OpenSea
OpenSea, is a online marketplace that allows individuals to buy and sell Non-fungible tokens (NFTs). The founders Devin Finzer (CEO) and Alex Atallah (CTO) launched the OpenSea beta version of the marketplace December 2017, the first open marketplace for any non-fungible token on the Ethereum blockchain.[1] OpenSea is currently among the largest NFT marketplaces today, with popular NFT categories including art, music, photography, trading cards, and virtual worlds.[2] Opensea has charged a fee of 2.5 percent for each transaction since the release in 2017. [2] OpenSea continues to expand it reach to new NFTs across blockchain and keep a straightforward marketplace for users.[2] OpenSea has created a popular marketplace, with everything it has to offer, it is also important to know the concerns regarding to personal privacy, access rights, liabilities, and other ethical issues. [3]
History
Funding
The company OpenSea was founded by Devin Finzer and Alex Atallah December, 2017. Over the next couple of months into 2018, OpenSea raised $2 million during their seed round (first real cash injection a startup receives)to make true digital ownership more accessible. This was from the help of Y Combinator (YC), a technology startup accelerator company. Notable investors include: Coinbase Ventures, Founders Fund, and Chernin Group.[4] Now with OpenSea, there is an option of exchanging digital collectibles between a third party that was originally done between two "untrusted" parties. Over those first months in 2018, OpenSea had over half a million dollars in Ethereum a Cryptocurrency transferred through their smart contract.[5] In March 2021, OpenSea raises $23 million to scale what is known as the largest marketplace for NFTs and a few months later raised $100 million in series B. Documented as Series A funding (a stage of fundraising that a business completes after the seed round). [6] [7] Their last known funding is in January 2022, series C, with $300 million raised, this was led by Paradigm and Coatue along with other new and previous investors. Allowing them to acelerate product development, improve customer support and safety and grow their team. During that time, they were at a $13.3 billion post money valuation. [8]
Features
OpenSea has added many features since the opening of their marketplace. In 2018, OpenSea announced the ability to bid on NFTs. This allowed buyers and sellers a new option to obtain NFTs on OpenSea. OpenSea worked with a team at Wyvern protocol to create this new marketplace option.[9] The team continued working with Wyvern protocol to build many other features: sellers of NFTs could now list their collectables without paying gas fees. Paying gas is a fee when making transactions over the blockchain. [10] The introduction of bundles: a requested feature where users have the ability to sell a group of NFTs as a package rather than individual listing. [11] OpenSea acquired Atomic Bazaar to bring real time trading to users of the marketplace. [12] January 2019, OpenSea announces zero fee private auctions and bulk transfers allowing users to move their collectibles from one wallet to another in one transaction. [13]
2018
OpenSea raises $2 million during their seed round (first real cash injection a startup receives)to make true digital ownership more accessible[14]. This was from the help of Y Combinator (YC), a technology startup accelerator company. Notable investors include: Coinbase Ventures, Founders Fund, and Chernin Group. Now with OpenSea, there is an option of exchanging digital collectibles between a third party that was originally done between two "untrusted" parties. Over the first few months, OpenSea had over half a million dollars in Ethereum a Cryptocurrency transferred through their smart contract.[15]
June, Decentralizing NFT metadata on OpenSea, metadata is https://opensea.io/blog/articles/decentralizing-nft-metadata-on-opensea
July, OpenSea raises 100m in series B https://opensea.io/blog/articles/announcing-our-100m-raise-led-by-a16z
Aug, new features https://opensea.io/blog/articles/new-features-updates-july-2021
Sep, new features https://opensea.io/blog/articles/new-features-and-updates-august-21
Sep, introducing the OpenSea mobile app https://opensea.io/blog/articles/introducing-the-opensea-mobile-app
Oct, better offer management features, new listing flow https://opensea.io/blog/articles/hello-better-offer-management-features-new-listing-flow
Oct, new features and updates https://opensea.io/blog/articles/new-features-and-updates-mobile-app-offer-management-tools-and-more
Oct, improve nfts security https://opensea.io/blog/articles/opensea-collaborates-with-check-point-research-to-mitigate-vulnerability
Nov, new featuers https://opensea.io/blog/articles/new-features-updates-user-safety-adobe-and-more
Dec, new CFO, after previous ceo did this: https://opensea.io/blog/articles/introducing-brian-roberts-our-new-cfo
2022
Jan, OpenSea raises 300m in series c. https://opensea.io/blog/articles/announcing-openseas-new-funding
Jan, OpenSea creates bug bounty program https://opensea.io/blog/articles/openseas-bug-bounty-program
Jan, Introducing NFT Security group https://opensea.io/blog/articles/introducing-the-nft-security-group
OpenSea arquires Dharma Labs https://opensea.io/blog/articles/opensea-acquires-dharma-labs-welcomes-new-cto
Listing and delisting updates https://opensea.io/blog/articles/important-updates-for-listing-and-delisting-your-nfts
Feb, Wyvern 2.3 Upgrade https://opensea.io/blog/articles/wyvern-2-3-developer-upgrade-guide
Feb, OpenSea partners with CoinTracker for tax help. https://opensea.io/blog/articles/nft-tax-help-has-arrived-through-our-partnership-with-cointracker
Feb, contract upgrade https://opensea.io/blog/articles/announcing-a-contract-upgrade
April, Solana nfts now beta on opensea https://opensea.io/blog/articles/check-out-solana-in-beta-on-opensea
April Opensea acquires Gem https://opensea.io/blog/articles/opensea-acquires-gem-to-invest-in-pro-experience
May, Verification process for projects is being improved https://opensea.io/blog/articles/were-improving-the-opensea-verification-process
May, update on copumint prevention https://opensea.io/blog/articles/improving-authenticity-on-opensea-updates-to-verification-and-copymint-prevention
May, seaport protocol https://opensea.io/blog/articles/introducing-seaport-protocol
May, new opensea user interface https://opensea.io/blog/articles/updating-the-opensea-experience
June, curb fraud and plagiarism. https://opensea.io/blog/articles/our-efforts-to-curb-fraud-and-plagiarism-and-whats-next
June, ability to hide suspicious nft transfers https://opensea.io/blog/articles/hiding-suspicious-nft-transfers-on-opensea
June, launching of seaport and saving fees https://opensea.io/blog/articles/launching-seaport-saving-the-community-millions-in-fees
June 29th, important update on email vendor security incident https://opensea.io/blog/articles/important-update-on-email-vendor-security-incident
July, Announcing opesea's solana launchpad https://opensea.io/blog/articles/opensea-solana-launchpad
July 30, Chris Dixon joins Board of Directors https://opensea.io/blog/articles/welcoming-chris-dixon-to-our-board-of-directors
Aug, update on verification https://opensea.io/blog/articles/an-update-on-verification-and-copymint-prevention
Sept, new opensea homepage, https://opensea.io/blog/articles/introducing-the-new-opensea-homepage
Sept, drops on opensea https://opensea.io/blog/articles/drops-on-opensea-an-immersive-and-secure-minting-experience
Sept, Expanging the global nft ecosystem https://opensea.io/blog/articles/expanding-the-global-nft-ecosystem-a-preview-of-chain-expansion-and-language-support
Nov, efforts to prevent nft theft https://opensea.io/blog/articles/our-efforts-to-prevent-nft-theft
Nov creator fees https://opensea.io/blog/articles/on-creator-fees
2023
Feb, January product updates https://opensea.io/blog/articles/product-updates-january-2023
Feb, new private beta testing program https://opensea.io/blog/articles/private-beta-testing-program
Social Media
Competitors
Some other marketplaces include
Ethereum Blockchain
Solana Blockchain
Ethical concerns
Insider Trading
Nathaniel Chastain, a former employee of OpenSea, was responsible for choosing which NFTs would be featured on OpenSea's homepage. Chastain used confidential information of NFT's that was soon to be featured on OpenSea homepage to purchase dozens of the NFTs before they were featured. This occurred for several months before the employee was caught and legally punished. According to the Department of Justice "CHASTAIN, 31, of New York, New York is charged with one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison."[16] "From at least in or about June 2021 to at least in or about September 2021, CHASTAIN used OpenSea’s confidential business information about what NFTs were going to be featured on its homepage to secretly purchase dozens of NFTs shortly before they were featured." [17]. Chastain was also forced to return any money that was made from these actions.[18] This leads to harmful actions against OpenSea users. [19]
Wash Trading
NFT Marketplace Competitors have little to no trading fees. Causing traders to buy and sell the same NFT repeatedly. This caused manipulation in the trading volume and analytics on OpenSea. [20]
Phishing Attack
Contract Vulnerability
OpenSea was subject to an exploit with the use of Wyvern Protocol, used for most NFT smart contracts. "One explanation (linked by CEO Devin Finzer on Twitter) described the attack in two parts: first, targets signed a partial contract, with a general authorization and large portions left blank. With the signature in place, attackers completed the contract with a call to their own contract, which transferred ownership of the NFTs without payment. In essence, targets of the attack had signed a blank check — and once it was signed, attackers filled in the rest of the check to take their holdings." [21]
OpenSea users move there nfts from one wallet to another for many reasons. The discovery of not desired feature linked to it. If users had an NFT listed on a wallet which they transfered, the new wallet would now have this NFT and with no listing shown to the NFT. If a user was to send the NFT back to the wallet it was listed on, the listing would show back up and allow buyers to purchase. This caused many users to be harmfully affected by this unknown fact. Many collectors of the Bored Ape Yacht Club NFT lost large amounts of money due to this. As the price of an NFT collection raises, users who transferred their NFT to an old wallet where it was listed would soon realize there NFT was purchased under the current value within seconds by bots for such events. [22]
Email Scam
Some OpenSea users reported Wednesday receiving emails from “team@opensea.io”. According to @0xQuit on Twitter, the phishing link redirects users to a scam site that attempts to steal their seed phrase. [23] " A seed phrase is a master key that unlocks access to all your crypto assets. It’s like giving someone your bank account username and password." [24]
Sniping Bots
NFT Copyright
Bugs
References
- ↑ OpenSea. (n.d.). About. OpenSea. Retrieved February 16, 2023, from https://opensea.io/about
- ↑ 2.0 2.1 2.2 Rodeck, D. (2023, February 1). Top NFT marketplaces of February 2023. Forbes. Retrieved February 16, 2023, from https://www.forbes.com/advisor/investing/cryptocurrency/best-nft-marketplaces/
- ↑ Images, R. R. A. F.-P. G. (2022, February 17). OpenSea's NFT free-for-all. The Wall Street Journal. Retrieved February 16, 2023, from https://www.wsj.com/articles/openseas-nft-free-for-all-11644642042
- ↑ Finzer, D. (2022, November 23). OpenSea raises $2 million to make true digital ownership more accessible. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/opensea-raises-2-million
- ↑ Finzer, D. (2022, November 23). OpenSea raised $2 million to make true digital ownership more accessible. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/opensea-raises-2-million
- ↑ Finzer, D. (2022, November 23). OpenSea raises $23M to scale the largest marketplace for NFTS. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/opensea-raises-23m-to-scale-the-largest-marketplace-for-nfts
- ↑ Finzer, D. (2022, November 23). Announcing our $100m raise, led by A16z. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/announcing-our-100m-raise-led-by-a16z
- ↑ Finzer, D. (2022, November 23). Announcing OpenSea's new funding. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/announcing-openseas-new-funding
- ↑ Finzer, D. (2022, November 23). Bid on your favorite crypto collectibles! OpenSea. Retrieved February 17, 2023, from https://opensea.io/blog/articles/bid-on-your-favorite-crypto-collectibles
- ↑ Finzer, D. (2022, November 23). _Sell your crypto collectibles without paying gas!_ OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/sell-your-crypto-collectibles-without-paying-gas
- ↑ Finzer, D. (2022, November 23). _Introducing bundles_. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/introducing-bundles
- ↑ Finzer, D. (2022, November 23). _We've acquired Atomic Bazaar to bring real-time trading to OpenSea users_. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/atomic-bazaar
- ↑ Viau, D. (2022, November 23). _OpenSea announces zero-fee private auctions!_ OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/zero-fee-private-auctions
- ↑ Finzer, D. (2022, November 23). OpenSea raises $2 million to make true digital ownership more accessible. OpenSea. Retrieved February 16, 2023, from https://opensea.io/blog/articles/opensea-raises-2-million
- ↑ Devin, Finzer (May 10, 2018). "OpenSea raises $2 million". Retrieved Feb 11, 2023.
- ↑ https://www.justice.gov/usao-sdny/pr/former-employee-nft-marketplace-charged-first-ever-digital-asset-insider-trading-scheme
- ↑ https://www.justice.gov/usao-sdny/pr/former-employee-nft-marketplace-charged-first-ever-digital-asset-insider-trading-scheme
- ↑ https://www.theverge.com/2022/6/1/23150429/opensea-insider-trading-nathaniel-chastain-arrested-homepage-nfts
- ↑ https://www.cnbc.com/2022/06/01/former-opensea-employee-charged-in-first-ever-nft-insider-trading-case.html
- ↑ https://thedefiant.io/nft-wash-trading-2022
- ↑ https://www.theverge.com/2021/10/13/22723092/opensea-nft-vulnerability-gift-security-researchers-wallet-hack
- ↑ https://www.forbes.com/sites/davidbirch/2022/02/20/nfts-new-fraud-targets/?sh=814ff304f377
- ↑ https://www.nftgators.com/opensea-users-warned-about-a-new-email-phishing-scam/
- ↑ https://www.forbes.com/sites/forbestechcouncil/2022/04/27/four-crypto-and-blockchain-phishing-scams-to-be-aware-of-before-you-get-excited-about-web3/?sh=4a820ba125c5
