Home NFT News A look at OpenSea’s success and challenges in 2021

A look at OpenSea’s success and challenges in 2021

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OpenSea Metaverse NFT

OpenSea is an online marketplace for NTFs (non-fungible tokens). It is the world’s first and largest NFT marketplace, established by Devin Finzer and Alex Attah in 2017. The NFT sector has grown significantly in 2021 and received tremendous success.

NFTs are digital assets like art, collectibles, memes, real estate, and music, to name a few. They are referred to as non-fungible tokens because their value is independent. This means that they cannot be exchanged for each other. For instance, you cannot exchange digital art and memes since they have incredibly different values. Fungible tokens are like cryptocurrencies and the dollar because you can exchange a dollar for another.

OpenSea is a decentralized marketplace where people can buy and sell NFTs. Since OpenSea is the first NFT marketplace, it is only fair that the platform has also had a great year.

OpenSea’s success in 2021

2021 was a breakout year for OpenSea. The platform saw a transaction volume of more than 14 billion dollars in 2021. In 2020, OpenSea saw a 20.1 million-dollar volume. According to data from Token Token Terminal, the trading volume has increased by a factor of 646 between 2020 and 2021.

OpenSea is the premier destination for trading NFTs. The marketplace has significantly surpassed its competitors with its incredible trading volumes. The second-largest NFT marketplace, Rarible, only handled 260 million dollars of transactions in 2021. This is a fraction of OpenSea’s 14 billion dollars.

Reasons for OpenSea’s success in 2021

One of the primary reasons for the marketplace’s success in 2021 is the overall NFTs trading volume surge. The NFT market has seen a lot of success in 2021. For instance, many people have discovered the market and what it is all about. Investors have also developed an interest in NFTs in 2021. Investors see long-term value in NFTs, and they believe that their value with appreciation over time. This has prompted many NFT buying and selling in the past year. Another reason for the popularity of NFTs is that they offer a sort of social status in the crypto space. Like other assets like expensive cars and jewelry, owning NFTs is a sign of social status that has encouraged their massive transaction. NFTs have seen a record-breaking year and boasted billions in trading volume thanks to these elements. OpenSea has significantly benefited from this because it is the largest NFT marketplace.

Another reason OpenSea has seen a great year is because of the popularity of the Bored Ape Yacht Club collection. This collection was established in April and started a new NFT animal avatar project. The success of this collection significantly contributed to OpenSea’s ground-breaking transaction volumes. Since its launch, the project has registered a more than 1.06 billion trading volume. This is around 6.3% of OpenSea’s overall trading volume. It is worth mentioning that the launch of Bored Ape was encouraged by the success of CryptoPunks, the original generative avatars. While Bored Ape has seen incredible success, it is still a long way from reaching CryptoPunk’s level in terms of the trading volume. CryptoPunk has a current trading volume of 2.92 billion dollars. While this can be attributed to the lower prices of ETH at the time of CryptoPunk’s launch, it is still worth consideration.

OpenSea’s success can also be attributed to the recent boom in Metaverse projects. Decentraland, one of the latest and most successful online Metaverse projects, is the second most traded collection on OpenSea. It contributes around 933 million dollars in trading volume.

How much profit has OpenSea made

In addition to witnessing record-breaking transaction volumes, OpenSea also made significant profits in 2021. OpenSea takes a 2.5% profit from every NFT transaction. Therefore, the marketplace made 2.5% of 14 billion dollars, more than 351 million dollars worth of earnings in 2021.

It has not been all good

While OpenSea has seen one of the best years since its establishment, the year has not been free of challenges. The marketplace has been at the core of some controversies. For instance, the marketplace’s head was exposed for insider trading. This expose led to his resignation. This caused the marketplace to face plenty of criticism. OpenSea was also criticized when Brian Robert, its current CFO, alluded to it going public via an initial public offering. Its users were significantly disappointed that the platform would be abandoning them. There have also been issues surrounding the platform’s high commission on trades.

Final Word

Thes issues above have prompted efforts to establish a more decentralized NFT marketplace to compete against OpenSea. However, no worthy opponent has come close to taking OpenSea off its throne so far. Therefore, the platform is still on route to another big year in 2022. According to experts, the incredible success in 2021 has paved the way for what could be a more significant year for OpenSea. This is because most of its revenue was generated in its last quarter (August to December). This means there are high chances that the platform will experience a similar or bigger year in 2022. It is impossible to tell what the outcome for 2022 will be. However, it is safe to say that OpenSea is set to remain at the top of its game.

Sources

  1. https://www.cnbc.com/2021/10/06/nft-trading-volume-hit-10-billion-2-reasons-why-people-are-buying.html
  2. https://phemex.com/academy/what-is-opensea-nft
  3. https://cryptobriefing.com/opensea-saw-a-646x-increase-in-trading-volume-in-2021/

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