did you hear that several NFT's worth hundreds of thousands of dollars have been selling for a
fraction of their price on OpenSea the error saw yet another wave of negative publicity crashed
down onto the world's foremost NFT marketplace if you followed OpenSea's rise to dominance you'll
know that this most recent wave was hardly the first crash onto open seas hall and it looks like
it might swallow the platform hole and yet OpenSea hasn't been capsized run aground or been dragged
underwater by the weight of this damaging press in fact having been recently valued at 13 billion
dollars and hosting more than 600 000 users OpenSea appears on course to continue dominating
the nft space in january alone OpenSea reached a record 4.9 billion dollars in trading volume
if you've ever wondered how did OpenSea chart a course to such extravagant success or will
it be able to weather out this latest storm of negative publicity then keep watching because
today we're looking at the history of OpenSea and how a platform that nearly folded eventually
found success in the nft space but first my name is Trev and here at coin market cap we are on a
mission to make crypto accessible all around the world and that's why we love making videos for you
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out on our new videos and let's learn together about the history of OpenSea it seems like every
day we see another celebrity either buying a board ape nft or launching their own nft collection from
socialite paris hilton to legendary boxer mike tyson corporations too like taco bell budweiser
and the nba are trying to get in on the action and for good reason bloomberg estimates that at
the end of 2021 the global nft space had grown from a tiny niche into a gargantuan industry
worth 40 billion dollars and right at the center of it is open c so what is OpenSea when measured
by user base and sales volume OpenSea is by far the largest marketplace for trading nfts
it hosts several of the most coveted and costly nft collections including the board apes yacht
club and cryptopunks among others OpenSea also features permissionless listings so there's
no entry criteria or censorship which makes onboarding much easier for up-and-coming artists
OpenSea has a huge array of asset types split into key categories like art music sports or
trading cards it has a number of user-friendly features as well allowing you to filter through
each collection by category price status rarity or by which blockchain it sits on you can search
through some collections like the board apes by physical or artistic attributes like hats eyes
fur or background pattern OpenSea is well funded through a network of vc firms and angel investors
including the dallas mavericks owner and legendary investor mark cuban Alex Ohanian
a co-founder of reddit and a number of celebrity investors as well including hollywood actor
ashton kutcher and nba star Kevin Durant so how does OpenSea work in practice buying nfts from
OpenSea's marketplace works much like buying a physical product from any other marketplace
like ebay the only meaningful difference is that the record of all nfts bought and sold on OpenSea
is stored on the blockchain so you only pay a 2.5 percent transaction fee compared to the 10
or more that you pay on ebay to upload an nft to OpenSea you can use one of several wallets but
most users prefer using metamask when buying nfts from a desktop and coinbase wallet on mobile once
you've connected a wallet hit create and then upload your content you can then customize it
however you want by adding textual traits and different levels as well as stats descriptions
and even unlockable content and of course you can also pick which blockchain you want to upload your
nft to you also need to pick which of OpenSea's three supported blockchains you want your nfts to
sit on ethereum polygon and clayton keep in mind that by uploading on polygon you'll save yourself
a bunch of money on gas fees and if you're looking to buy an nft on OpenSea you can first check its
purchase history including how many times it's been sold who bought it and for how much if you're
looking to browse then check out the OpenSea app so now that we're all caught up on what OpenSea
is and how its marketplace works let's take a look at where it came from for open c the story
starts with the meteoric rise of cryptokitties a blockchain based crypto game where you can buy
and breed digital cats the game was an immediate hit making headlines across the world and it's
widely considered to be the catalyst for nft's current success and while cryptokitties would have
been easy to ignore computer science graduates Devin Finzer and Alex Atallah saw immense value
where most others did not but it wasn't actually the game they were interested in it was nfts
at the time nfts were mostly dismissed as a fad or a minor technical novelty one not worth paying
much attention to and would likely dissolve into obscurity within a few years of course
we all know now that nfts would eventually hit the mainstream just four years later but developing an
nft marketplace at that time was undoubtedly a revolutionary and pioneering move finzer's
entrepreneurial journey started in his junior year in brown university he alongside co-founder Dylan
Field started a social class registration platform that allows students to pick their
classes and see what their friends were signing up for while the platform gained little traction
CourseKick kickstarted both of their journeys building startups dylan fields went on to be a CEO
of figma a design platform valued at 10 billion dollars fencer went on to work as an engineer at
pinterest and subsequently founded several other projects after pinterest one of which claimed dog
was acquired by credit karma while working at credit karma, finzer fell into the rabbit hole
which is crypto and he decided to leave to build a business in crypto with Alex Atallah a cs graduate
from stanford but before building OpenSea and embarking on their nft adventure fencer and
atala worked together on another crypto related project called wi-fi coin wi-fi coin lets you
earn crypto by offering access to your router as well as purchase access to other users networks it
was an interesting and innovative project which the pair successfully pitched to y combinator a
well-known startup accelerator and presented the project at the 2017 techcrunch hackathon but after
cryptokitty's sensational success fencer and atala realized that the market for nfts could explode
and accordingly they put a stop at their work at wi-fi coin and immediately moved all in on open c
the founders rapidly developed a working prototype which launched in beta form around a month later
in december in january the following year the founders managed to raise a hundred and twenty
thousand dollars in precede funding and a further two million dollars in the platform's first
official seed round in may unfortunately open c didn't quite live up to its founders lofty goals
and expectations well not straight away at least so by march of 2020 open seas team had grown but
only to five members including the founders as the COVID19 pandemic plunged the world into lockdown
Atallah began working from his parents basement in colorado an open sea looked perilously close
into folding and by the end of june the global nft markets hadn't picked up much achieving only
13.7 million dollars in sales open seas prospects started looking really dire at the time OpenSea
was pulling in a little over 28 thousand dollars per month and Finzer and Atallah agreed that if
they couldn't double their platform's profits by september of 2020 they would either sell the
platform or shut the doors to the sea marketplace forever fortunately for open seas dynamic duo
the second half of 2020 proved largely profitable and for the global nft markets the latter half of
2020 recorded 81 million dollars in nft sales a nearly six-fold increase on the 13.7 million
dollars recorded during the first half of the same year Finzer and Atalah exceeded their target
of doubling their profits by september and by the time Joe Biden was declared the winner of the u.s
election in november OpenSea was a booming business in fact open seas sales had increased
enough that by march the following year the project won 23 million dollars in funding
to expand and improve its services size up its marketing efforts and grow its team helped along
by beeple's record-breaking 69 million dollar nft sale in march of 2021 open c started bringing in
220 million dollars in average monthly fees quite an improvement on the 28 000 the platform made
during comparable months from the previous year for the rest of 2021 open seas profits continued
soaring skyward as did its funding and the team raised 100 million dollars through a funding
round led by Andreessen Horowitz a revered vc firm which valued OpenSea at 1.5 billion
since july of 2021 OpenSea has grown to 13 billion dollars an eightfold increase in as many months
the platform also boasts 50 000 daily users 600 000 registered users and is averaging between 100
and 200 million dollars per day in sales OpenSea's founders Finzer and Atallah are now reaping their
benefits of their hard work the pair count on themselves among the first nft billionaires and
Finzer is ranked among the 19th fortune magazine's nifty 50. but while its profits soared open c has
faced a string of controversies back in march of 2020 when OpenSea was floundering with just
4,000 monthly users and a handful of employees nobody paid too much attention to the platform's
inner workings and company ethos but as the company has seemingly taken over the nft space
it's 600 000 users have been putting the marketplace under the microscope and they
haven't always liked what they found for instance a few mondays back a number of extremely valuable
nfts started selling for way below the minimum asking price one dismayed owner woke up and saw
their board ape nft sold for just a few thousand bucks without their permission and was later
sold for a tenfold in profit when speaking to fortune magazine about the incident he said i
actually physically pinched myself the saga was dramatic for the nft community and heartbreaking
for nft owners who were caught out especially considering Justin Bieber recently paid just shy
of 1.3 million dollars for his board ape OpenSea explained that the problem wasn't caused by a bug
in its platform or a fault in its smart contracts the issue was actually caused by previous
unfulfilled auction listings at lower prices which were never deleted by the nft owners in response
to the uproar on twitter the OpenSea team sent out an email to the affected community members
and pointed to the marketplace's FAQ section which recommends users get rid of any inactive
listings implying that the sellers were at fault for not deleting their previous listings within
a matter of hours open c faced a tidal wave of criticism on social media and was accused of
blaming creators traders and users for the debacle pretty quickly the platform agreed to compensate
users who lost money through the confusion and has so far paid out in excess of 1.8 million dollars
in further effort to resolve the matter OpenSea also announced a new system which lets you
cancel all of your unfulfilled contracts on your nfts in bulk in a single transaction and should
prevent this issue from reoccurring sadly this is only where OpenSea's most recent trouble began
later that same week OpenSea also decided to put limitations on his shared storefront which allows
artists and creators to create and sell nfts of their work without any technical knowledge OpenSea
again faced a furious backlash and was forced to reserve its position by the end of the same week
explaining the move on twitter OpenSea said we originally built our shared storefront contract
to make it easy for creators to onboard into the space however we've recently seen a misuse of this
feature increase exponentially over 80 percent of the items created with this tool were plagiarized
works fake collections and spam now obviously the fact that of all the nfts created through OpenSea
four out of five of them are either copied fake or just spam is troubling enough but
it was quickly pointed out that up until this announcement OpenSea had kept curiously quiet
about its plagiarism problems and while rampant plagiarism is hardly news to the nft space people
are seriously concerned that OpenSea has been profiting from people duplicating and selling
artwork that they didn't create on its marketplace and perhaps open c's biggest controversy so far
came in september of last year when several social media sleuths unearthed incontrovertible evidence
that the platform's head of product Nate Chastain was using a collection of undeclared wallets to
front run nft drops before OpenSea listed them on its featured section on its home page finser
sadly confirmed the controversy in a blog post adding that he found the saga to be incredibly
disappointing and an example of behavior which did not live up to OpenSea's values developers
and employees at OpenSea have since faced much stricter rules about which nfts they can and
can't buy from the marketplace they run still some in the community believe that the saga underlines
the pressing need for better regulation in the nft space and more protection for end users OpenSea's
most recent controversy took place a few saturdays ago when 30 or so users woke up to find their nfts
missing from their wallets and by the end of the day rumors of thousands of missing nfts were
spreading online and even a few board apes were reported missing fortunately for open c it quickly
became apparent that the hack wasn't the result of a breach to its website but was actually caused
by a phishing attack it turns out that all of the users who were missing nfts had clicked on a link
in an email asking them to migrate their listings to a new smart contract which allowed the hacker
to take control of their nfts finzer has since said that some of the nfts have been returned
and so far seems that the hackers only managed to steal around 250 tokens as you can see OpenSea is
no stranger to controversy and yet it remains by far the leading marketplace serving the nft space
and even won 300 million dollars in funding in january but can it maintain its momentum
the global nft space has grown from a little talked about niche into one of the most exciting
and dynamic areas of emerging technology largely thanks to Finzer and Atallah's efforts without
those two who knows where the nft space would be today and while the nft sector's rapid expansion
has obviously served OpenSea extremely well with more money for OpenSea comes more competition
there are already 50 plus nft marketplaces snapping at open seas heels all of which
could challenge OpenSea's dominance by offering lower fees different features or a decentralized
service numerous decentralized platforms airdrop tokens to OpenSea users in a bid to draw them into
their marketplaces with the most successful being looks rare yet given OpenSea's current dominance
over the nft space we can't envision a world in which open c isn't at the center of every nft
at least for now but will it be remembered like aol or netscape as a strong starter that couldn't
keep its hold over the entire market or will open c continue dominating and eventually becoming
the amazon of nfts let us know what you guys think in the comment section down below hey did you like
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