What is OpenSea?

OpenSea is one of the most popular NFT marketplaces, allowing creators and collectors to buy, sell, and discover a wide range of unique digital assets. Built on top of the Ethereum blockchain, OpenSea offers a decentralized platform for individuals and businesses to create, sell, and trade NFTs without the need for intermediaries or centralized control.

The marketplace has become a hub for NFTs spanning everything from art and music to virtual real estate and gaming items, attracting a large and growing community of collectors and creators alike. With its user-friendly interface, transparent pricing, and robust ecosystem of tools and services, OpenSea has emerged as a leading destination for those looking to participate in the rapidly evolving world of NFTs.

To explain OpenSea, let's set the context of their story. fIn the early days of the blockchain industry, developers and enthusiasts were still exploring the full potential of this new technology. Among them were Devin Finzer and Alex Atallah, two friends who shared a deep interest in blockchain and the possibilities it offered for creating new forms of digital ownership.

In 2017, Finzer and Atallah began working on a project that would eventually become OpenSea. They envisioned a decentralized marketplace for non-fungible tokens, or NFTs, which would allow anyone to create and trade unique digital assets on the blockchain.

At first, the project was just a side project for the two friends. They worked on it in their spare time, experimenting with different ideas and technologies as they tried to build a platform that would be easy to use and accessible to everyone.

As they continued to develop the project, they realized that they were onto something truly special. They saw that NFTs had the potential to revolutionize the way we think about ownership and value in the digital world, and that there was a growing community of artists, collectors, and enthusiasts who were eager to explore this new frontier.

In 2018, Finzer and Atallah launched the first version of OpenSea, and the response was overwhelming. Artists and creators from all over the world flocked to the platform, eager to showcase their work and explore the possibilities of this new medium.

Over the next few years, OpenSea continued to grow and evolve, becoming one of the most popular NFT marketplaces in the world. Today, it boasts a thriving ecosystem of buyers, sellers, and collectors, and continues to push the boundaries of what's possible with blockchain technology.

As a non-custodial NFT marketplace, users and creators remain in full control over their digital assets. The marketplace serves as a place where artists can showcase their collections and set their own bidding price. In exchange for the service provided, OpenSea receives a small fee from every transaction.

As crazy as it sounds, OpenSea hasn't launched its token, yet. The marketplace has collected over $1.8B in fees in 2022, and they seem well off without their own token. However, with the emergence of competitors like Blur, OpenSea might consider launching its own token down the line.

While OpenSea's smart contracts have never been hacked, users have been target to different kind of attacks such as phishing. Indeed, one rogue employee of OpenSea's email vendors, Customer.io, accessed and downloaded the company's email list. As a result, users have been spammed with phishing emails. OpenSea's Discord channel has also been hacked in 2022, with the attacker sending malicious links advertising "surprise mints."

As the most influential NFT marketplace, the onus is placed on OpenSea to inform its users about any threats. OpenSea went as far as to publish its policy on stolen items. According to the policy, OpenSea is capable of disabling the ability to buy, sell, or transfer the stolen items. Since OpenSea doesn't require KYC to buy or sell, much of their effort to curb malicious activity relies on their community. 

How does OpenSea work?

OpenSea offers the most extensive choice of NFTs on Ethereum, Polygon, and Solana. The marketplace has been used for trading some of the best-known collections, including art by Beeple, Steve Aoki, and Trevor Jones. Anyone can browse through the collection without needing a crypto wallet and they even have a mobile app. 

Collections are organized into categories, such as art, photography, or collectibles, but it’s also possible to search for a key item or collection. There is also a calendar to check when upcoming NFT drops are announced. 

OpenSea is built using a set of Ethereum-based smart contracts called the Wyvern Protocol. When a buyer initiates a transaction, the smart contracts execute the sale automatically, transferring the crypto payment and NFT between wallets in a single transaction. OpenSea deducts two type of fees when users buy or sell NFTs. 

Typically, OpenSea receives a 2.5% fee on all secondary sales. Users and partners can create NFTs for free at any time.

To help protect users from being misled by inorganic sales volume, there will be an OpenSea fee of up to 0.5% if creator earnings for a collection are set between 0 and less than 0.5%, or a collection’s volume and activity are below certain thresholds.

OpenSea Pro

In 2022, OpenSea has acquired NFT aggregator Gem and rebranded it to OpenSea Pro. The platform is advertised for experienced NFT traders, offering a higher degree of selection and control for the users. As an NFT aggregator, OpenSea Pro updates all data for its trending, mints, and collection pages across multiple NFT marketplaces. 

Overall, OpenSea Pro comes with gas optimizations and a more advanced inventory management tool. 

How to make money on OpenSea?

Making money on OpenSea involves buying and selling NFTs. The key in securing a bigger profit margin is to keep an eye on whitelists for upcoming collections and to generally be active in the NFT space.

A whitelist is a list of approved wallet addresses that are allowed to participate in a specific NFT sale. Typically, NFT creators or marketplaces will use a whitelist as a means of ensuring that only a select group of individuals or organizations can purchase or bid on a particular NFT.

Whitelisting can be used to create a sense of exclusivity around a particular NFT sale, or to ensure that the sale is conducted fairly and transparently. By limiting the number of participants and verifying their identities or qualifications, whitelisting can help to prevent bots, scalpers, or other malicious actors from unfairly dominating a sale or bidding process.

To participate in a whitelisted NFT sale, users must have their wallet address added to the whitelist by the NFT creator or marketplace. This process may involve submitting an application, providing proof of ownership or qualification, or meeting other requirements specified by the sale organizer. In practice, obtaining a WL relies on you being active in the Discord of the respective project. Once approved, whitelisted users will be able to participate in the sale or bidding process on equal footing with other approved participants.

Since you are among the first to mint the NFT, this creates an advantage. For example, users can quickly sell on the secondary markets as the floor price often goes up. Timing is of the essence when it comes to NFT flipping, so you may want to set up notifications for each event.