OpenSea

OpenSea — Buy and sell NFTs

Basics

• Based in:
• Founded in: 2017
• Mainnet release:
• From the CoinDesk 50:

"Founded by former Pinterest engineer Devin Finzer, OpenSea has developed into the Etsy of crypto. The idea of scarcity of digital items was once unthought of, but now the largest general marketplace for crypto collectibles features more than 300 categories and over 10 million such items. Anything from CryptoKitties to artworks and game pieces can be trustlessly bought and sold by users from around the world. Having dominated the non-fungible token market, OpenSea is seeing traction outside of the crypto ecosystem by expanding into asset classes like domain names, software licenses and even physical assets."

History

• From Decrypt (18-3-2021):

"OpenSea was founded in 2017, as a product of Y Combinator’s startup accelerator program."

Audits & Exploits

• Bug bounty program can be found [insert here].

Bugs/Exploits

• From Blockthreat (14-9-2022):

"Report on a memory overwrite vulnerability in OpenSea’s Wyvern Protocol by the BlockSec team."

• From Blockthreat (20-6-2022):

"OpenSea patched a critical vulnerability which could allow theft of offered WETH from users’ wallets thanks to a responsible disclosure by Gus.

OpenSea patched a vulnerability which could allow sellers to receive payments for Shared Storefront items they did not own. The vulnerability was responsibly disclosed by MevRefund."

• From Week in Ethereum (11-6-2022):

"OpenSea Wyvern vulnerability disclosed, $3 million bounty paid."

• From Decrypt (29-1-2022):

"OpenSea has now reimbursed 750 Ethereum, about $1.8 million, to users who accidentally sold valuable NFTs at well below their going market rate through an exploit involving “inactive listings.” Recently, several users of the leading NFT› marketplace had complained that their blue chip NFTs, such as those belonging to the Bored Ape Yacht Club (BAYC) collection, had been purchased at old, cheap listing prices. These listings were never canceled on the blockchain, even though the user interface on OpenSea suggested that they had been."

• From Blockthreat (2-11-2021):

"OpenSea patched an actively exploited XSS vulnerability in its marketplace after it was disclosed by Check Point. The vulnerability allowed attackers to execute JavaScript code and interact with users’ wallets by airdropping specially crafted NFTs."

• Their Head of Product Nate Chastain got caught with his hand in the cookie jar (17-9-2021):

"OpenSea has parted ways with Nate Chastain, its former head of product, after the executive was discovered profiting from the trade of NFTs based on inside information."

Governance

Admin Keys

• From Decrypt (31-12-2021):

"After a collector said he lost his NFTs in a phishing attack, the top NFT marketplace reportedly stepped in to help him recover the assets. Kramer later said tweeted that “All Apes are frozen” and that OpenSea, the biggest NFT marketplace, was helping him recover his stolen assets." The collector also mentioned that he had not been using a hardware wallet.

Tech

• Whitepaper can be found [insert here].
• Code can be viewed [insert here].
• Built on: Ethereum and Immutable X (1-4-2021). Deployed on Klaytn (Q2'21). As of 12-2022 has deployed on 8 chains, including Avalanche, BSC, Solana, Polygon and L2s. Arbitrum Nova (18-1-2023).

Fees

• OpenSea dropped fees to zero (for an unspecified time) and made royalties optional (0.5% minimum) unless on-chain enforced, marketplaces with the same policies won’t be blocked (18-2-2023). This came as a reaction towards Blur taking huge marketshare.

Compliance

• From The Defiant (1-6-2022):

"Nate Chastain, the former head of product at OpenSea, left under a cloud after it was discovered that he purchased NFTs before they were featured on his former employer’s homepage and subsequently sold them as the increased exposure led to higher prices.

Now, the U.S. Attorney’s Office for the Southern District of New York has issued a statement that Chastain was arrested on June 1 in New York City. The FBI will charge Chastain with one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison."

Roadmap

• Can be found [Insert link here].

Usage

• From The Defiant (16-2-2023):

"Since its public launch in October last year, Blur has positioned itself as the most promising competitor to OpenSea and an ideological rival. OpenSea has long dominated the NFT market, but Blur has recently gained ground on the back of an airdrop campaign geared towards incentivizing usage of the platform. Since December, trading volume on Blur has topped that of OpenSea in all but two weeks, according to data gathered by Hildobby, a pseudonymous data analyst at crypto venture capital firm Dragonfly. It should be noted, however, that OpenSea still maintains a commanding lead in terms of active users despite the surging volumes on Blur."

• From The Defiant (17-8-2022):

"OpenSea’s trading volume plunged to its lowest level in 13 months on Tuesday. OpenSea, the No. 1 NFT marketplace, handled $6.5M worth of trades, a fraction of the $204M executed at its peak in February, according to data from DappRadar."

• From Kerman Kohli (4-8-2022):

"TokenTerminal data for this one is a little off but they’ve done about $300m in revenue in the past 180 days. As of the 1st of August they have about 750 employees (on LinkedIn) but let’s just round up to 1000 and assume each employee costs $150,000 (on the upper end) we get to $150m/year in headcount. Given their annualised revenue is north of $500m they’re still going to be fine. I don’t know how bear markets have changed but I’m guessing laying off 20% of their staff was part of making sure they were sustainable. Oh just one problem, they don’t have a token. Congratulations OpenSea equity holders, you have a winner."

• From Our Network #29 (10-7-2020):

"In a snapshot from June of the top categories traded, virtual world projects (such as Decentraland, CryptoVoxels, the Sandbox, and Somnium Space) were the highest volume projects on OpenSea, followed by art and digital trading cards."

Pros and Cons

Cons

• Their Head of Product Nate Chastain got caught with his hand in the cookie jar (17-9-2021):

"OpenSea has parted ways with Nate Chastain, its former head of product, after the executive was discovered profiting from the trade of NFTs based on inside information."

Team, Funding, Partnerships, etc.

Team

• Full team can be found [here].
• Devin Finzer; founder
• Alex Atallah; co-founder, left company, remain on board (2-7-2022).
• During the 2022 market crash it announced it would lay off 20% of its staff (15-7-2022).
• CFO Brian Roberts has left the company less than one year after joining (8-10-2022).

Funding

• Is part of the portfolio (9-3-2020) of 1confirmation. Which also has Authereum in its portfolio.
• From Decrypt (18-3-2021):

"Raised $23M. The round was led by Andreessen Horowitz. Dallas Mavericks owner (and Ethereum enthusiast) Mark Cuban, angel investor Naval Ravikant, and Metapurse—a fund from the pseudonymous NFT investor MetaKovan—have also invested in the company."

• OpenSea has reached a $1.5B valuation after a $100M Series B funding round led by a16z (21-7-2021).
• OpenSea has closed a $300 million Series C funding round that values the company at $13 billion (4-1-2022).
• Joined in the Series B for 0x Labs (26-4-2022).
• One of the founding backers of Coop Records (9-9-2022).
• Had funding from Animoca (according to Coindesk, 5-12-2022)
• LayerZero; OpenSea participated in their Series B of $120M (4-4-2023).

Partners 

• OpenSea Innovation Labs Private Limited became one of the trusted companies to store tx for Arbitrum Nova (15-3-2023).
• Partnered with Klaytn to grow the NFT ecosystem in Asia (Q2'22).
• Used by and partners with Authereum (12-2-2020).

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