $95 million to $25 billion in 2021. Non-fungible tokens were truly in vogue. And, OpenSea was at the heart of the phenomenon throughout, as the world’s largest NFT marketplace.
OpenSea didn’t just jump on the bandwagon. It was among the few that spotted the trend. The platform was started in 2017. It sold NFTs worth $20 billion. More than one million traders have been involved with the platform.
In this review, we will look objectively at the pros and cons of the platform. Our OpenSea review should help you better understand it, know how you could profit from NFTs, and anticipate the future of the crypto space.
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In this guide:
- What is OpenSea?
- OpenSea’s beginnings
- How does OpenSea work?
- What cryptocurrencies are accepted on OpenSea?
- What sets OpenSea apart?
- Advantages of OpenSea
- Other advantages of using OpenSea
- Disadvantages of OpenSea
- Supported wallets
- NFTs supported by OpenSea
- How to use
- OpenSea: a good entry point
- Frequently asked questions
What is OpenSea?
In 2017, entrepreneurs Devin Finzer and Alex Atallah created the OpenSea marketplace. They relocated to New York to run the business. This startup acted as a pioneer in the NFT space, which really took off in early 2021. The trend has shown no signs of stopping.
Both men had experience working in the tech world. Devin Finzer was born in the Bay Area and studied at Brown University. He then took a job at Pinterest as a software engineer. He co-founded the Claimdog search engine in 2015. Credit Karma purchased it for an undisclosed amount shortly after its release.
Alex Attalah studied at Stanford University. He worked for Silicon Valley startups Zugata and Whatsgoodly after graduating.
OpenSea’s beginnings
Finzer and Attalah first teamed up at the tail end of 2017. Their initial idea for a startup was much different from what it would become. The company they envisioned would pay crypto to users in exchange for using their Wi-Fi hotspots.
Around that time, CryptoKitties — the Ethereum-based NFT game — started garnering attention. Finzer and Attalah learned of it, and they used their partnership to create a marketplace, precisely, for the trading of digital tokens.
Their concept paid off. By 2021’s NFT boom, OpenSea was the largest platform of its kind.
In 2022, the company, still owned by Finzer and Attalah, announced it had raised another $300 million in venture capital. The platform is now evaluated to be worth a staggering $13.3 billion. In fact, more than $3 billion was poured into NFT companies last year alone. OpenSea may be leading the trend. However, it is, undoubtedly, a profitable market for many of the companies and individuals involved.
How does OpenSea work?
OpenSea, as discussed, is an NFT marketplace. Here, the website’s registered users can buy and sell digital assets with crypto or with fiat. The peer-to-peer marketplace lists some of the most famous NFT collections. Consequently, some of the largest sales in the NFT space have occurred using OpenSea.
But, just what are these NFTs?
Non-fungible tokens (NFTs) are unique assets on the blockchain. They cannot be replaced by any other asset, unlike bitcoin, where 1 BTC is the same as any other 1 BTC. NFTs can be traded and sold, and any digital item can become one. So far, the majority of high-profile buyers have been drawn to digital art.
OpenSea uses smart contract technology to buy and sell unique NFTs. Smart contracts enable users to secure the custody of their NFT collection on the platform. They also provide security for the creator. The platform uses ERC721 & ERC1155 standards to verify that NFT collectors own the assets they list on the marketplace.
OpenSea uses the Ethereum blockchain. To buy or sell NFTs, you will need an Ethereum wallet such as MetaMask, TrustWallet, and Coinbase. To purchase or sell NFTs, users need to connect to their cryptocurrency wallets.
OpenSea users have over 150 payment options to choose from and allows them to select from over 34 million NFTs.
What cryptocurrencies are accepted on OpenSea?
Platforms like OpenSea have catered to both experienced and new crypto users. NFT sales, in particular, have attracted new people into the world of crypto. Convenience is important. Issues with the difficulty of purchasing crypto are made a thing of the past. Platforms like this one have contributed to this.
Currently, OpensSea supports over 150 cryptocurrencies. The main currencies used on the platform are Ethereum (ETH)/WETH, USDC, and DAI. OpenSea also offers cross-blockchain support on Polygon, Klaytn, and, of course, Ethereum.
To take part in auctions on the platform, you will need WETH.
But, just what is WETH?
Wrapped ETH (or WETH) refers to an ERC-20-compatible version of ethereum. If you already have ETH in your OpenSea wallet, you will be able to convert it directly from the wallet to WETH.
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To start trading NFTs on OpenSea, you will need two things. First, make sure that you have a crypto wallet. Next, you need to have an account on a cryptocurrency exchange (such as Coinbase, or Binance).
OpenSea now allows users to convert crypto to their local currency when engaging in trades on the platform. It is not possible, however, to use fiat directly for purchases on OpenSea.
Ether will be the most commonly used currency needed on OpenSea. ETH will be required to pay various fees. Users can add the currency directly into their OpenSea wallet. To do this, they have the option to deposit from an exchange or buy directly with their credit card.
What sets OpenSea apart?
There are a number of OpenSea features that help it stand out from the pack. This, together with good timing, are responsible for the platform’s dominance as an NFT marketplace. Let’s take a quick look at some of the distinguishable features.
Users control their NFT assets
OpenSea uses smart contract technology to make transactions. This means that the website does not need to have custody of your collectibles. Instead, your collectibles are stored in an Ethereum wallet connected to OpenSea. Because of this, you are not simply handing over your assets. The platform acts as an intermediary for your trades.
Furthermore, OpenSea doesn’t require creating an account. Users simply connect their wallets, such as MetaMask. They also have the option to fill out their profile, where their collected NFTs will show up. The site, however, does not require personal information.
Variety of NFTs and use of Ethereum tokens
OpenSea offers over 200 digital assets in its portfolio and more than 4 million NFTs via its website. These NFTs can be bought and sold with Ethereum tokens such as DAI.
OpenSea boasts over 1.26 million users, 2,000,000 collections, and more than 80 million NFTs. It supports cross-blockchain support across the Ethereum, Polygon, and Klatyn networks.
In fact, variety and volume are OpenSea’s biggest selling points. OpenSea has hosted nearly every NFT-related project since late 2017, when the first NFT standards emerged. The NFT market is valued at between $2 million and $3 million USD per month. According to the OpenSea platform, an average user has sold $1178 worth of NFTs.
It hosts different types and genres of NFTs
OpenSea caters to all types of NFT categories. In recent times, marketplaces have emerged that focus solely on one category. On OpenSea, however, users are able to purchase NFTs that feature art, assets used in virtual worlds, sport trading cards, game items, utility tokens, and even domain names.
Art NFTs are, by far, the most popular at the moment. These represent images, gifs, or videos that are digitized on the blockchain.
Relatively low fees
OpenSea boasts of having a simple model of charging fees. The platform charges 2.5% on all transactions that occur on the platform.
OpenSea offers its marketplace free of charge. It’s completely free to set up a marketplace or use our platform. OpenSea charges a 2.5% service charge on all sales and a 10% royalty to the original NFT creator.
The bottom line is that the marketplace remains convenient to use. The platform charges some of the lowest fees for NFTs, overall.
It is also easy to create an NFT. You can mint an NFT by using OpenSea’s minting tool. It is easy to start your own NFT collection with no knowledge of blockchain or programming. This service is also free, while many competitors charge fees for creating NFTs.
Advantages of OpenSea
Anonymous purchases
OpenSea fosters crypto’s general tenet of semi-anonymity. The marketplace doesn’t require you to create an account. All you have to do is to connect your crypto wallet. This means that, effectively, you are not sharing your info when selling or buying NFTs.
However, it should be noted that OpenSea states that it may collect your personal data. The platform says it does this to improve its service. They may also collect the blockchain address used on the site. When making transactions, however, that information should be hidden from other buyers.
Over 200 payment options
OpenSea sells digital items on the blockchain. Therefore, transactions are usually done using cryptocurrencies. OpenSea supports over 200 funding options, with Ether being the most popular method of payment.
Only cryptocurrency payments are accepted by the platform. The platform allows secondary sales. There are several payment options available, including stablecoins, major currencies, or coins such as wBTC.
Essentially, all payments on the platform, including transaction fees and gas, are made using ETH.
A large number of collectibles
OpenSea currently lists over 20 million user-owned assets. While most NFT websites focus on a single niche, this platform lists multiple. Users can choose different options for listing their NFTs. These can be sold at an auction or at a fixed price. Artwork is the most popular category right now.
Also available for sale are collectibles, trading cards, and a variety of utility tokens. OpenSea hosts over 200 digital asset categories. The platform includes a ranking table that displays the top NFTs based on market cap. This is updated hourly.
Active community
Interest in NFTs has skyrocketed in the past year. OpenSea, as mentioned previously, is the largest NFT marketplace. The platform has a large and active community of users. In Jan., it was reported that OpenSea reached 1 million users. It now has a market capitalization of $13.3 billion.
The highest volume assets are CryptoPunks, and Bored Ape Yacht Club NFTs. The reputation of these NFTs has gone beyond the crypto community. In the past year, it has entered into pop culture. This has translated into hundreds of thousands of new users for OpenSea.
It comes with a mobile app
OpenSea launched its first app for Android and iOS in Sep. 2021. The app functions as a gallery. It allows users to browse artwork and share listings. The software allows you to view and manage your NFT collection.
The app is helpful in researching NFTs. Similar to industry rivals Rarible, OpenSea’s mobile app doesn’t allow for transactions at this time. The company, however, says that this is part of a broader plan. The ultimate goal is to further spread the use of NFTs.
Other advantages of using OpenSea
Recently launched zero gas fee program
The rise of NFTs meant that numerous new crypto users began showing their interest. The process of minting the digital assets was not always easy to follow. You would need to follow a few steps if you want to create NFTs. These were often lengthy and difficult. Gas fees were between $50 and $100. The more the Ethereum network was used, the more costly transactions became.
OpenSea has simplified the process by endorsing its zero gas fee program in 2021. The platform’s new collection manager makes it possible for creators to make NFTs with no upfront gas costs. The NFT is not transferred on-chain until the first transfer or purchase is made.
Established team of developers
As mentioned earlier, OpenSea’s team of developers already had a strong reputation when starting the project. Their personal biographies are known, and their profiles are on LinkedIn. The same has happened to their new additions to the team. Furthermore, the company received support from the startup accelerator Y Combinator. All of these are details that make a big difference in the crypto-world.
Disadvantages of OpenSea
No fiat support
In judging OpenSea’s potential, it’s important to get the full picture of the platform. This means also analyzing its downsides.
One of these is related to fiat payments. OpenSea does not currently support payments in conventional currencies such as USD or AUD. Although some features like profile customizations and direct fiat payments are not yet available, the platform promises they will soon be.
OpenSea has confirmed that it acquired Dharma Labs early in 2022. This is a deal that could allow the $13 billion cryptocurrency firm to expand its technological capabilities. Dharma, a pioneer in DeFi, wanted to create a seamless user interface for lending or swapping tokens. This could bridge the crypto and fiat worlds by allowing users to deposit fiat using their debit card and then swap tokens on Uniswap v3.
Centralization
There are also questions about OpenSea’s claim of decentralization. OpenSea is a centralized NFT exchange. In this way, it is similar to Coinbase. NFT projects host metadata and content centrally.
At the moment, there is no scalable NFT wallet. It is difficult to view your NFT information outside the platforms where they are sold. This is, however, a problem that may be resolved in the near future.
Previous exploitation by the management
In Sept. 2021, a high-ranking employee of the company resigned. The employee, believed to be called Nate Chastain, was accused of insider trading. According to OpenSea’s statements, the person in question would bid on NFTs that they knew would be featured on the site’s home page. The team has promised to take a stand against team members using confidential information for NFT purchases.
Security issues
We should also mention a recent NFT heist. A bug in the OpenSea NFT marketplace allowed hackers to steal rare NFTs for much less than the market value. They then resold them for large profits. The hackers pocketed over $1 million. Some believe that while OpenSea does an excellent job creating a user interface that is intuitive and secure, it does this at the expense of security.
Supported wallets
OpenSea works well with many crypto wallets. Some better suited to desktop use and others for mobile.
MetaMask is the most widely used wallet on OpenSea. MetaMask’s popularity among existing and new crypto users is because of interoperability to virtually all Ethereum-based platforms.
The full list of wallets compatible with the OpenSea platform are:
- MetaMask
- Coinbase Wallet
- TrustWallet
- Portis
- Fortmatic/Magic
- Venly
- Authereum
- Bitski
- Dapper
- Kaikas
- OperaTouch
- Torus
- WalletConnect
- WalletLink.
NFTs supported by OpenSea
There are two types of NFTs supported on OpenSea. The first are typical non-fungible assets. These are ERC-721 standard NFTs recorded on Ethereum and Polygon blockchains and the KIP17 standard NFT recorded on the Klaytn blockchain. The second is the semi-fungible asset, ERC-1155 standard NFTs on Ethereum or Polygon, and KIP37 on Klaytn.
In terms of categories, OpenSea caters to a large variety of NFTs. This sets it apart from many NFT marketplaces that focus on one particular niche. This characteristic has helped OpenSea. The large number of tokens sold on the platform is in part due to this.
Notable styles of NFTs include art, music NFTs, domain names, virtual world NFTs, trading cards, collectibles, utility tokens, or sport trading cards.
How to use
Buying and selling NFTs on OpenSea is a relatively simple task, regardless of crypto experience. This has been one of the factors that have determined the platform’s growth. Let’s take a look at the essential steps that you will need to take when first starting out.
- Buy Ethereum: To buy your NFTs, you’ll need ETH. Ensure that you have enough funds.
- Create your cryptocurrency wallet: OpenSea can support several web3 wallets. MetaMask is the most popular option.
- Send Ethereum to your wallet: Next, transfer your Ethereum into the wallet.
- Connect your wallet: OpenSea’s webpage has a section called “My Profile.” After accessing it, connect your wallet to the platform.
- Sign in to your wallet: After logging in, you will be taken to your profile page. You can edit it as often as you like before you make a purchase.
- Visit the “Marketplace”: Select the NFT category you want to browse from the “Marketplace.” Filter out the results to your liking.
- Buy NFTs: After you have selected the NFT of your liking, click “Buy Now.” The full price, including all fees, will be displayed to you. Next, click “Checkout.” Approve the transaction in your wallet.
- Confirm: Next, your wallet extension will prompt you to approve or deny the transaction. Click “Confirm”. Your NFT should be in your wallet within a few minutes.
OpenSea: a good entry point
OpenSea is objectively the most popular NFT marketplace and is likely to remain this way for some time. Besides hosting some of the most famous NFTs, OpenSea also streamlines trading NFTs. Consequently, people unfamiliar with crypto have been able to join the growing NFT community. It’s not entirely spotless, though, as some claim that the platform is not decentralized enough. Additionally, it does not support fiat transactions yet.
Overall, though, OpenSea is a good introduction point to NFTs. The NFT space is likely to grow, and OpenSea’s users will be among the beneficiaries.
Frequently asked questions
Is OpenSea trustworthy?
Are there fake NFTs on OpenSea?
Can you get scammed on OpenSea?
How much does it cost to get started on OpenSea?
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