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OpenSea

OpenSea is an online marketplace for buying and selling Non-Fungible Tokens (NFTs). The company is located in New York City and was founded in 2017.

OpenSea is a verified Brave (web browser) publisher. 

In July 2021, OpenSea announced cross-blockchain support, starting with a gas-free marketplace on the Polygon blockchain. Buyers no longer have to pay blockchain fees when making trades on OpenSea, and creators can fully earn their way into crypto for the first time.

OpenSea has become the latest crypto unicorn after it announced a $100 million Series B funding round led by venture capital firm Andreessen Horowitz at a valuation of $1.5 billion. 

Overview

Founded in November 2017 by Devin Finzer and Alex Atallah, OpenSea is the world's largest digital marketplace for crypto collectibles and Non-Fungible Tokens (NFTs), including ERC721 and ERC1155 assets. It offers the ability to buy, sell, trade, and discover exclusive Digital assets on the Ethereum blockchain

Users can create their own customizable marketplace using the OpenSea software and set their own fees for their sales. The projects must be ERC-721 compliant to be sold in the marketplace. Users can create auctions for items with any cryptocurrency of their choice. They must submit a contract on the platform in order to get their auction started. The application programming interface can show users market data with statistics and insights in the form of graphs so that users can see how their digital assets are trending. Users can sell their assets in packs, airdrop rewards to customers if so desired, and create lootboxes. 

The platform remains one of the largest general marketplaces for crypto-collectibles like CryptoKitties, Decentraland, Ethereum Name Service (ENS), Ethermon, Enjin, Gods Unchained, Axie Infinity, and many others. 

The team comes from backgrounds such as Google, Pinterest, Stanford, and Palantir, funded by Blockchain Capital, Y Combinator, Coinbase, Founders Fund, Blockstack, and 1Confirmation. 

On top of buying, selling and trading, the platform allows its users to use the bounty system called Affiliate Program that would earn users a standard fee of 1%, although this 1% can be increased to 2.5%. 

In October 2020, Messari Crypto conducted research that tracked the demand for NFTs, which includes digital art, collectibles, and in-game items, over the third quarter. It found the cumulative number of users who interacted with OpenSea surpassed 25,000 and that the platform saw a record of $2 million in total volume in September.

Previously, OpenSea was restricted to Ethereum, the popular cryptocurrency platform that has been criticized for using a lot of computing power and wasting energy. In July 2021, OpenSea added transactions on the Polygon (formerly Matic Network) platform, which enables transactions with no huge transactions fees related to computing usage. Over time, the company wants to lower transaction costs across platforms (as it has done with the addition of Polygon), enable people to use whatever payment method they have, and then educate the market about NFTs. Users can use any crypto wallet they want with OpenSea.

  Beyond Polygon, OpenSea has plans to integrate with Dapper Labs' Flow blockchain, as well as Tezos.

In June 2021 alone, OpenSea sold $160 million in digital assets on its NFT marketplace, and it experienced a 45 times increase in volume growth during the first half of 2021 from just $8 million in sales in January. High-growth collectible avatar projects like Hashmasks, Bored Ape Yacht Club, and Meebits, which combine elements of art, blockchain tech, and social clubs, have also taken off on OpenSea in 2021. 

Developer Partnerships

OpenSea partners with developers to power their marketplace directly on OpenSea's infrastructure. This allows developers to focus on the core functionality of their Decentralized application (DApp) while benefiting from peer-to-peer trades on the marketplace as they receive a secondary sale fee any time one of their items is sold on OpenSea. OpenSea is currently the primary marketplace for Cheeze Wizards (a new game from Dapper Labs), MyCryptoHeroes (a Japanese RPG), the officially licensed Formula One racing game from Animoca Brands, and many others. 

In September 2020, OpenSea announced that OpenSea data was integrated on the Roll app for creator rewards. This allowed users to view Opensea listings for NFTs available in a particular creator’s social money on their respective rewards page. OpenSea allows artists to add their currencies as a payment option on their storefront by filling out a simple form. Once the NFTs are listed for sale, buyers can purchase the items using a Web3 wallet like MetaMask. To get hold of an artist’s social currency, users can earn on Roll or purchase it from an exchange like Uniswap if it’s traded. A few examples of social money issuers trading NFTs on OpenSea include:

  • HUE from Connie Digital, an artist at the intersection of technology, music, and digital art. An early social money pioneer.
  • SKULL from Skeenee, a Madrid-based tattoo artist with signature pieces featuring skulls and anatomy. One of Roll’s most active social money users.
  • WHALE from WhaleShark, one of the largest and most prolific NFT collectors in the industry. 

Architecture

OpenSea is powered by the Wyvern Protocol, a set of robust Ethereum smart contracts specifically designed for buying and selling unique digital assets. 

Collector Drops

In June 2020, the platform announced OpenSea Drops - new and exclusive NFTs launches. 

Shawn Mendes

In February 2021, Canadian singer Shawn Mendes agreed to issue digital wearables on OpenSea in partnership with avatar company Genies. Mendes' collection of concert-style collectibles debuted on OpenSea on February 26, becoming the digital auction house's first "digital goods drop." For his part, Mendes said proceeds of the sale would benefit a grants program for aspiring digital artists that his charity, Shawn Mendes Foundation, is backing. Mendes plans to incrementally release more Non-Fungible Tokens (NFTs) as his career develops. 

This is what Mendes said about the collection:

“Inspired by my Wonder album, I’m dropping collectible Genie Moments to raise funds with an aim to amplify, uplift, and empower young digital artists who are using their talent to create positive, social change. I’ll be donating the profits from all collections to support the efforts of the Shawn Mendes Foundation, including our Wonder Grants program and a new pool of grants we’re launching with Genies to support young digital artists. We’re hoping this drop will enable young creators to prosper. In this drop, you can contribute to that cause while unlocking rare Wonder digital wearables for your own Genie." 

Funding

In November 2019, OpenSea received a strategic investment of $2.1 million from Animoca Brands, gumi Cryptos, Stanford StartX, and David Pazdan from MetaMask. Many of the platform's existing investors also contributed alongside these strategic partners, include 1Confirmation, Blockchain Capital, Brad Flora from Y Combinator, and Dylan Field from Figma.

In March 2021, OpenSea announced their $23 million fundraise led by Andreessen Horowitz. Innovative angel investors and leaders such as Naval Ravikant, Mark Cuban, Tim Ferriss, Belinda Johnson, Ben Silbermann, Alexis Ohanian, and Balaji Srinivasan; crypto natives Standard Crypto, Linda Xie, Avichal Garg, and Flamingo DAO; creators like 3LAU, RAC, and Justin Kan; and NFT thought leaders like Andrew Steinwold, Metapurse, and Bill Lee were also taking part in the round. The platform's existing investors, including 1Confirmation, Pascal Capital, Blockchain Capital, Regan Bozman, Kevin Hartz and Dylan Field from Figma, continue to provide their support through their participation in this round. 

In July 2021, OpenSea announced a $100 million raise led by Andreessen Horowitz, with participation from Coatue Management, along with Michael Ovitz, Kevin Hartz, Dylan Field, Kevin Durant, Ashton Kutcher, and Tobi Lutke. 

 The funding amount means that OpenSea is a unicorn or startup with a $1 billion valuation, and joins a long list of crypto unicorns such as Coinbase, Animoca Brands, and Chainalysis to name a few.  With this capital, OpenSea will continue to scale its NFT platform, with an immediate focus on hiring engineering talent, expanding internationally to new markets and audiences, and overall making more ways users can easily access, buy, and sell digital assets.  Kathryn Haun, a general partner at Andreessen Horowitz will also be joining OpenSea's board of directors. 

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