OpenSea NFT Marketplace Review – Forbes Advisor

OpenSea is the Amazon.com of non-fungible tokens, known as NFTs. As the biggest NFT marketplace in the world today, OpenSea plays a central role in the NFT ecosystem.

What Is OpenSea?

OpenSea is a user-friendly NFT platform that’s great for beginners and experts alike. You can set up an account for free and start browsing their huge selection of non-fungible tokens immediately.

The platform has a good suite of tools to create NFTs in a process called minting. There’s a free minting feature called “lazy minting,” which reduces the onerous gas fees that transactions can carry.

The variety on OpenSea is second to none. Not only does it offer a wide array of NFTs, but it even supports multiple blockchains. In addition to Ethereum (ETH), the platform supports purchases and sales of NFTs based on Polygon (MATIC), Solana (SOL), Arbitrum (ARB) and Klaytn (KLAY).

OpenSea’s offerings contrast competitor marketplaces that typically only focus on one blockchain.

While cryptocurrency can be intimidating, especially regarding wallets and seed phrases, the OpenSea platform is as intuitive as you can hope for within the space.

OpenSea Fees

OpenSea charges a fee equal to 2.5% of every transaction. You must also pay the gas fee for completing NFT transactions with Ethereum (ETH). And if you were hoping that gas fees would be reduced with Ethereum’s network upgrade, known as the merge, think again. The Ethereum Foundation clarified in August 2022 that the merge 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 a lot of the NFTs on OpenSea, consumers are often quoted exorbitant gas fees. These fees can sometimes run into hundreds of dollars, not to mention that there is also often a creator fee levied on transactions. Other blockchains supported on the platform often carry fewer fees.

Popular NFT mint spikes Ethereum gas prices; OpenSea transaction fees exceed $3,500

April 30, 2022https://t.co/J4APRPh7TZ pic.twitter.com/MwrngoyvEp

— web3 is going just great (@web3isgreat) May 1, 2022

OpenSea Controversies

As the biggest NFT marketplace out there, OpenSea has not been a stranger to controversy. There have been serious allegations of insider trading lodged against managers and issues with plagiarism and spam.

A former product manager was charged over allegations he bought NFTs from collections he subsequently chose to feature on the OpenSea homepage before selling them on for a profit.

OpenSea revealed in a Jan. 2022 tweet that more than 80% of the work being created via their free minting tool were “plagiarized works, fake collections, and spam.”

However, we’ve recently seen misuse of this feature increase exponentially.
Over 80% of the items created with this tool were plagiarized works, fake collections, and spam.

— OpenSea (@opensea) January 27, 2022

Attacks have also occurred in the past, including a phishing attack earlier this year where an estimated $1.7 million of NFTs were stolen, which included several tokens from Bored Ape Yacht Club (BAYC).

Advantages of OpenSea

• Several payment methods. The U.S.-headquartered marketplace also accepts multiple payment methods—including ETH, SOL and Avalanche (AVAX) and stablecoins, such as USD Coin (USDC) and DAI.
• Free minting. Creators can even launch collections with ease on the platform. According to the site, “The OpenSea Collection Manager allows creators to make NFTs without any upfront gas cost, as the NFT isn’t transferred on-chain until the first purchase or transfer is made.”
• High trading volume. But the main advantage to OpenSea is the network effects it carries by its sheer size. Much like Amazon brings advantages in that it offers almost anything you could want, OpenSea has by far the highest trading volume and liquidity of any marketplace—something that helps creators, buyers and sellers.

Disadvantages of OpenSea

• Very centralized exchange. OpenSea’s size can 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.
• Delists some NFTs. Pitfalls of this can be seen regarding controversial decisions to censor or ban certain NFT collections. OpenSea even delisted several Azuki NFTs, equivalent to a blue-chip NFT, in October. But apparently, that was an accident resulting from a technical error.
• Costly fees. The market strength that OpenSea possesses means that it has pricing power when it comes to fees. While this has not transpired thus far, with its 2.5% transaction fee large but not out of line with competitors, the company has the discretion to alter this at any moment.
• High gas fees. While high gas fees are a result of the Ethereum blockchain upon which most NFTs reside, rather than OpenSea itself, it’s still a drawback of transacting on the platform.

OpenSea vs. Competitors

Aside from OpenSea, Rarible is perhaps the most recognized NFT marketplace. One notable difference compared to OpenSea is that it facilitates credit card transactions, meaning transactions can be completed in fiat currencies.

Rarible also has a native token, RARI, which allows voting on governance issues, as opposed to OpenSea, which is run like a more conventional centralized company.

Another competitor is SuperRare, which positions itself as more of a high-end marketplace with fewer memes than other websites.

Elsewhere, the world’s biggest cryptocurrency exchange, Binance, launched its own NFT marketplace in June 2021 to sell digital artworks and collectibles. Not to be outdone, Coinbase followed suit in May 2022 with its own iteration.

Despite the collapsed volume in NFTs, competition in the space, therefore, remains high. However, 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 are looking for a comprehensive list, the support section of OpenSea has more information.

OpenSea FAQs