Written by: Babywhale, Glendon, Techub News
On the evening of February 13, OpenSea announced the launch of the OS2 public beta version on X, and will launch the platform token SEA, and hinted that it will conduct an airdrop. Although the specific timetable and details have not yet been announced, this announcement has undoubtedly touched the hearts of many old players in the currency circle. In just one hour, the number of comments and reposts on the tweet has exceeded 1,000, and the community discussion has soared.
OpenSea CEO Devin Finzer also tweeted to emphasize that "the OS2 being launched is not just a new product, and SEA is not just a token, but a brand new OpenSea built from scratch." There have also been some rumors that the new version of OpenSea will refer to Blur's transaction-centric UI.
OpenSea is finally going to issue coins. If it were three years ago, this would definitely be a much-anticipated carnival in the cryptocurrency circle. However, things are different now. Today's cryptocurrency circle is dominated by MemeCoin, and NFT has long been "outdated." What's even more regrettable is that even if we limit our focus to the NFT field, OpenSea is no longer glorious. According to Dune data, OpenSea's trading volume in January was only US$195 million, a 96% drop from the peak of US$5 billion in early 2022, and its annual revenue has shrunk to about US$33.26 million.
According to nftpulse data, as of writing, Opensea's market share in the past 30 days has dropped sharply from 95% in December 2021 to 29%; on the other hand, OpenSea's valuation has also fallen from a peak of $13.3 billion in early 2023 to around $1.5 billion, and it has even fallen to the point of "selling itself".
So, why did OpenSea, which was once the dominant player in the NFT trading market, come to this?
Let's review the brief history of OpenSea's development and see how it rose rapidly and how it fell from the throne in the competition in the NFT market? Finally, let's talk about OpenSea's decision to issue coins at this time. What impact may it have on the entire NFT market landscape?
There is no doubt that among the startups in the Web3 field, OpenSea is undoubtedly a legendary company that started from scratch. Especially in the two years from 2021 to 2022, the company has leapt from obscurity to a super "unicorn" with a valuation of US$13.3 billion at an astonishing speed, and has firmly sat on the top spot in the NFT trading market. However, behind this glorious period is a dramatic history of market ups and downs. Therefore, the author believes that the rise and fall of OpenSea may also be seen as a microcosm of the NFT industry's transition from wild growth to rational competition.
In September 2017, Devin Finzer and Alex Atallah won seed round financing from the well-known venture capital incubator Y Combinator with their innovative project "Wificoin". This project aims to use cryptocurrency to pay for shared WiFi and has nothing to do with the NFT track.
However, in November 2017, Dapper Labs officially launched the Ethereum-based crypto cat game CryptoKitties, which triggered a wave of hype. The frenetic bidding once pushed the price of CryptoKitties' NFT collections to 247 ETH, which was about $118,000 at the time.
In the same year, CryptoKitties founder and CTO Dieter Shirley proposed the concept of NFT (Non-Fungible Token) and promoted the launch of EIP-721, which defines the NFT standard. (Techub News note: EIP-721 was later discussed and improved, and was officially passed in 2018 to become the current ERC-721 protocol standard.)
It was the proposal of this standard that changed the entrepreneurial direction of Devin Finzer and his partner. They decided to abandon the original "Wificoin" project and created the NFT trading platform Opensea in February 2018.
According to The Generalist, Devin Finzer said: "I see the potential of the NFT market because there is a standard for digital projects. Everything that comes after CryptoKitties will comply with this standard."
At that time, blockchain and cryptocurrency were in the early stages of development. The concept of NFT had not yet been popularized, and the entire NFT market was almost a wasteland.
Despite this, Opensea was not the only NFT trading platform at the time. Released on Product Hunt almost on the same day, there is also Rare Bits, which claims to be a "zero-fee crypto asset market similar to eBay", a competitor with more advantages than OpenSea. Interestingly, OpenSea also describes itself as "Ebay for crypto goods". (Techub News Note: Ebay is an online auction and shopping website that allows people around the world to buy and sell items online)
In May 2018, OpenSea raised $2 million from investors including 1confirmation, Founders Fund, Coinbase Ventures and Blockchain Capital. But Rare Bits received $6 million in financing as early as a month ago, with investors including Spark, First Round and Craft.
From the perspective of VC investment, although OpenSea is at a disadvantage, 1confirmation partner Richard Chen prefers OpenSea. He believes that "Rare Bits does not understand NFT as well as OpenSea, and OpenSea's team is more capable and more combative. Devin and Alex have also done a good job in discovering new NFT projects and promoting them to OpenSea. Moreover, when we invested in April 2018, OpenSea's trading volume was already 4 times that of Rare Bits."
In addition, the sales strategies of the two companies are also different. OpenSea insists on charging a 1% transaction commission (later gradually increased to 2.5%) to maintain operations through stable income. Rare Bits adopted a "zero handling fee" strategy in 2018 and promised to refund the gas fees generated by user transactions, trying to attract traffic by reducing user costs. This strategy attracted some attention in the early stage. It seemed to be more user-friendly, but it was not conducive to the long-term development of the platform. The high operating costs also doomed Rare Bits to be unsustainable, especially when the "cryptocurrency winter of 2018" was approaching.
During this period, in order to expand the user base and strive for platform transaction volume, Rare Bits also tried to expand its business from NFT to a wider range of virtual goods transactions, such as cooperating with the animation platform Crunchyroll to launch "digital stickers" and explore non-NFT asset transactions such as game props.
Unlike Rare Bits' diversification, OpenSea remains focused, and its focus has always been on improving the NFT trading business.
But on the long road before dawn, OpenSea's days were not easy either. The platform's early trading volume continued to be sluggish, and early projects were limited to a few NFTs such as CryptoKitties and CryptoPunks.
According to Titanium Media, in March 2020, the team had only 5 people and an average monthly trading volume of around $1 million. Calculated at the 2.5% commission rate at the time, OpenSea's monthly revenue was only $28,000. If it weren't for the $2.1 million "life-saving funds" injected by strategic investors such as Animoca Brands at the end of 2019, the startup might have disappeared in the industry's cold winter. As for Rare Bits, it was already in danger as early as 2019, and the platform completely withdrew from the market in 2020.
In hindsight, OpenSea's rise to become the king of the NFT field is inseparable from its operational decisions to focus on core business and streamline operations. Devin Finzer once said in an interview, "We are willing to develop in this field for a long time, regardless of the growth trajectory in front of us. We want to build a decentralized market for NFTs and hope that it will last for 3-4 years."
Time soon came to the second half of 2020, and dawn was approaching. This year can be said to be a watershed in the fate of OpenSea. With the gradual recovery of the Crypto market in the second half of the year, OpenSea took the lead in reaping the benefits by virtue of its advantage as a pioneer in the NFT market, and its platform transaction volume began to rise rapidly. Dune data shows that in October 2020, OpenSea's monthly transaction volume reached approximately US$4.18 million, an increase of approximately 66% from US$2.46 million in September.
In order to allow the platform to have more types of NFT assets and attract wider liquidity, OpenSea began to fully implement the "open market" product strategy.
In December 2020, OpenSea launched a new feature "Collection Manager", which allows users to mint NFTs without any handling fees (the gas fee is borne by the buyer). The official also called this feature "Lazy Minting", which separates on-chain issuance from metadata. Users can upload the metadata of the product to OpenSea for free, and only when the product is sold for the first time will it be minted as an on-chain ERC-1155 NFT.
This feature greatly reduces the threshold for creators, and based on the fact that OpenSea NFT listing does not require review, every user can directly mint and issue NFTs on OpenSea. Putting aside this advantage, OpenSea also covers the widest range of transactions among similar platforms, including digital avatars, music, domain names, virtual worlds, trading cards, artworks and other NFT collections. Its strategy maximizes the supply of creators' works and attracts more and more users in the primary and secondary markets.
Objectively speaking, the potential of the NFT market has contributed to OpenSea's subsequent success, but the rapid explosion of this field is also absolutely inseparable from OpenSea's contribution.
In 2021, the Crypto market ushered in a comprehensive "bull market", and OpenSea, which had been dormant for two years, began to really show its edge.
According to Dune data, in February 2021, OpenSea's data ushered in explosive growth for the first time. On February 2, OpenSea's daily trading volume exceeded 5 million US dollars, while OpenSea's trading volume for the whole month of January was just over 7.5 million US dollars. In the end, OpenSea's trading volume for the whole month of February was close to 95 million US dollars, an increase of more than 10 times from the previous month.
Since the beginning of 2021, a large number of commemorative NFTs have been issued on OpenSea. Bands, entertainment stars, sports stars, and well-known artists have begun to launch their own NFTs. A large number of well-known brands have also begun to launch commemorative NFTs or use NFTs to launch user loyalty activities. It can be said that NFTs, which started with CryptoKitties, combined Web3 with traditional industries for the first time, and also allowed many people who did not know Crypto to come into contact with a new "species" for the first time.
Budweiser's NFT series
As the largest NFT trading platform, OpenSea has finally waited for the arrival of the trend. Data shows that in March 2021, the transaction volume on OpenSea exceeded the 100 million US dollar mark for the first time, exceeded 300 million US dollars in July, and in August the figure increased by more than 10 times month-on-month to 3.44 billion US dollars. It was also in March that OpenSea completed a round of US$23 million in financing led by a16z, and many angel investors including Mark Cuban also participated in this round of investment.
Although NFT has actually started to develop rapidly since the beginning of 2021, the floor price of the CryptoPunks series of NFTs has also increased from single-digit ETH at the beginning of the year to more than 10 to 20 ETH in the middle of the year. However, the main narrative of the market in the first half of 2021 was still around DeFi, and everyone's attention had not yet completely shifted to NFT. The reason for this is that in addition to the rising popularity of DeFi, there are no targets and concepts in the NFT field that can be hyped.
After entering the second half of the year, the advent of a series of PFPs represented by BAYC completely ignited the passion of the market, and NFT is also considered to be another phenomenal concept after DeFi. With the rising popularity of NFT transactions, the monthly transaction volume on OpenSea has remained at a high level of billions of dollars, and the figure even exceeded 5 billion U.S. dollars in January 2022. Nate Chastain, head of product at OpenSea, tweeted at the end of August 21 that the company had only 37 people, and that month OpenSea's fee income alone exceeded 80 million U.S. dollars. The contribution of more than 2 million U.S. dollars per capita is extremely terrifying in any industry.
Before the end of 2021, OpenSea spent most of its time accelerating and sprinting. During this period, apart from the resignation of Nate Chastain due to an insider trading scandal, there was almost no other negative news about OpenSea. Even if other NFT trading platforms received large amounts of financing, they had no way to shake OpenSea's position. In fact, almost all NFT trading platforms' products more or less refer to OpenSea.
Amidst the prosperity, a turning point came quietly, and it all started with the rumor of OpenSea's listing...
In early December 2021, Bloomberg reported that Brian Roberts, CFO of Lyft, an American online car-hailing company, would join OpenSea as CFO. At the same time, Roberts said that he was planning an IPO for OpenSea. This was originally a very ordinary news, but it triggered some discussions in the Web3 industry. Many people believed that OpenSea should issue tokens to give back to OpenSea's users, and this is what Web3 projects should do.
Perhaps feeling some pressure, two days later, Brian Roberts personally came out to clarify that there is no IPO plan at present, and said that "there is a big gap between thinking about what the IPO will eventually look like and actively planning an IPO. We have no plans for an IPO. If we do, we will seek community participation."
This slightly ambiguous statement not only failed to dispel the community's concerns, but also strengthened everyone's choice that OpenSea will eventually go public, because he did not mention the coin at all.
If OpenSea decided to issue coins at the time, there might not be any subsequent exciting stories in the NFT trading platform track, and it was the "selfish" decision to choose an IPO that tore a hole in the originally unbreakable wall.
At that time, OpenSea occupied more than 90% of the NFT trading market on Ethereum. After its attitude of not issuing coins spread, some entrepreneurs found opportunities and quickly launched NFT trading platforms that issued tokens. LooksRare is one of them. Although it was not the first project to launch a "vampire attack" on OpenSea, it obviously had a great influence after OpenSea was ready to go public.
On January 10, 2022, LooksRare was officially launched. The team stated that users with a trading volume of more than or equal to 3 ETH on OpenSea can get airdrops by placing an order for an NFT on LooksRare. In addition, users can pledge the LOOKS airdrops they received to share all the transaction fees of the platform. Two days after LooksRare went online, its daily trading volume exceeded OpenSea, and as of January 19, 2022, the 7-day trading volume data showed that LooksRare was more than three times that of OpenSea.
When the rift was torn open and the market found that OpenSea was not completely invincible, everyone began to show their skills. X2Y2, which was launched in February 2022, Element, which focuses on BNB Chain, Zora, which focuses on art NFTs and takes the high-end route, and Magic Eden, which focuses on the Solana NFT market, are constantly eroding OpenSea's existing market and the market that may be expanded. Perhaps it is a bit too arrogant, but at least it was a big strategic mistake for OpenSea not to take precautions at the peak of its prosperity.
Despite this, OpenSea's market influence is still difficult to shake. As time enters the second quarter of 2022, on the one hand, Yuga Labs is about to issue APE tokens, and on the other hand, transactions of "blue-chip NFTs" such as Moonbirds and Doodles are still active. As the NFT trading market with the best liquidity, OpenSea still holds the lifeline of the NFT market.
The main person responsible for changing the entire NFT track or the collapse of NFT was quietly born at this time. Its appearance fundamentally changed everyone's stereotype of what the NFT market should look like.
At the end of March 2022, Blur announced that it had completed a $11 million financing. At that time, I believe many people would still wonder why there would be a new NFT trading platform at this point, but after Blur was officially launched at the end of October, it gave everyone a blow.
A completely different UI, it is clear that there will be airdrops for pending orders, bids, and buying and selling, and the airdrops are just "treasure boxes" with unknown tokens. Blur has achieved the ultimate in product and gameplay design, with a UI designed purely for trading and clear but unclear airdrops. Although many people initially sprayed Blur's UI for being very difficult to use, after getting used to it, everyone found that such a design is indeed much easier to use than OpenSea in terms of buying and selling. To make an analogy, if OpenSea is an e-commerce platform for NFT, then Blur is an exchange for NFT.
Prices are listed from low to high, and real-time transactions and the distribution of transaction prices are displayed on the right. With such a convenient UI design for transactions and the expectation of airdrops, a large amount of funds began to rush into Blur. Previously, many NFT trading platforms relied on tokens to attract traffic in the short term, but OpenSea's market share in transaction volume has not been challenged in monthly or quarterly data, but the emergence of Blur has brought OpenSea's share of transaction volume back to more than 50% until a week ago.
But it is precisely because of this that big funds have gained the ability to manipulate the market, buying and selling frantically. In addition, the Crypto market has entered a deep bear market at that time. Seeing that big funds have to swipe airdrops at all costs, a large number of NFT prices have been almost smashed. Retail investors have lost interest in NFTs. After Bitcoin has fallen to around $20,000, the "last goalkeeper" of crypto assets has also left the market. The collapse of the NFT market and the ascension of the new king Blur have made OpenSea a cannon fodder.
In early 2022, it completed a $300 million Series C financing with a valuation of $13.3 billion. Two years later, at the beginning of 2024, OpenSea CEO has already admitted that he is considering being acquired. In this round of Bitcoin's "one-person bull market", in addition to Pudgy Penguins, which has airdrop expectations, a large number of former blue-chip NFT floor prices have fallen to a terrible level. For OpenSea, if they don't make changes, they may end up giving away their years of hard work, which is definitely not what they want to see.
Therefore, OpenSea decided to launch the platform token SEA at the moment. On the one hand, it is a self-help measure to cope with the continued decline of the platform business; on the other hand, the former king may also have a little reluctance and ambition to return to the top. So the question is, is it possible for OpenSea to change the competitive landscape of the NFT market after issuing the token?
There is no doubt that Blur is the most likely to be impacted by OpenSea's issuance of tokens and the launch of the OS2 public beta version. As a powerful rival to subvert OpenSea's position, Blur has also shown a trend of decline with the downward trend of the Crypto market, but as of writing, its trading market share in the past 30 days is still over 44%, firmly sitting in the top spot in the NFT market.
In addition to the unique product UI and gameplay design mentioned above, Blur also attracted a large number of users with Bid Airdrop (bid reward tokens) and zero handling fee model. It has carried out airdrops many times in 2023 to grab market share, which can be seen from the data:
On February 15, 2023, Blur airdropped 360 million BLUR in the first quarter, accounting for 12% of the initial total supply and released immediately. According to Glassnode, after the BLUR token airdrop, Blur's market share surged, and its NFT transaction volume market share jumped from 48% to 78%, while OpenSea fell by 21%.
On February 23, 2023, Blur launched the second quarter of 300 million BLUR airdrops. This airdrop directly pushed Blur's transaction volume to surpass OpenSea by a large margin. DappRadar data showed that on February 22, 23, BLUR's transaction volume reached approximately US$108 million, while OpenSea's was only US$19.27 million during the same period.
To a certain extent, Blur's two large token airdrops have contributed greatly to breaking through OpenSea's "moat". As the saying goes, give someone a taste of their own medicine. At a time when the current NFT market has not yet recovered, if OpenSea's SEA token attracts users through airdrops or staking rewards, it is very likely to copy this strategy, and even imitate the "OpenSea killers" such as LooksRare and x2y2 to launch a "vampire attack" on Blur to compete for its core users.
In fact, since OpenSea confirmed that it would conduct an airdrop, it has aroused the expectations and heated discussions of many Twitter users. Many people believe that this will be one of the largest airdrops this year.
In addition, in terms of handling fees, the OS2 beta version recently launched by OpenSea reduces market fees to 0.5% and transaction fees to 0%, which directly targets Blur's zero handling fee model. When SEA is launched, OS2 is likely to build a very flexible competitive strategy in the form of a combination of "low handling fees + token incentives".
Objectively speaking, most users are profit-seeking in nature. If the reward mechanism of SEA tokens is more attractive, and some of Blur's existing users originally came from OpenSea, it may not necessarily cause these users to return to OpenSea. However, Blur's "moat" lies in its faster transaction speed and higher gas efficiency than OpenSea, and it still has a technical advantage in the short term.
Affected by the news of the coin issuance, the market has already reacted. According to nftpulse data, as of writing, OpenSea's daily trading volume has reached approximately US$29.8 million, and the transaction share has soared to 70.6% of the total daily trading volume.
For the entire NFT market, OpenSea's launch of the SEA token is undoubtedly a good thing. In addition to stimulating a sharp increase in NFT trading volume in the short term, OpenSea also tweeted that OS2 already supports cross-chain transactions of 14 chains including Flow, ApeChain, and Soneium. So, is it possible for the SEA token to become a universal token for the multi-chain NFT ecosystem, thereby promoting the development of the NFT market on Ethereum external chains (such as Solana)? This is worth looking forward to.
However, from another perspective, the upcoming fierce competition between OpenSea and Blur will once again squeeze the living space of second-tier platforms such as LooksRare and X2Y2, and Blur will surely not sit back and watch its former rivals make a comeback. Blur may launch more token application scenarios, or token rewards may further motivate user loyalty. In addition, Magic Eden, also a latecomer, should not be underestimated. With its dominant dominance on Bitcoin and Solana chains, its market transaction volume on the entire platform once reached US$3.2 billion in the past year, accounting for more than 30%, second only to Blur's US$3.8 billion (accounting for about 36%), while OpenSea's transaction volume in the past year was only US$1.2 billion, accounting for less than 12%.
In short, I believe that OpenSea's SEA token is not only the key to the platform's self-rescue, but may also become the driving force to push the NFT market out of the downturn. In the long run, the competition between OpenSea and Blur will also prompt the NFT field to develop in a more complex financial and multi-chain direction. As for whether OpenSea can regain its dominant position, whether the future pattern will be a two-strong confrontation, or whether Blur will continue to be the king, it depends on the performance of the SEA token after it goes online. Let's let the bullets fly for a while!
Russia’s bid to lead in AI faces critical power shortages. A partial crypto mining ban has failed to meet energy demands, leaving its AI ambitions in jeopardy. Can these hurdles be overcome, or will its goals falter?
CatherineAI-generated content on LinkedIn has surged since the launch of ChatGPT, with over 54% of longer posts now likely AI-created. While these tools help users produce polished content quickly, they have sparked debates over authenticity, ethics, and the impact on professional writing.
WeatherlyAttack on Titan: Invasion brings the anime’s epic battles to life in The Sandbox metaverse, where players defend against Titans using strategy and skill. This free experience offers action-packed gameplay, with optional NFTs for fans seeking a deeper connection to the series.
WeatherlyThe FTC is investigating Microsoft's business practices across cloud services, AI, cybersecurity, and software licensing, focusing on potential anti-competitive behaviour. This comes amid rising pressure on tech giants as regulators examine their growing influence and market dominance.
AnaisWaseem Khan, a 22-year-old British crypto millionaire, was arrested in Dubai in September 2024 and charged with drug dealing and money laundering. After spending months in harsh prison conditions, he was released on bail but remains trapped in Dubai, awaiting trial and uncertain about his future.
AnaisCZ has expressed concerns about the growing dominance of meme coins, urging developers to focus on blockchain projects with real-world utility. The rise of these tokens, driven by hype and speculation, risks damaging the reputation of the broader crypto market.
AnaisVancouver is exploring using Bitcoin in its financial reserves to protect against economic instability and inflation. The city aims to position itself as a hub for digital asset businesses and attract tech talent.
WeatherlyA former Binance executive claims she was fired for exposing a bribery scheme, while Binance argues her dismissal was due to poor performance. The case raises questions about whistleblower protections and company ethics in high-pressure environments.
AnaisToei Animation has teamed up with Wemade to create DenDenGarden, a blockchain-based game featuring NFTs from the DenDekaDen series. The game aims to expand into global markets, including Japan, Southeast Asia, and North America, with hopes of tapping into the growing blockchain gaming trend.
WeatherlyHong Kong is proposing tax exemptions on profits from cryptocurrencies and other alternative assets to attract wealthy investors and boost its status as a global wealth management hub. The policy aims to expand exemptions to various investment funds, including family offices, pension funds, and private equity, while fostering blockchain innovation.
Anais