The NFT marketplace OpenSea has been valued at $13 billion in its latest funding round. This has come with the simultaneous growth of the NFT world. Let’s go over what is it, how it is used and how it works.
Non Fungible Token (NFTs) has been the foster kid for innovation in the digital art world. With the growing interest in NFTs, a lot of firms have also grown alongside it. There has been immense value that has been created around NFTs. One such example is NFT marketplaces. These marketplaces provide selling, buying and trading opportunities to interested buyers of NFTs. OpenSea is also one of them.
What is OpenSea?
OpenSea is the first and the largest decentralized Non-Fungible Token (NFT) marketplace in the world. It was founded in Jan 2018 by Alex Atallah and Devin Finzer. The platform was created to facilitate buying, selling and trading of NFTs. The NFTs can vary from crypto art or collectables to domain names or game items or even digital representation of physical assets. In a nutshell, OpenSea is the eBay for NFTs. The platform gained traction after seeing CryptoKitties NFT in action. Since then, the platform has seen significant growth.
How to use OpenSea?
In order to participate on the platform, you will be required to have a working wallet like Metamask. This is the address on the blockchain where what you buy and have as cryptocurrencies are stored. Since the platform merely facilitates the peer-to-peer exchange of NFTs, you need a place to store your possessions. Next, you will need some ETH to pay for transactions costs. Once, you have your wallet and some ETH in it. You can start buying, selling and trading on OpenSea. When you are about to sell your NFT you will have the option of going ahead with a few auction styles. For example, Fixed Price, English Auction or Dutch Auction listings. The bidding starts once you hit the sell button.
How does OpenSea work?
The trading/selling process on OpenSea is a minimal trust operation that works on smart contracts. Therefore, you do not need to trust either the platform or the counterparts. Moreover, transactions on the platform are “binary” in nature, meaning either the whole deal happens or it does not. However, unlike eBay where the buyer pays the seller before the shipment. On OpenSea, both buyers and sellers make a binding process to transact at a price and the deal takes place simultaneously. This is because OpenSea uses a set of smart contracts called “Wyvern Protocol”. Wyvern Protocol enables users to change NFT ownership with cryptocurrency ownership.
The growth and valuation
OpenSea has been a significant growth along with the general growth of the digital art economy. Very recently, the platform was valued at $13 billion after closing a $300 million funding round. The hedge fund Coatue Management and the web3 investment firm Paradigm led the funding round. Another crucial participant was Kathryn Haun, a former partner at Andreessen Horowitz.
OpenSea has was valued at $1.5 billion last year. The $13 billion figure in one year is quite a significant growth achievement. This has been an unprecedented growth story. However, this growth is not hollow and can be backed up by substance. OpenSea had $2.4 billion monthly transaction volume and millions in daily transaction fees.
The funding will be used for improving customer support, hiring, and product development. Moreover, OpenSea will make more investments in the NFT and Web3 community to help developers and creators alike. OpenSea will play an instrumental role in helping the NFT ecosystem grow.