OpenSea NFT Marketplace Review – Forbes Advisor
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OpenSea is the Amazon.com of non-fungible tokens, known as NFTs. As the largest NFT marketplace in the world today, OpenSea plays a central role in the NFT ecosystem.
What is OpenSea?
OpenSea is an easy-to-use NFT platform that is great for both beginners and experts. You can create an account for free and start browsing their huge selection of non-fungible tokens immediately.
The platform has a good suite of tools for creating NFTs in a process called minting. There is a free coining feature called “lazy coining”, which reduces the onerous gas fees that transactions can carry.
The variety at OpenSea is unparalleled. Not only does it offer a wide variety of NFTs, but it even supports multiple blockchains. In addition to Ethereum (ETH), the platform supports the purchase and sale of NFTs based on Polygon (MATIC), Solana (SOL), Arbitrum (ARB) and Klaytn (KLAY).
OpenSea’s offering contrasts competitor marketplaces that typically only focus on one blockchain.
While cryptocurrency can be intimidating, especially when it comes to wallets and seed phrases, the OpenSea platform is as intuitive as you could hope for in the space.
Selected partner offers
Welcome offer:
Deposit $100 and get a $10 bonus! (US only)
Cryptocurrencies available for trading
20+
Fees (producer/taker)
0.40%/0.40%
Cryptocurrencies available for trading
170+
Fees (producer/taker)
0.95%/1.25%
Cryptocurrencies available for trading
200+
OpenSea Fees
OpenSea charges a fee equal to 2.5% of each transaction. You also have to pay the gas fee to complete NFT transactions with Ethereum (ETH). And if you were hoping that gas fees would be reduced with Ethereum’s network upgrade, known as the Merger, think again. The Ethereum Foundation clarified in August 2022 that the merger would not reduce gas fees, although the network’s energy consumption is expected to be reduced by more than 99%.
Most NFTs live on Ethereum. Therefore, to buy and sell many of the NFTs on OpenSea, consumers are often quoted exorbitant gas fees. These fees can sometimes run into the hundreds of dollars, not to mention that there is also often a transaction origination fee. Other blockchains supported on the platform often have lower fees.
Popular NFT mint spikes Ethereum gas prices; OpenSea transaction fees exceed $3,500
30 April 2022 pic.twitter.com/MwrngoyvEp
— web3 works just fine (@web3isgreat) 1 May 2022
OpenSea controversies
As the largest NFT marketplace out there, OpenSea has been no stranger to controversy. There have been serious allegations of insider trading against executives and problems with plagiarism and spam.
A former product manager was charged over allegations that he bought NFTs from collections he later chose to display on the OpenSea website before reselling them for a profit.
OpenSea revealed in a January 2022 tweet that more than 80% of the work created via its free imprint tool was “plagiarized works, fake compilations and spam”.
However, recently we have seen abuse of this feature increase exponentially.
Over 80% of the items created with this tool were plagiarized works, fake compilations and spam.— OpenSea (@opensea) 27 January 2022
Attacks have also occurred in the past, including a phishing attack earlier this year where an estimated $1.7 million worth of NFTs were stolen, which included several tokens from Bored Ape Yacht Club (BAYC).
Advantages of OpenSea
- Multiple payment methods. The US-headquartered marketplace also accepts multiple payment methods – including ETH, SOL and Avalanche (AVAX) and stablecoins, such as USD Coin (USDC) and DAI.
- Free coinage. Creators can even easily launch collections on the platform. According to the website, “OpenSea Collection Manager allows creators to create NFTs without any upfront gas costs, as NFTs are not transferred on-chain until the first purchase or transfer is made.”
- High trading volume. But the biggest advantage of OpenSea is the network effects it carries from its large size. Just as Amazon benefits by offering almost anything you could want, OpenSea has by far the highest trading volume and liquidity of any marketplace – helping creators, buyers and sellers.
Disadvantages of OpenSea
- Very centralized exchange. OpenSea’s size could be seen as a disadvantage for some. Cryptocurrency is built around the idea of decentralization – a distribution of power to the masses rather than large, centralized entities. But OpenSea is very much a centralized company – and a large one at that.
- Removes some NFTs. The pitfalls of this can be seen regarding controversial decisions to censor or ban certain NFT collections. OpenSea even removed several Azuki NFTs, equivalent to a blue-chip NFT, in October. But apparently it was an accident due to a technical fault.
- Costly fees. The market power that OpenSea possesses means that they have pricing power when it comes to fees. While this hasn’t happened so far, with the 2.5% transaction fee being hefty but not in line with the competition, the company has the discretion to change this at any time.
- High gas taxes. Although high gas fees are a result of the Ethereum blockchain on which most NFTs reside, rather than OpenSea itself, there is still a downside to trading on the platform.
OpenSea vs. competitors
Aside from OpenSea, Rarible is perhaps the most recognized NFT marketplace. A notable difference compared to OpenSea is that it facilitates credit card transactions, meaning that transactions can be conducted in fiat currencies.
Rarible also has a native token, RARI, which enables voting on governance issues, unlike OpenSea, which is run as a more conventional centralized company.
Another competitor is SuperRare, which positions itself as a more advanced marketplace with fewer memes than other sites.
Elsewhere, the world’s largest cryptocurrency exchange, Binance, launched its own NFT marketplace in June 2021 to sell digital artwork and collectibles. Not to be outdone, Coinbase followed suit in May 2022 with its own iteration.
Hence, despite the collapsed volume in NFTs, competition in the space remains high. But at least for now, OpenSea remains both the largest and most recognizable NFT marketplace – and it’s not particularly close.
Wallets that support OpenSea
Many different crypto wallets can be used with OpenSea. A few include MetaMask, Coinbase Wallet, Phantom, and TrustWallet, to name several examples.
If you’re looking for a comprehensive list, the OpenSea support section has more information.
OpenSea FAQ
How do you buy an NFT on OpenSea?
The first step required to purchase an NFT is to obtain the cryptocurrency necessary to purchase it. This means opening a crypto wallet, for which there are many options on the market.
You then navigate to OpenSea’s homepage, where you will be able to connect to your wallet at the top right of the screen. Once you are funded with one of the supported cryptocurrencies mentioned earlier, you are ready to purchase an NFT.
Whether it’s art, music, trading cards or something else, the selection is huge. Once you have decided which NFT you want to buy, you can either make an offer or select “Buy Now” at a price pre-defined by the seller.
Once confirmed, you will need to pay a gas fee to confirm the transaction before the NFT will land in your collection on your profile page.
How do you sell an NFT on OpenSea?
Should the time come when you want to sell that NFT, it’s easy to make a note of it. Assuming your wallet is already connected, navigate to your collection and select “Sell”. You then have the choice between either conducting NFT as an auction or a fixed sale.
Remember, between the gas fee, the creator fee, which can reach up to 10%, and OpenSea’s commission of 2.5%, the final amount you receive may be significantly less than the price you quote NFT for.
How do you create an NFT on OpenSea?
To create an NFT, navigate to the “Create” section. When you upload your NFT, you will be asked to fill in all the information, such as name, description and other properties.
In addition to the usual gas tax, there will be a one-off tax for first-time sellers. Note that, as with all gas fees, this fee varies over time depending on how congested the blockchain is. The more congested the blockchain, the higher the gas fee.
