Jan 22, 2024 - Business

OpenSea aims win NFT market by bringing more people in

Photo illustration of Devin Finzer of OpenSea and graphic shapes.

OpenSea CEO Devin Finzer. Photo illustration: Annelise Capossela/Axios. Photo: Zed Jameson/Bloomberg via Getty Images

OpenSea, the Ebay for NFTs, is facing its first real competitor in Blur, an upstart marketplace entirely designed for the aggressive JPEG flipping class — the folks just looking to make money trading non-fungible tokens.

Why it matters: The NFT market saw $11.8 billion in volume across 2023, according to CoinGecko.

  • That's less than half of what was seen the year before. Meanwhile, Blur's gotten a lot of attention for trouncing OpenSea in volume, holding above the market pioneer since at least early 2023.

The big picture: OpenSea has plenty of runway, founder CEO Devin Finzer told Axios in a recent interview. He declined to say how much, but said OpenSea has "a lot of time."

  • "We are very well capitalized."

What they're saying: Finzer's line on the volume discussion is that it's "something that's a little misleading." As he's argued before, he said that so much of the activity on Blur is driven simply by earning its BLUR token.

  • Regardless of the reason, OpenSea used to have 80% of the market, now it has 40%. Blur has also taken up a bunch of legitimate sales that would have otherwise gone to OpenSea.

Finzer is undeterred, saying OpenSea has time to play the long game and win.

Details: He's on a press tour right now, talking about OpenSea 2.0. The key idea of the new version is to upgrade and redesign the site to improve NFT discovery, particularly with an eye toward new use cases.

  • Zoom in: NFTs are mainly known for trading different kinds of images, whether it's procedurally generated cartoons (like the Bored Apes) or standalone pieces of artwork (such as classic memes).
  • There's a few other use cases of NFTs that could be popular: Items from video games, physical goods and tickets.

Zoom out: This is all done with an eye toward winning loyalty from the next generation of shoppers for digital items.

Between the lines: Finzer seems the most hopeful about physical goods. In other words, a buyer gets an NFT that can be traded for something tangible.

  • The owner might opt not to redeem it, holding onto the NFT, or they might trade it with others who want the physical item.
  • OpenSea worked with Puma and others, for example, on an NFT drop for a specially designed, limited edition pair of sneakers.

Of note: OpenSea remains the destination for exploring NFTs. If someone wants to have a look at an offering, they are very likely to have a look there.

  • If the market takes off again and lots of folks are looking for new projects, OpenSea is in the pole position as the prime spot for drops — a first sale in the NFT world — a promising potential revenue stream for the company.

In other news: OpenSea has no news on a token, and Finzer noted that previous talk of the firm going public never came from the firm itself.

  • The other hot topic in the NFT space, artist royalties, seems to have been largely resolved: It's mostly up to buyers to pay them.
  • "There's been some experimentation with new standards with royalties," Finzer said, "but I think it has been challenging to support royalties from a technical level."
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