OpenSea is an American online non-fungible token marketplace headquartered in New York City. The company was founded by Devin Finzer and Alex Atallah in 2017.
OpenSea offers a marketplace allowing for non-fungible tokens to be sold directly at a fixed price, or through an auction, based on the Ethereum ERC-721 standard and the layer-2 scaling solution for Ethereum Polygon.
In 2021, following a heightened interest in non-fungible tokens, the company’s revenue reached $95 million in February 2021 and $2.75 billion in September of that year. By January 2022, the company had been valued at $13.3 billion and has been considered the dominant non-fungible token marketplace.
History
After a 2018 pre-seed round by Y Combinator, OpenSea raised $2.1 million in venture capital (including from Animoca Brands) in November 2019.
In December 2020 Opensea announced that any user can Mint NFTs on it’s platform for free. Later in March 2021 OpenSea announced NFT collections would no longer need OpenSea’s previous approval to be listed. The decision were later critisized for allow rampant NFT plagiarism on the platform.
In March 2021, OpenSea raised an additional $23 million in venture capital (including. A16z Crypto/Andreessen Horowitz, among others). In July 2021, OpenSea announced another investment round of $100 million at a valuation of $1.5 billion by a16z.
In February 2021, revenues were the equivalent of $95 million, in March the equivalent of $147 million, and in September $2.75 billion.
In September 2021, OpenSea released an app for Android and iOS. The app allowed browsing the market place, but not buying or selling NFTs. The same month, OpenSea admitted that an employee engaged in insider trading. OpenSea’s Head of Product hoarded NFTs just before they were featured in the homepage.
In January 2021 Twitter announced that it would use OpenSea’s API to let people create hexagonal shaped NFT-based profile pictures.
In January 2022, OpenSea raised $300 million in new venture capital (Paradigm and Coatue Management), valuing it at $13.3 billion. Also in January 2022, OpenSea acquired ethereum wallet-maker, Dharma Labs.
On January 27, 2022 Opensea announced it would limit how many NFTs a user can create using the free minting tool, but the next day it reversed the decision after user backlash. OpenSea later admitted that 80% of NFTs created with the tool where plagiarism or spam.
In January 2022 OpenSea reimbursed users about $1.8 million after a user interface bug allowed users to buy more than $1 million worth of NFTs at a discount.
In February 2022 Wired reported that the company was stuck having to please both those who favored cryptocurrency who favored lack of changes to the site and digital art creators who favor that the company cracks down on plagiarism as well as security and user behavior issues on the platform.
Criticism
Fraudulent non-fungible tokens
On January 27, 2022, following the decision to reverse a 50 item limit on OpenSea’s minting tool, the company revealed that 80% of the non-fungible tokens minted through its minting tool were plagiarized, fake, or spam.
Insider trading
In September of 2021, OpenSea announced that it was parting ways with its former Head of Product over allegations of insider trading of NFTs on its platform.
“OpenSea” Wikipedia, Wikimedia Foundation, n.d.
