OpenSea, in particular, has established itself as one of the go-to websites for buying, selling, and minting NFTs. The platform has attracted NFT issuers and digital artists in their numbers, such that there is always a wide variety of NFT offerings available for purchase. As such, the probability that new entrants will stumble upon the OpenSea site is high, which is why we have decided to create an extensive guide on how it operates. Here, we will explore the workings of OpenSea and highlight its strengths and weaknesses.
What is OpenSea?
OpenSea was launched by Devin Finzer and Alex Atallah in 2017 as an Ethereum-based marketplace for trading non-fungible tokens. Those familiar with the history of NFT would know that 2017 was a monumental year for the crypto market as a whole, particularly the NFT sector. Note that 2017 was the year Ethereum launched the ERC721 token standard that has since been the popular NFT framework for developers. Following the launch of this token standard, there was an explosion of NFT games and platforms designed to enable a gaming economy where users can take outright ownership of in-game assets.
Remarkably, OpenSea was one of the few platforms that identified the possibility that NFT unlocked at the time. It is also commendable that the marketplace has adapted seamlessly to the fast-paced NFT market. For instance, in the early years of its operation, most of the activities recorded in the NFT market were associated with gaming platforms. However, the NFT community has since shifted its attention to digital arts and collectibles. And despite this dynamic shift in market trends, OpenSea continues to thrive. This is because the team has a knack for adjusting to new trends as at when due. For those at OpenSea, the goal is to deliver customer-centric services amid the market-wide experimentation that has birthed thousands of NFT offerings.
In other words, the unique thing about OpenSea is that it is always reinventing itself to meet the demands of the ever-expanding NFT community. Also, its business framework has helped its case. In an industry where decentralization is viewed as the ultimate feature, there is always a good chance that quality, intermediate-free platforms would excel. Therefore, it comes as no surprise that the decentralized nature of OpenSea has resonated with the crypto community at large. For those unfamiliar with the term “decentralization,” it simply means that the system in question does not entail a centralized service like an intermediary or middleman. In essence, users interact with smart contracts which independently automate the process involved in rendering services. In the case of OpenSea, users carry out all of the trading and minting processes via a blockchain-based protocol. It is a combination of self-sustainable infrastructure tailor-made to facilitate NFT trades.
Below are some of the things you need to know before you go ahead to use OpenSea.
Since OpenSea is decentralized, it has to exist on a blockchain infrastructure to operate. The type of blockchain that a marketplace supports would determine the type of NFT and cryptocurrencies it can interact with. Hence, we always advise investors to consider information like the blockchain that the NFT marketplace in question supports before attempting to use it. This will give you an idea of the type of cryptocurrency you can get in exchange for your NFTs, how affordable the transaction fees will be, and much more. That said, here are the blockchains that OpenSea supports:
Polygon (previously called Matic)
How to create an NFT on OpenSea
First things first, you have to create an account before you can start enjoying the services of OpenSea. You will have to connect your NFT-compatible wallet.
To initiate this process, head to the top corner of the OpenSea website and click “Profile” to start the registration process. From there, you will be directed to a page where you will connect your wallet. After connecting your wallet, you can go ahead to personalize your profile by adding an account name. Once this is done, you are ready to create your first NFT.
To create an NFT, go to your profile icon and select “Create.”From here, you will be taken to the NFT creation page where you can upload your file, give it a name and add a description. You can further customize the NFT by giving it special traits or adding to an existing collection.
After customizing your NFT, click “Create” to complete the process.
How to sell NFTs on OpenSea
Now that you have created an NFT, it is time to sell it on the marketplace.
To do this, navigate to your profile and select the NFT you want to sell from your wallet.
Once you click “Sell,” you will be taken to the listing page where you can set a price or choose the type of sale you prefer. Here, there are two options: You can choose a fixed price or opt for a timed auction. You can as well choose the duration of the sales.
If this is your first sale on OpenSea, you may have to initialize your wallet before you can complete this process.
Once this process is completed, you will receive a pop-up confirmation, from where you can share your listing on social media.
How to buy NFTs on OpenSea
You can also buy listed NFTs on OpenSea. All you need to do is select the NFT of your choice to confirm the authenticity of the NFT. Depending on the type of sales, you can either make an offer or pay the fixed price requested by the seller. Once you pay the fee or emerge as the winning bid, the NFT will be transferred to your wallet.
Are there fees you need to pay?
Listing NFTs on OpenSea attracts a 2.5% fee. An extra 10% is charged when the NFT issuer implements a royalty clause. For executing transactions, you have to pay network fees which will be determined by the blockchain where the transaction is to be executed. However, there is the possibility of accessing a transaction fee-free service by utilizing the Polygon blockchain. OpenSea calls this the gas-free service as users can mint, sell and buy NFTs without paying a fee.
What are the pros and cons of OpenSea?
OpenSea is decentralized
As mentioned earlier, OpenSea is a decentralized NFT marketplace. Therefore, it does not store crypto on behalf of its users. In a way, this allows users to avoid security risks associated with exchanges and other custodial-based services. Here, users do not have to subject their crypto holdings to the security system of service providers.
OpenSea attracts a large volume of NFT sales
OpenSea has maintained its status as the most active NFT marketplace, thanks to its propensity to evolve with market trends. Since it launched in 2017, it has facilitated some of the largest NFT sales, with over $3.4 billion worth of NFTs traded on its platform in August 2021 alone.
It is easy to use
It is commendable that OpenSea has opted for a simple interface. By doing so, users can easily navigate the website such that minting and trading NFTs can be done with a few clicks of the button. It also helps that OpenSea provides users with filtering tools for fast navigation. Users can also use the search bar if they know the name of the NFT they wish to buy.
It supports more than one blockchain
OpenSea became a cross-chain platform when it expanded its services beyond the Ethereum layer 1 ecosystem. Now, users can buy Polygon or Klatyn-based NFTs. The availability of options makes OpenSea a more versatile option. It also allows users to avoid some of the flaws of Ethereum. Note that Polygon is a scalable layer 2 solution that allows users to make almost instant and less energy-consuming transactions.
OpenSea offers gas-free activities
Those familiar with the crypto industry will know about Ethereum’s dilemma, as network congestion often causes transaction fees to increase significantly. As such, trading and minting NFTs, particularly the Ethereum-based ones, are sometimes too expensive for the average investor. Therefore, it is an applaudable development that OpenSea offers gas-free NFT services. This is possible because it has capitalized on Polygon’s ability to offer zero transaction fees.
OpenSea provides quality customer support
One thing we notice while exploring the OpenSea platform is that it provides a wide array of documents to help its users understand its features and processes. Simply put, it is a very robust FAQ section and a blog that details some of the latest developments in the NFT market. If the information on the blog and FAQ section does not answer your queries, then you can send an email ticket or settle for the platform’s chatbot.
OpenSea has an app
Another interesting thing about OpenSea is that it has developed mobile apps compatible with both Android and iOS devices.
The cons of OpenSea
It has suffered some security and credibility scares
In September 2021, OpenSea admitted that some of its employees were guilty of taking part in an insider trading scheme. In October, 2021, it was revealed that the platform had fixed a vulnerability that could have allowed attackers to steal users’ NFTs. Such incidents prove that using OpenSea is not entirely risk-free.
You can only buy NFTs with crypto
People new to cryptocurrency may have a hard time getting to grasp how OpenSea works. They have to first demystify the concept of cryptocurrency before going further to understand how NFTs work. As such, it is understandable if these people opt for centralized NFT marketplaces that let them buy NFT directly with fiat currencies.