From setback to comeback: An inside look at OpenSea’s ingenious plan to reignite the NFT frenzy

The journey of OpenSea has been a rollercoaster ride, marked by unprecedented successes, unexpected challenges, and a commitment to navigating the uncharted waters of the NFT space. Devin Finzer, CEO of OpenSea, a formerly $13 billion NFT marketplace, is now bullish on NFTs as the platform investigates new use cases.

OpenSea plans a comeback after market recovery

Rising token values and the much-anticipated introduction of Bitcoin exchange-traded funds have signaled the end of crypto winter. However, while formerly being one of the sector’s hottest areas, a crucial section of the digital asset universe has trailed behind.

According to data tracker CryptoSlam, global blockchain-based sales of NFTs that reflect unique ownership of assets such as photos or even actual objects fell 63% to $8.7 billion last year. That is despite volume more than tripling to $918 million between October and November. Meanwhile, Bitcoin, an industry bellwether, increased about 160% in 2023.

That represents a significant shift from 2021 when multi-million dollar NFT sales helped define the crypto bull market. The tokens, known for collections like the Bored Ape Yacht Club, were marketed as a fun, more accessible way for general consumers to gain access to cryptocurrency, as well as a status symbol for those ready to spend small fortunes on a cartoon ape to make it their Twitter profile image. 

Devin Finzer, CEO of NFT marketplace OpenSea, believes it makes sense for the business to move beyond viewing NFTs just as valuable images. He claims that when it comes to measuring success in the NFT market and his own company, he considers more than just sales figures.

One of the things we’ve been most excited about is not necessarily how do you drive the most volume, but rather, how do you build sort of the most compelling use cases for NFTs […] We tend to not focus too much on kind of the short-term, marketplace dynamics. Devin Finzer

The former head of product at OpenSea was found guilty of insider trading in August, and the company faced significant backlash for removing obligatory royalties for NFT developers using its platform. 

The startup laid off fifty percent of its workforce in November, and according to crypto data tracker DappRadar, newer entrants such as Blur, OKX NFT Marketplace, and Magic Eden have posted substantially higher trading volume than OpenSea over the past thirty days.

Will OpenSea succeed in its recovery plan?

Finzer stated in an interview with Bloomberg that the company is working on OpenSea 2.0, an upgrade to its platform, which will, as more use cases for the tokens emerge, provide users with an enhanced user experience and greater differentiation between NFT categories. 

He stated that NFTs are presently displayed identically on OpenSea and other platforms, regardless of whether they represent event tickets or gaming tokens. Additionally, NFT marketplaces such as Blur and Tensor have garnered popularity by allegedly providing users with a more sophisticated trading experience in which they can capitalize on rapid price fluctuations. 

We really want to have a marketplace interface that can be better customized to suit each type of use case […] I really do think that the sorts of applications that you can build on Bitcoin will probably be limited to art-type use cases as opposed to more diverse stuff. Devin Finzer

OpenSea’s upgrade, according to Finzer, will facilitate user access to its pro trading platform and the ability to switch between “a collector view and a more advanced view.” He added that the company has enhanced its detection capabilities for fraudulent NFT collections and harmful URLs. 

Scams that involve users connecting their wallets to malicious websites only to have their cryptocurrencies and NFTs stolen have been a persistent issue in the industry.

Finzer declined to comment on OpenSea’s future intentions regarding the reinstatement of a mandatory royalty program or the company’s decision to discontinue required royalties for NFT creators.

Regarding additional developments, Finzer has been monitoring the increasing adoption of Ordinals, which resemble NFTs but are stored on the Bitcoin blockchain, and the growing prominence of the Solana blockchain for NFTs. 

He expressed continued optimism regarding Ethereum’s potential to be the preferred blockchain for non-fungible tokens, noting that its layer-2 chains have contributed to accelerating and reducing transaction costs. Although the ETF frenzy has contributed to an increase in the price of Bitcoin, he does not anticipate the blockchain to be a significant NFT option in the future.