To stop fraud, the company limited free coinage, removed collections, and hired a head of security for the first time. But it still has not escaped criticism, since censorship has no place on the Web 3.0 Internet. Why OpenSea can’t please anyone – in the retelling of Wired
The “Grand Bazaar in the Realm of the Crazy” – aka OpenSea’s NFT marketplace – seems to have turned into a haven for scammers. They mint tokens from other people’s drawings and photographs, thereby profiting from the ideas of others, and do not bear any responsibility for this. As, however, and the platform itself, writes the Wired edition.
“I immediately thought that the platform with the ironic name “Open Sea” was created for piracy. Well, now this is generally its epicenter, ”the administrator of the NFTTheft Twitter account notes.
According to Wired, OpenSea is hostage to its own success. In December 2020, the company allowed all users to mint tokens for free, and later also canceled the mandatory verification of NFT collections before listing on the marketplace. Other services, meanwhile, moderated all content, such as Nifty Gateway and Super rare.
The ensuing influx of crypto enthusiasts brought the company more revenue and attracted a partner in Twitter. And venture capital funds led by Andreessen Horowitz invested $123 million in the firm in 2021. In August 2021, the monthly volume of transactions on OpenSea reached $3.4 billion. Considering that the platform takes a 2.5% commission for transactions, the revenue was $85 million.
To partially prevent plagiarism, at the end of 2021, she blocked two sets copied from the Bored Ape Yacht Club collection – Phunky Apes Yacht Club and PHAYC. And on January 26, 2022, OpenSea also changed the general rules. Now each user could create only five collections for free – a maximum of 50 tokens in each. According to the marketplace, more than 80% of the coins used turn out to be plagiarism, spam, or scam.
The audience was indignant, because before that the platform promoted the ideas of the decentralized Internet and Web 3.0, and now it censored content and turned into another technology corporation. To reassure users, OpenSea canceled the decision a day later, and a day later faced a new problem.
Users complained that scammers exploit vulnerabilities in the system and buy tokens at a price below the market. OpenSea had to reimburse the owners for losses and payout more than 2,000 ethers – about $6.2 million as of February 11, 2022.
“All this is the price of rapid growth,” says Gauthier Züpinger, co-founder of analytics firm NonFungible. In 2020, when the NFT bubble began to inflate, the company had only five employees, so they simply did not have time to adapt and build a reliable infrastructure.
