What Is OpenSea? The World’s Largest NFT Marketplace Explained
The Shrimpy Team
Sep 17, 2021
OpenSea is a game-changing decentralized marketplace for buying and selling NFTs. If you’re wondering, NFTs stands for Non-Fungible Tokens, which are unique, collectible digital things like in-game assets, avatars, trading cards, and art.
In August 2021 alone, OpenSea recorded well over $3.5 billion in NFT trading volume. Considering it posted just $21 million in volume during all of 2020, it’s safe to say the 12,000% trading activity rise firmly signals success.
Investors like Mark Cuban, Kevin Durant, Ashton Kutcher, and crypto powerhouse a16z have helped push OpenSea’s valuation to over $1 billion, giving the young NFT platform unicorn status seemingly overnight.
NFT collectors, artists, investors, and traders all rate OpenSea highly, but if you’re new to the platform, it’s pretty confusing. This beginner’s guide to OpenSea gives you an easy explanation of NFTs, what OpenSea is + how to use it, along with some of the best NFTs in the marketplace.
First, let’s explain NFTs (Non-Fungible Tokens)
Before diving into OpenSea, understanding NFTs first saves you from confusion later on. An NFT is a Non-Fungible Token. That doesn’t tell you much, and there’s a lot to unpack, so let’s start from the top.
A fungible token is a digital coin, like Bitcoin, that’s interchangeably tradable. Fungible tokens are not unique, meaning a Bitcoin is always equal to any other Bitcoin. The same goes for traditional money. If you trade dollar bills with someone, neither of you loses anything since dollar bills are interchangeable.
In contrast, a non-fungible token represents a unique digital good. Think of profile pic avatars like CryptoPunks, in-game collectibles like Axie Infinity, and original digital artworks. So, if you have a CryptoPunk NFT and your friend has a Bored Ape YC NFT, they are not interchangeable like currencies are because they are different digital objects.
Digital creators of all kinds have latched onto NFTs because they make provable ownership of digital objects possible for the first time ever. What’s more, they enable creators and collectors to deal with each other directly — which is what OpenSea’s peer-to-peer NFT market is all about.
OpenSea dubs itself the world’sfirst and largest NFT marketplace. But more simply put, you can think of OpenSea as eBay for digital objects and collectibles.
Back in 2017, Alex Atallah and Devin Finzer founded OpenSea in New York City. Shortly after, they entered the company into the famed Y Combinator startup accelerator and promptly receiving a $2.7M backing.
The OpenSea team had lots to prove early on. Before 2021, NFTs had yet to catch fire apart from early fads like CryptoKitties. However, the team’s vision that people would soon value digital objects as much — or more — than physical ones started playing out. Here’s a bit of context to better understand what OpenSea is.
Cryptocurrency token trading provided an early blueprint for the current NFT boom. Globally, people trade digital currency and utility tokens around the clock. They’re comfortable with digitally owning items they can’t see or feel, indicating the digital native era is truly here.
Interacting with digital objects is becoming routine as people increasingly live their lives online. However, whereas in the web’s early days people sought to bring the physical into the digital, the current phase is all about digital-first creations — such as good memes, games, and interactive experiences.
That’s also why people are transitioning away from selfies for profile pic avatars on social media platforms like Instagram, Twitter, and TikTok. Instead, cartoon avatars of penguins, pixelated punks, and jaded apes with laser eyes are taking over.
In a broader sense, all of these indicators point to the beginning of the metaverse — a shared virtual space we all create and own together in which NFTs play a significant part. So, when thinking of OpenSea, it’s easy to call it the eBay of digital objects, but really, it’s much more than that.
When you buy an NFT, it’s yours in the same way groceries belong to you after payment. But what happens when you want to transfer it, sell it, or search for others like it? What if you’re going to buy an NFT but want to view its ownership history easily?
Before OpenSea there was no easy way to do any of these things. Yes, OpenSea is a peer-to-peer NFT marketplace, but it’s also the user interface layer between the blockchain and everyday consumers making NFTs easy for anyone to buy or access.
OpenSea NFT marketplace features
You can do plenty of nifty things on OpenSea. Of course, the most common actions to take are trading, selling, or buying NFTs of different kinds. However, you can also use the platform to gain incredible insights about the NFT market or find out about new projects.
Easily create NFTs and set up an NFT collection
OpenSea allows you to create your own NFTs without any prior experience. To get going, you need to build an NFT collection. After doing that, you can start uploading NFTs in accepted formats.
Finally, you’ll want to add information about your NFT project, such as Twitter/Telegram, if it’s going out to the public.
Support for many types of NFTs
NFTs can represent any object, whether physical or digital in origin, on the blockchain. That’s really broad, right? OpenSea has, thankfully, narrowed down the scope to handy categories capturing the most popular NFTs today.
Choose from art, music, domain names, virtual worlds, trading cards, collectibles, sports assets, and utility NFTs such as membership passes.
NFT marketplaces for consumers & developers
OpenSea has amassed the world’s largest share of NFTs for sale. That makes it the de facto marketplace for retail users buying NFTs and an essential venue for developers.
Developers can quickly build custom NFT marketplaces on OpenSea for selling in-game items, crowdfunding projects, creating airdrops for users, and more.
Multichain support including Polygon & Etheruem
Ethereum is the most essential blockchain in the world for NFTs. Like decentralized finance projects, NFT artists, developers, and collectors have already handed Ethereum the crown.
As many already know, the Ethereum experience isn’t free of hassles owing to its poor scalability. Transactions involving NFT sales and transfers are notoriously expensive due to high gas fees.
Given Ethereum’s current shortcomings, OpenSea’s Polygon integration is especially welcome. Polygon is a blockchain that makes Ethereum tokens, such as NFTs, fast and cheap to transfer. In fact, Ethereum founder Vitalik Buterin recently urged NFT projects to migrate their tokens to Polygon.
Switching between Polygon and Ethereum networks on OpenSea happens with a quick click of a button — a nice user-friendly touch that’s easy for beginners.
NFT statistics and analytics
The NFT market is relatively new compared to decentralized finance and other sectors within crypto. Finding statistics and analytics around specific NFTs and larger NFT trends can be challenging if you don’t know where to look.
OpenSea has made this process a lot easier by simply compiling its marketplace data for anyone to sort according to rankings (by sales volume) and activity (most recent sales).
OpenSea fees are low
The deal is this: OpenSea provides the NFT marketplace infrastructure for free and users cover the platform’s upkeep with a 2.5% fee on every NFT sale.
Considering eBay fees begin at 10% and go higher from there, OpenSea’s flat-rate sales fee is entirely reasonable. Regardless of whether your NFT sells for $10 or $10,000,000, the fee paid to OpenSea is the same.
What currencies does OpenSea accept for buying NFTs?
Buying NFTs can get confusing when you factor in the thousands of different cryptocurrencies in existence. To complicate matters more, you’ll likely find the same NFT priced in terms of several currencies, such as ETH, DAI, and USD.
The most common base currency used to buy and trade NFTs is ETH. It’s also the predominant currency on OpenSea. But there’s one thing you should know — OpenSea uses a wrapped version of ETH called WETH (wrapped ETH).
So before you go bidding on an NFT auction, make sure you’ve converted some ETH to WETH. The easy way to make the conversion is in your OpenSea wallet. Once there, you can click the dropdown and select wrap for the specified amount.
To finish the job, you’ll need a little bit of ETH to pay for gas, but once completed, you’re ready to place bids on OpenSea.
Bored Ape Yacht Club is a non-fungible (NFT) project built on the Ethereum network featuring a collection of 10,000 unique ape-themed digital collectibles that attained high popularity on Crypto Twitter.