What Is OpenSea?

Ready to start buying NFTs on OpenSea? You'll need to buy NFTs with Ethereum, which can be bought on Gemini!

The non-fungible token (NFT) market has grown tremendously in the past two years. NFT total trading volume surpassed more than $23 billion last year, which is an incredible amount of growth from the $100 million it saw in 2020. As the popularity of NFTs has grown, so has the transaction volume of OpenSea, the leading NFT marketplace. 

Overview of OpenSea

OpenSea is a decentralized marketplace for buying and selling NFTs. It is currently the largest NFT marketplace by transaction volume. Recently, the platform raised a $300 million dollar Series C funding round that valued the NFT marketplace at a $13.3 billion dollar valuation. OpenSea has seen strong growth in the past year, transacting just under $5 billion in NFT trading volume in January of 2022. 

OpenSea’s numbers are impressive considering that the NFT marketplace saw just $21 million dollars in trading volume for the entirety of 2020. A good Web2 comparison to OpenSea would be eBay. Similar to eBay, users of the platform can put up items they wish to sell, and other users have the opportunity to bid on these items. However, in the case of eBay, the goods are physical items while in the case of OpenSea the goods are digital NFTs. The programs that run OpenSea are smart contracts on the Ethereum blockchain rather than programs running on centralized servers. 

Why Do People Use OpenSea?

OpenSea is a popular NFT marketplace for a wide variety of reasons. It provides an intuitive user interface for people to interact with NFTs, which makes selling and buying NFTs a simple process. It provides users an easy way to transfer NFTs, search for NFTs, view other NFTs and see the ownership history of a specific NFT. 

OpenSea empowers nontechnical users to be a part of an industry that just a couple years ago required a high degree of technical knowledge. The platform makes it easy for its customers to mint their own NFTs without technical knowledge or previous experience. Minting your own NFTs used to require programming skills and knowledge of the ERC-721 interface. Now the average Joe or Jane can mint an NFT with ease using OpenSea’s user interface. Additionally, OpenSea makes available a wide array of statistics about NFTs. 

Another reason OpenSea is such a popular NFT marketplace is because of the wide variety of NFTs that are available to purchase. On OpenSea you can find art NFTs, profile picture (PFP) NFT collections, ENS domain names, digital land in the metaverse, in-game items for video games and DAO membership NFTs. OpenSea currently has the largest volume of any NFT marketplace and has available a wide array of goods that may be purchased. 

Some users may also use OpenSea because of its Polygon integration. Polygon is a Layer 2 solution meant to help increase transactions and reduce gas fees on the Ethereum blockchain. Switching between Polygon and Ethereum is easy and intuitive for users on OpenSea. Therefore, it is no surprise that fans of the Polygon network are drawn to OpenSea as their NFT marketplace of choice. 

OpenSea History

OpenSea was founded in 2017 by software engineers Alex Atallah and Devin Finzer. Atallah is a graduate of Stanford University, and Finzer is a graduate of Brown University. The startup was accepted into the world-famous accelerator, Y Combinator, for its W18 batch and received $2.7 million dollars in backing from the accelerator. According to the OpenSea website, the founders were inspired to start the NFT marketplace after witnessing the rise in popularity of CryptoKitties. The company is currently headquartered in New York City and has 70 employees according to its website. 

How to Buy NFTs on OpenSea

Purchasing an NFT on OpenSea is straightforward. Before bidding on an NFT auction, you will need to make sure that you have a cryptocurrency wallet that is capable of interacting with OpenSea. The most popular of such wallets is MetaMask. Afterward, you will need to fund your wallet with Ethereum or Wrapped Ethereum. You can do this by purchasing either of these two assets on an exchange. If you need Wrapped Ether, this conversion can be done on OpenSea. Once this is done, you are ready to start bidding on NFTs on OpenSea. You’ll need Ether to buy NFTs at the buy-it-now price and Wrapped Ether to place bids on NFTs.

OpenSea vs. Other NFT Marketplaces

OpenSea is by far the largest and most popular NFT marketplace. Some of its rival marketplaces include Rarible, Foundation, Art Blocks and LooksRare. Many rival NFT marketplaces are specialized and differentiated to serve a specific customer demographic. An example of this is Art Blocks, which specializes in generative art, and Autograph, which specializes in sports NFTs. 

However, recent frustrations with OpenSea may give other NFT marketplaces an opportunity to win market share. Numerous infamous bugs on OpenSea have cost its users large sums of money. There have also been complaints about OpenSea’s centralization, delistings and control over the marketplace. OpenSea is not a DAO like rivals Rarible and LooksRare. It is important to note that although OpenSea can delist NFTs from being on its platform, it cannot stop these NFTs from being swapped directly on the blockchain or from other NFT marketplaces. 

How to Store NFTs Safely

Getting a Ledger Wallet is a great way to protect your NFT investments. Ledger stores access to your cryptocurrencies and NFTs offline on an external hardware wallet. In contrast, a software wallet is an application you download onto your computer or mobile device. Software wallets are connected to the internet and are referred to as hot wallets. MetaMask is an example of a software wallet. 

Storing valuable cryptocurrencies and NFTs on software wallets is risky because software wallets are more likely to be exposed to scams, hacks and the leaking of your private keys.

Will OpenSea Stay on Top?

Currently, OpenSea is the undisputed leader in the NFT marketspace industry. The platform is an excellent choice of an NFT marketplace for novice users who wish to get involved in the NFT market. Although OpenSea currently has the vast majority of the market share in the NFT industry, it may not maintain its dominance. A good analogy might be the browser wars, where Netscape and AOL were the early leaders but failed to maintain market share from newer, more innovative competitors.