In five years of existence, OpenSea has become the first NFT platform in the world. Its co-founder, Devin Finzer, analyzes the current crisis in the sector and gives his vision for a market still in its infancy.
JDN. OpenSea is often presented as an “eBay for NFTs”. Does this comparison seem fair to you?
Devin Finzer. It’s really a simple way to describe the activity ofThe open sea which is the standard marketplace for discovering, buying and selling NFTs. Inspired by the CryptoKitties show, we started The open sea in 2017 starting on the Ethereum blockchain. Since then, our market has opened up to other ecosystems blockchain including Polygon, Klaytn, Solana, or even later Avalanche. OpenSea initially focused on the secondary market by allowing anyone to list and resell NFTs.
Today, our activity also integrates the primary market, allowing creators, brands or even video game designers to launch and fully manage their NFT projects. From this perspective, OpenSea can now rather be considered the Amazon of NFTs.
The NFT market has fallen more than 90% since its peak last January. What is the impact on the activity of Opensea, which had more than one million active wallets at this time?
Trading volumes have actually fallen. The current numbers are somewhat healthier as they are now less affected by market fluctuations. It is also an indication that prices have fallen. But despite everything, we notice that a significant number of people remain enthusiastic about this economy NFT. The other important thing to note is that the crypto universe is a new macro-environment that seems to work in cycles. We are convinced that we are only at the beginning of the adoption of NFTs.
Have you observed an evolution in OpenSea user profiles since this sudden drop?
NFT buyers have very different profiles. Those interested in art will turn to NFTs of the “collective” type. There are also video game enthusiasts. Today we are seeing many new projects in this sector. Start-ups Web3 in the gaming industry have raised billions of dollars and are currently working on designing video games that will integrate NFTs into their virtual economies. Some of these games will take years to develop. All these investments in the NFT sector make me think that many interesting projects should appear in the market within a few years.
Do you believe that the high speculation about NFTs is behind us? Will this market decline mark a turning point in the type of NFTs traded on OpenSea?
OpenSea was originally launched with NFT collections. This is the simplest use, namely holding and collecting a digital object. I remain convinced that digital art remains an interesting market. It’s not that different from the traditional art market, where some collect works just for fun. However, we intend to offer other types of NFTs that integrate different uses. I can give you the example of the Veefriends collection created by the American influencer Gary Vaynerchuck. These NFTs are actually entry tickets that allow entry to her Veecon conference and exchange with the community. Another example with The sandbox which offers to buy virtual land in NFT. You can then build what you want there or monetize these spaces by renting them out or charging admission. These are just a few examples, even if many uses have not yet been invented.
Some players, such as The Sandbox, advocate interoperability between Internet platforms to allow better use of NFTs. How far are we?
One of the first popular NFT projects to be referenced on OpenSea was Cryptokitties in 2017. Several people then started building experiments around this collection to give them additional use. For example, a video game has been created that allows you to race your Cryptokitties. This translates into the promise of these digital assets to be used on different video game platforms and thus have different experiences. Many players are working on the infrastructure that will in the future make it possible to use their NFTs from one platform to another. I am very enthusiastic about this idea.
Twitter, Reddit and Instagram have integrated NFTs into their platforms. An aid to promote adoption of NFTs to the general public?
“Twitter, Reddit and Instagram integrations logically contribute to accelerating the adoption of NFTs”
Really. The fact that a platform like Reddit hosts collections of NFTs has made it possible to familiarize millions of people with the functionality and utility of a wallet in record time. Will NFTs necessarily reach all audiences? It is less certain. The Internet no longer reaches all audiences. However, it seems clear to me that there will be an increasingly mass adoption of NFTs by already web-savvy populations, such as the Reddit user community. These integrations from Twitter, Reddit or Instagram logically contribute to accelerating the adoption of NFTs. We are also in direct and regular contact with all these platforms they useAPIs of OpenSea to facilitate these integrations.
Apple said the commission rate applied to NFT sales transactions made through the app store would be 30%, much higher than the 2.5% charged by OpenSea. Could this represent a drag on the adoption of mobile NFTs?
In a sense, Apple’s announcement is a positive step forward in terms of recognition for the industry as the company allows access to applications for exploring and trading NFTs. So it’s going in the right direction. On the other hand, the in-app purchase method now exhibits some limitations, especially in case of high commission costs. But we’re excited to talk to Apple to see how we can encourage the development of this NFT economy and make sure we don’t put too much of a burden on users. All this is recent and therefore there is still work to improve the rules in force.
What is your advice to creators who want to launch an NFT collection on OpenSea?
The first thing I recommend is to discuss upstream with the community and see what has been created in the past. The NFT community is very active on Twitter and therefore the platform is the tool of choice to understand the motivations of a community and analyze what is popular. In the case of NFT-type collecting, the methods are quite similar to those of the art world. It is important to work within the envelope of a project, meaning storytelling and marketing, but also to offer something new. Trying to replicate existing collections doesn’t work and won’t attract potential buyers. Therefore, it is important to think from the beginning what you want to create, how you will reach potential customers, which artists it is possible to collaborate with, etc.
After raising $300 million in Series C last January for a $13.3 billion valuation, is an IPO planned for 2023? What are OpenSea projects?
An IPO is not planned for 2023. We want to continue building a user-friendly marketplace to allow anyone to experiment with NFTs. Our second objective is to build a relationship of trust with our users. That’s why we want to make sure we give visibility to the best NFT projects and don’t rate the bad ones. Finally, we will continue to expand our inventory by opening different blockchains. We want to cover the ecosystem as a whole.
What would you say to those who are skeptical of NFTs and the Web3 ecosystem more broadly?
A few years ago, you had to persuade the most skeptics with words, making them imagine what the future might look like. Today it is already possible to test concrete projects in the Web3 sector. Whether with The Sandbox in the metaverse sector, with OpenSea in digital art or even trying to create a portfolio to understand how it works. So my advice would be to just try out these new tools and platforms. We should also remember the beginnings of the Internet. There were a lot of useless websites back then where there wasn’t much to do. We’re at the same point here, and it’s important to understand that the Web3 ecosystem and its uses will grow over time.
Devin Finzer is the co-founder and CEO of OpenSea, the leading marketplace for discovering and trading NFTs. Passed by YCombinator, the start-up, which now employs 250 people, counts among its investors a16z, Paradigm or Coatue. Prior to that, Devin created a fintech app called Claimdog (acquired by Credit Karma) and worked as an engineer at Pinterest. He graduated from Brown University.