OpenSea is one of the most popular NFT exchanges in crypto. In this review, we will objectively examine the platform’s pros and cons. Here’s what to know about OpenSea and NFTs in 2024.
KEY TAKEAWAYS
• OpenSea is an NFT marketplace that allows users to buy, sell, and trade NFTs using cryptocurrencies.
• The platform offers a variety of NFTs, supports multiple crypto wallets, and uses smart contracts to ensure user security.
• While it offers a simple experience with features like zero gas fees for minting, it faces criticism for being centralized and lacking fiat payments.
• OpenSea’s established reputation make it a strong entry point for those new to NFTs, despite past security issues and controversies.
What is OpenSea?
OpenSea is one of the most popular marketplaces for purchasing non-fungible tokens (NFTs). In 2017, entrepreneurs Devin Finzer and Alex Atallah created the OpenSea marketplace. They relocated to New York to run the business. The startup was a pioneer in the NFT space, which really took off in early 2021.
Both men had experience working in the tech world. Devin Finzer was born in the Bay Area and studied at Brown University. 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. After graduating, he worked for Silicon Valley startups Zugata and Whatsgoodly.
OpenSea’s history
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.
We founded OpenSea in 2017 after getting really excited about some early NFT projects. One of them was called CryptoKitties. It was an app that lived on the blockchain instead of a company owned server.
Devin Finzer: OpenSea Co-founder
Their concept paid off. By 2021’s NFT boom, OpenSea was the largest platform of its kind. Here is a brief rundown of some notable events in OpenSea’s history:
- In 2022, the company announced it had raised another $300 million in venture capital.
- In 2022 and 2023, a feud erupted and intensified between OpenSea and the Blur NFT marketplace. Blur gained traction after its launch because of its zero trading fees and lower royalty payouts, directly challenging OpenSea’s dominance. OpenSea retaliated by reducing its platform fees and adjusting its royalty policies.
- As part of an ongoing war against crypto businesses, the U.S. SEC issued a Wells notice against OpenSea in 2024, claiming the popular marketplace may have violated federal laws by facilitating the sale of NFTs that could be considered securities.
How does OpenSea work?
OpenSea’s users can buy and sell digital assets using crypto or fiat currencies. The peer-to-peer (P2P) marketplace lists some of the most famous NFT collections. Consequently, some of the largest sales in the NFT space have occurred using OpenSea.
Non-fungible tokens (NFTs) are unique digital assets that live on the blockchain. They cannot be replaced by any other asset. This is unlike Bitcoin, ofr example, which is fungible: 1 BTC is the same as any other 1 BTC.
OpenSea uses smart contracts to buy and sell NFTs. Smart contracts enable users to secure the custody of their NFT collection on the platform and provide security for the creator. The platform uses ERC721 and ERC1155 standards to verify that NFT collectors own the assets they list on the marketplace.
OpenSea operates Ethereum and ten other blockchains. To buy or sell NFTs, you will need an Ethereum wallet such as MetaMask, TrustWallet, or Coinbase. To purchase or sell NFTs, users need to connect to their crypto wallets.
OpenSea users have over 150 payment options to choose from and allows them to select from over millions of NFTs.
What cryptocurrencies are accepted on OpenSea?
OpensSea supports over 150 cryptocurrencies. The main currencies used on the platform are Ethereum (ETH) and WETH, USDC, and DAI. OpenSea also offers cross-blockchain support.
To take part in auctions on the platform, you will need WETH. Wrapped ETH (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.
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 allows users to convert crypto to their local currency when engaging in trades on the platform. It is not possible to use fiat directly for NFT purchases on OpenSea.
Ether is the most commonly used currency on OpenSea. However, users can also use MATIC. To do this, they have the option to deposit from an exchange or buy directly with their credit card via MoonPay.
OpenSea features
Several features help OpenSea stand out from the pack. These, 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 the creation of an account. Users simply connect their wallets. 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. 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.
Different types and genres of NFTs
OpenSea caters to all types of NFT categories. Users are able to purchase NFTs that feature art, assets used in virtual worlds (metaverse), sports trading cards, game items, utility tokens, and even domain names.
Relatively low fees
OpenSea has a simple fee model. It offers its marketplace free of charge, and it’s completely free to set up a marketplace or use its platform. OpenSea charges a 2.5% service charge on all sales and a 10% royalty to the original NFT creator.
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 without knowledge of blockchain or programming. This service is also free, although many competitors charge fees for creating NFTs.
Pros and cons of OpenSea
Being the popular platform that it is, OpenSea naturally has some advantages and disadvantages. Here is a brief overview of the pros and cons, followed by a more detailed breakdown.
| Pros | Cons |
|---|---|
| Anonymous purchases | Past issues with the team |
| Multiple payment options | Centralized |
| Established team of developers | Previous exploit |
| Mobile app | |
| Zero gas fee program |
Advantages of OpenSea
It is no accident that OpenSea has gained a large share of the NFT market. Here, we detail some of the advantages that contributed to its dominance.
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 connect your crypto wallet. This means that you are not sharing your information 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.
Several 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.
The platform accepts only cryptocurrency payments and allows secondary sales. Several payment options are 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.
Large number of collectibles
OpenSea lists over 20 million user-owned assets. Users can choose different options for listing their NFTs. These can be sold at an auction or a fixed price.
Collectibles, trading cards, and a variety of utility tokens are also available for sale. OpenSea hosts over 200 digital asset categories. The platform includes an hourly updated ranking table that displays the top NFTs based on market cap.
It comes with a mobile app
OpenSea launched its first app for Android and iOS in September 2021. The app functions as a gallery, allowing users to browse artwork and share listings. The software also allows you to view and manage your NFT collection.
The app is helpful for researching NFTs. Similar to industry rivals Rarible, OpenSea’s mobile app doesn’t currently allow transactions. The company, however, says this is part of a broader plan to spread the use of NFTs further.
Zero gas fee program
OpenSea simplified the minting process by endorsing its zero gas fee program in 2021. The platform’s collection manager allows creators to make NFTs without 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 the project was started. 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.
Disadvantages of OpenSea
It’s important to get the full picture of OpenSea’s platform before judging its potential. This means analyzing its downsides as well.
No fiat support
OpenSea does not support payments in conventional currencies such as USD or AUD. As previously stated, you can only purchase NFTs with crypto. However, you can use MoonPay to purchase crypto to buy NFTs.
Centralization
There are also questions about OpenSea’s claim of decentralization. OpenSea is a centralized NFT exchange company, similar to Coinbase. NFT projects host metadata and content centrally.
Previous exploitation by the management
In September 2021, a high-ranking company employee resigned after being 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 previous NFT heist. A bug in the OpenSea NFT marketplace allowed hackers to steal rare NFTs for much less than their market value.
The hackers then resold them for large profits, pocketing over $1 million. Some believe that while OpenSea does an excellent job of creating an intuitive and secure user interface, it does this at the expense of security.
Supported wallets
OpenSea works well with many crypto wallets. Some are better suited for desktop use, and others are for mobile use. MetaMask is the most widely used wallet on OpenSea.
MetaMask’s popularity among existing and new crypto users is due to its interoperability with virtually all Ethereum-based platforms. The full list of wallets compatible with the OpenSea platform are:
- MetaMask
- Coinbase Wallet
- Trust Wallet
- Portis
- Fortmatic/Magic
- Venly
- Ethereum
- Bitski
- Dapper
- Kaikas
- OperaTouch
- Torus
- WalletConnect
- WalletLink
How to use OpenSea
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 you like, click “Buy Now.” The full price, including all fees, will be displayed. 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 one of the most popular NFT marketplaces 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 and does not support fiat transactions. Overall, though, OpenSea is a good starting point for entering the NFT market.
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investing in NFTs is a high risk activity and can lead to capital loss.
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?
Disclaimer
In line with the Trust Project guidelines, the educational content on this website is offered in good faith and for general information purposes only. BeInCrypto prioritizes providing high-quality information, taking the time to research and create informative content for readers. While partners may reward the company with commissions for placements in articles, these commissions do not influence the unbiased, honest, and helpful content creation process. Any action taken by the reader based on this information is strictly at their own risk. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
