OpenSea has been ups and downs for seven years, and the former "number one" of the NFT exchange still chose to issue coins

Author: Babywhale, Glendon, Techub News

On the evening of February 13, OpenSea announced the launch of the public beta version of OS2 on X, and will launch the platform token SEA, and hint that it will be airdropped. Although the specific timetable and details have not been released yet, the announcement has undoubtedly touched the hearts of many veteran players in the currency circle. In just one hour, the number of comments and retweets of the tweet has exceeded a thousand times, and the popularity of community discussions has soared.

OpenSea CEO Devin Finzer also tweeted that "the OS2 being launched is not just a new product, SEA is not just a token, but a brand new OpenSea built from scratch." There were some rumors that OpenSea's The new version will refer to Blur's transaction-centric UI.

OpenSea is finally going to issue coins. If it were placed three years ago, it would definitely be a highly anticipated currency carnival. However, now it is different from the past. The currency circle is now the world of MemeCoin, and NFTs have long been "out of date". What is even more sad is that even if we limit our focus to the NFT field, OpenSea is no longer brilliant. According to Dune data, OpenSea's transaction volume in January was only US$195 million, a 96% drop from its peak of US$5 billion at the beginning of 2022, and annual revenue shrank 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 peaked from 13.3 billion at the beginning of 2023. The US dollar has fallen to around 1.5 billion US dollars, and it has even fallen to the point of "selling it for sale".

So, why did OpenSea, which was once the overlord of the NFT trading market, come to this point?

Let's review a brief history of OpenSea's development to see how it rose rapidly and how it fell from the throne in the competition in the NFT market? Finally, let’s talk about what impact may OpenSea decide to issue coins at this time.

Age of creation: Wandering in the NFT wasteland to survive

What Mu Yong questioned is that among startups in the Web3 field, OpenSea is undoubtedly a legendary company that started from 0, especially in the two years from 2021 to 2022, the company jumped from unknown to valuation at an astonishing speed. The super "unicorn" with a US$13.3 billion is firmly in the No. 1 spot in the NFT trading market. However, behind this glory is a dramatic history of market ups and downs. Therefore, the author believes that the rise and fall of OpenSea may also be regarded as a microcosm of the NFT industry's growth from wild growth to rational competition.

In September 2017, Devin Finzer and Alex Atallah received a seed round of financing from the well-known venture capital incubator Y Combinator with the innovative project "Wificoin". This project aims to use cryptocurrency to share WiFi, and does not match the NFT track. It's related.

However, in November 2017, Dapper Labs officially launched the Ethereum-based crypto cat game CryptoKitties, which triggered a hype craze. The enthusiastic bidding once pushed CryptoKitties' NFT collection to 247 ETH, which was about 118,000 at the time. Dollar.

In the same year, Dieter Shirley, founder and CTO of CryptoKitties, 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 adopted in 2018 and became the current ERC-721 protocol standard.)

It was this standard that changed the entrepreneurial direction of Devin Finzer and they decided to abandon the original "Wificoin" project and founded the NFT trading platform Opensea in February 2018.

According to The Generalist, Devin Finzer said: "I saw the potential of the NFT market because there is a standard for digital projects, everything that comes out after CryptoKitties will comply with that standard."

At that time, it was the early stage of development of blockchain and cryptocurrencies. The concept of NFT was not yet popularized, and the entire NFT market was almost a wasteland.

Nevertheless, Opensea was not a unique NFT trading platform at the time. Rare Bits, which claims to be a "eBay-like zero-fee crypto asset market", is a competitor with an advantage over OpenSea. Interestingly, OpenSea also describes itself as " Ebay for crypto products”. (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 funding 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' understanding of NFT is not as good as OpenSea. OpenSea's team is more capable and more combat-oriented. Devin and Alex It’s also done a great job of discovering new NFT projects and pushing them to go online to OpenSea. And, when we invested in April 2018, OpenSea had already traded 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 revenue. Rare Bits adopted a "zero fee" strategy in 2018 and promised to refund the Gas fees incurred by user transactions, trying to attract traffic by reducing user costs. This strategy attracted some attention in the early stage. It seems to be more user-friendly, but it is actually not conducive to the long-term development of the platform. The high operating costs are also destined to be unsustainable, especially as the "2018 cryptocurrency winter" is approaching. At the moment.

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 commodity transactions, such as cooperating with the animation platform Crunchyroll to launch "digital stickers" and exploring game props and other non-compliant non-compliant products. NFT asset trading, etc.

Unlike Rare Bits’ diversification, OpenSea remains focused and its focus is always on improving the NFT trading business.

But on the long road before dawn, OpenSea's life was not easy. The platform's early transaction 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, with an average monthly transaction volume of around US$1 million. Based on the 2.5% commission rate at the time, OpenSea's monthly revenue was only US$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 long disappeared in the industry's cold winter. Among them. As for Rare Bits, it was in jeopardy as early as 2019, until 2020, the platform completely withdrew from the market.

In hindsight, OpenSea’s ability to rise and become the king of the NFT field is inseparable from its focus on core business and streamlined operational decisions. "We are willing to grow in this field for a long time, regardless of the current growth trajectory. We want to build a decentralized market for NFTs and hope it will last for 3-4 years," Devin Finzer said in an interview.

Time will soon come to the second half of 2020, and dawn is approaching. This year can be said to be a watershed in OpenSea's fate. With the gradual recovery of the Crypto market starting in the second half of the year, OpenSea took the lead in taking advantage of the NFT market pioneer, and its platform trading volume began to rise rapidly. Dune data shows that in October 2020, OpenSea's monthly transaction volume reached about $4.18 million, an increase of about 66% from $2.46 million in September.

In order to allow the platform to have more types of NFT assets and attract wider liquidity, OpenSea has begun to fully implement the "open market" product strategy.

In December 2020, OpenSea launched a new feature called "Collection Manager". Users can cast NFTs without handling fees (the Gas fee is borne by the buyer). The official also called this feature "Lazy Minting" and will On-chain issuance is separated from metadata, and users can upload the metadata of the product to OpenSea for free, and will only be cast as an on-chain ERC-1155 NFT when the product is first sold.

This feature significantly lowers the creator threshold, and based on the feature of OpenSea NFT listing without censorship, every user can directly cast 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, transaction cards, artworks and other NFT collections, and its strategy maximizes the creators. The supply of works has attracted more and more users in the primary and secondary markets.

Objectively speaking, the potential of the NFT market is ready to go has led to OpenSea's subsequent success, but the rapid development of this field is definitely indispensable for OpenSea's contribution.

In 2021, the Crypto market ushered in a comprehensive "bull market", and OpenSea, which has been dormant for two years, has also begun to truly show its strength.

NFT is a phenomenal hot, OpenSea is on the throne with billions of

dollars in monthly trading volume

According to Dune data, OpenSea's data ushered in explosive growth for the first time in February 2021. On February 2, OpenSea's single-day trading volume exceeded $5 million, while OpenSea's trading volume exceeded $7.5 million throughout January. Ultimately, OpenSea's trading volume for the whole month was close to $95 million, an increase of more than 10 times month-on-month.

It was also since the beginning of 2021 that a large number of commemorative NFTs began to be released on OpenSea. Bands, entertainment stars, sports stars and well-known artists began to launch their own NFTs, and a large number of well-known brands also began to launch commemorative NFTs or use NFTs. Launch a user loyalty campaign. It can be said that the NFT, which started with CryptoKitties, has combined Web3 with the traditional industry for the first time, and has also allowed many people who did not know Crypto to come into contact with a brand new "species" for the first time.

Budweiser launches NFT series

As the largest NFT trading platform, OpenSea finally waited for the arrival of the trend. Data shows that in March 2021, the transaction volume on OpenSea exceeded the $100 million mark for the first time, exceeding $300 million in July, while in August this figure increased by more than 10 times month-on-month, reaching $3.44 billion. It was also in March that OpenSea completed a $23 million round of 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 CryptoPunks series NFTs has also come from single-digit ETH at the beginning of the year to ETH at the middle of the year to ETH at the ten to twenty years. But the main narrative of the market throughout the first half of 2021 was still around DeFi, and everyone's attention had not completely shifted to NFT at that time. The reason is that, in addition to the rising popularity of DeFi, there are no targets and concepts that can be hyped in the NFT field.

After entering the second half of the year, the emergence of a series of PFPs represented by BAYC completely ignited the market's passion, and NFT is also considered another phenomenon after DeFi. With the rise in NFT trading, monthly trading volume on OpenSea has also remained at a multi-billion dollar high, with the figure even exceeding $5 billion in January 2022. Nate Chastain, product manager of OpenSea, tweeted at the end of August 21 that the company had only 37 people, and that month, OpenSea's handling fee revenue alone exceeded US$80 million, and the per capita contribution of more than US$2 million is extremely high in any industry. A terrifying existence.

Before the end of 2021, OpenSea will accelerate its sprint most of the time, and in the meantime, except for the just mentioned Nate Chastain resigned due to insider trading scandal, OpenSea has almost no other negative news, even if other NFT trading platforms are There is no way to shake OpenSea's status after obtaining large financings. Even almost all products of NFT trading platforms refer to OpenSea to a more or less.

Challengers are eyeing each other, but OpenSea "betrayed" Web3 and

intends to go public?

Under a prosperous era, the turning point quietly came, and all this started with the rumors of OpenSea’s listing…

In early December 2021, Bloomberg reported that American ride-hailing company Lyft CFO Brian Roberts will join OpenSea and serve as CFO. At the same time, Roberts said he is planning an IPO plan for OpenSea. This was originally a very ordinary news, but it has sparked some discussion in the Web3 industry. Many people believe that OpenSea should issue tokens to give back to OpenSea users, and this is what the Web3 project should do.

Perhaps feeling some pressure, two days later, Brian Roberts personally came out to clarify that there is currently no IPO plan and said, "There is a big gap between thinking about what the IPO will eventually look like and actively planning the IPO, we have no plans to do it. , if we have one, we will seek community participation.”

This slightly ambiguous statement not only did not dispel the community's concerns, but instead strengthened everyone's choice of OpenSea's listing, because he did not mention the issuance of coins at all.

If OpenSea decided to issue coins at that time, there might not be a wonderful story in the NFT trading platform track. It was the "selfish" decision to choose IPO that made the originally unbreakable city wall torn apart Touch.

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 an NFT trading platform for issuing tokens. LooksRare is one of them. Although it is not the first project to launch a "vampire attack" on OpenSea, it has obviously had a great influence after OpenSea is preparing to go public.

On January 10, 2022, LooksRare was officially launched. The team said that only users with transaction volume of more than or equal to 3 ETH on OpenSea can hang a single NFT on LooksRare to obtain airdrops. In addition, users can pledge the obtained LOOKS airdrop Share all transaction fees on the platform. LooksRare has exceeded OpenSea's single-day trading volume 2 days after its launch, and LooksRare is more than three times that of OpenSea in the 7-day trading volume data as of January 19, 2022.

When the crack was torn open and the market found that OpenSea was not completely invincible, everyone began to show their magical powers. X2Y2, which was launched in February 2022, Element focused on BNB Chain, Zora focused on art NFTs, and Magic Eden focused on Solana NFT market are constantly eroding OpenSea's existing market and the possible expansion. market. Perhaps it is a bit extreme to say that arrogance is a bit extreme, but at least it is not preventing problems before they happen at its peak, which is indeed a major mistake in OpenSea's strategy.

Despite this, OpenSea's market influence is still hard to shake. The time has entered the second quarter of 2022. On the one hand, Yuga Labs will issue APE tokens soon, and on the other hand, trading of "blue chip NFTs" such as Moonbirds and Doodles is still active. As the best liquid NFT trading market, OpenSea still has the control. The lifeblood of the NFT market.

The main person responsible for changing the entire NFT track or the NFT collapse was quietly born at this time. Its appearance fundamentally changed everyone's stereotype of what the NFT market should look like.

Blur emerged, and the NFT market changed hands

At the end of March 2022, Blur announced that it had completed a US$11 million financing. At that time, I believe many people would still wonder why a new NFT trading platform came out. However, after Blur went online at the end of October, it gave everyone a blow.

A completely different UI clearly states that there will be airdrops for orders, Bids, and transactions, and the airdrop is just a "treasure chest" of unknown how many tokens will be opened. Blur has achieved the ultimate in product and gameplay design by simply designing transactions and clear but unclear airdrops. Although many people criticized Blur's UI as difficult to use at the beginning, after getting used to it, everyone found that such a design is indeed much easier to use than OpenSea in terms of transactions. To make an analogy, if OpenSea is an e-commerce platform for NFT, then Blur is an exchange for NFT.

Prices are listed in sequence from low to high, and the real-time transactions and distribution of transaction prices are displayed on the right. This convenient UI design for trading and airdrop expectations, a large amount of funds began to rush into Blur. Previously, many NFT trading platforms rely on tokens to attract traffic in the short term, but OpenSea's market share in transaction volume was not challenged in monthly or quarterly data. However, the emergence of Blur made OpenSea's transaction volume until a week ago The proportion returned to more than 50%.

But it is also because of this that large funds have gained the ability to manipulate the market and bought and sold frantically. At that time, the Crypto market had entered the Shenzhen Bear. Seeing that large funds had to brush airdrops regardless of cost, the prices of large NFTs were almost smashed. Retail investors lost interest in NFTs, and after Bitcoin had fallen to around $20,000, the "last goalkeeper" of crypto assets also left the market in disgrace. The collapse of the NFT market coupled with the new king Blur's ascension, OpenSea became cannon fodder.

At the beginning of 2022, it also completed a US$300 million Series C financing with a valuation of US$13.3 billion. Two years later, at the beginning of 2024, the CEO of OpenSea had admitted that he was considering being acquired. In this round of Bitcoin's "one-person bull market", in addition to Pudgy Penguins, which has expected airdrops, the floor prices of a large number of former blue-chip NFTs have fallen to a terrible decline. For OpenSea, if you don't make any changes, you may be reduced to giving up years of hard work, which is definitely not what they want to see.

Therefore, OpenSea's current decision to launch the platform token SEA is, on the one hand, a self-rescue move to cope with the continued decline of the platform business; on the other hand, this former king may also have a little unwillingness 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 coins?

With the recent surge in trading volume, is OpenSea expected to reshape

the competitive landscape of the NFT market?

There is no doubt that the most likely impact of OpenSea’s coin issuance and launching the OS2 public beta version is Blur. As a powerful enemy to subvert OpenSea's position, Blur has shown a decline in Crypto market trends, as of writing, its trading market share in the past 30 days has exceeded 44%, firmly ranking first in the NFT market Take the seat.

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 token) and zero-fee model. It once airdropped many times in 2023 to seize market share. You can see from the data:

On February 15, 2023, Blur conducted a 360 million BLUR airdrop in the first quarter, with airdropping tokens accounting for 12% of the initial total supply and released immediately. According to Glassnode, Blur's market share surged after the BLUR token airdrop, with its NFT trading volume market share jumping from 48% to 78%, while OpenSea fell 21%.

On February 23, 2023, Blur launched its second season of 300 million BLUR airdrops. The airdrop directly pushed Blur's trading volume to significantly surpass OpenSea. DappRadar data showed that the BLUR trading volume reached about US$108 million on February 22, 2023, while OpenSea was only US$19.27 million during the same period.

To a certain extent, Blur's two large token airdrops made indestructible contributions to breaking OpenSea's "moat". As the saying goes, if the NFT market has not yet recovered, if OpenSea's SEA token attracts users through airdrop or pledge rewards, it is very likely to copy this strategy and even follow the looksRare and x2y2 of that year. Wait for the "OpenSea Killer" to launch a "vampire attack" on Blur to compete for its core users.

In fact, since OpenSea confirmed that it would make airdrops, it has aroused the expectations and heated discussions of many Twitter netizens, and 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 launched by OpenSea recently reduced the market fee to 0.5% and the transaction fee was 0%, which directly benchmarked Blur's zero handling fee model. When SEA was launched, OS2 relied on "low" The form of a combination of handling fees + token incentives is very likely to build a very flexible competitive strategy.

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 are originally from OpenSea, it may not cause these users to flow back to OpenSea. However, Blur's "moat" is that its transaction speed is faster than OpenSea and its Gas is more efficient, and it still has technical advantages in the short term.

Due to the news of the issuance of coins, the market has already reacted. According to nftpulse data, as of writing, OpenSea's single-day trading volume has reached about US$29.8 million, and the transaction proportion has soared to 70.6% of the total single-day trading volume.

For the entire NFT market, it is undoubtedly a good thing to launch SEA tokens. In addition to stimulating a sharp increase in NFT trading volume in the short term, OpenSea also tweeted that OS2 has supported cross-chain for 14 chains including Flow, ApeChain, Soneium, etc. Trading, then can SEA tokens become a common token for the multi-chain NFT ecosystem, thereby promoting the development of the NFT market for Ethereum external links (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 probably not sit back and see the return of former rivals. Blur may launch more Token application scenarios, or token rewards, further inspire user loyalty. In addition, Magic Eden, also a late-stage star, should not be underestimated. With its dominance in Bitcoin and Solana's chain, its trading volume on the entire platform once reached US$3.2 billion in the past year, accounting for more than 30% of the market. , second only to Blur's $3.8 billion (about 36%), while OpenSea's trading volume in the past year was only $1.2 billion, accounting for less than 12%.

In short, the author believes that OpenSea's SEA token is not only the key to the platform's self-rescue, but may also become the driving force that drives the NFT market out of a sluggish market. In the long run, the competition between OpenSea and Blur will also prompt the NFT field to become more stable. Complex financialization and multi-chain development. As for whether OpenSea can regain its dominance, whether the future situation will be a two-strong fight, or whether Blur will continue to be the king, it depends on the performance of the SEA token after it is launched. Let us let the bullets fly for a while!