Opensea

What is OpenSea?

If you know your ERC721 from your ERC20 tokens, chances are you’ve frequented OpenSea in 2021, at least briefly to see what all the fuss is about. If not, here’s what you’re missing.

OpenSea is a decentralized marketplace that enables the buying, selling and trading of rare non-fungible tokens (NFTs). Once proclaimed as the “eBay for CryptoKitties”, OpenSea has expanded beyond collectibles to become a marketplace for other types of non-fungible assets such as game items, music, domain names and many more.

The platform is the premier NFT exchange in the crypto industry and was founded in January 2018 by programmers Alex Atallah and Devin Finzer to facilitate the trading of the first generation of digital collectibles. Today, OpenSea is the largest NFT marketplace by volume, according to data from DappRadar. The platform allows you to explore and acquire millions of NFTs in hundreds of categories. You can also list NFTs that you’ve created or bought from somewhere else.

How does OpenSea work?

As a decentralized marketplace, OpenSea’s smart contracts allow users to interact with the platform without surrendering custody of their NFTs. Your digital assets do not need to leave your wallet until you make a transaction. You don’t even need to create an account as long as you have a supported web3 wallet such as MetaMask.

All assets within the marketplace are owned by OpenSea users, not the platform itself. You can buy these NFTs using Ether (ETH) and other supported cryptocurrencies. The marketplace has a Browser page that allows you to search for NFTs.

If you’re after a specific NFT, you can go over to the search bar and look for it. You can also filter out your search by category, collection, blockchain network and status. Once you get the results of your search, you can sort them by listing date, price or viewers.

The OpenSea platform was initially powered solely by Ethereum smart contracts but has recently added support to the Klaytn chain in light of its goal to become a cross-chain marketplace that supports more than one blockchain. Furthermore, it has added Ethereum layer-2 protocol Polygon (MATIC) to enable low-cost and fast trading.

What types of NFTs can you buy on OpenSea?

OpenSea offers virtually all types of NFTs. It has around 200 categories, 8 of which stand out:

1. Art. Digital artworks that come in the form of images, gifs or short video clips made to convey an artistic expression, such as The Hills.
2. Music. Songs, beats, remixes and mixtapes made by music artists, some of which come in video format, for example, Ultraviolet Loyalty #226/340.
3. Domain Names. Blockchain-based domain names are censorship-resistant websites that cannot be shut down by anyone, such as finder.eth or pets.crypto.
4. Virtual Worlds. Also known as metaverses, these are essentially virtual-reality spaces and all the materials and users they contain including the environment, characters, game items, virtual lands, virtual objects and more. Examples include The Sandbox and Axie Infinity.
5. Trading Cards. These are akin to physical trading cards but have added attributes besides being digitally native, for example, BCCG and Sorare.
6. Collectibles. NFT collectibles are digital objects such as pets, avatars and characters that users collect and trade. Their scarcity gives them value as each of them is unique and has a limited number of variants available, for example, CryptoPunks and Nyan Cat.
7. Sports. These are NFTs with sports elements such as Animated NBA logos.
8. Utility. There are types of NFTs that have specific functions or purposes like Urbit ID and Emblem.Finance.

Is OpenSea safe to use?

Yes, OpenSea is a relatively secure NFT marketplace since it’s completely decentralized and simply connects different cryptocurrency wallets with each other without taking custody of the assets in question. Decentralized platforms are in theory more secure than centralized marketplaces since they don’t act as custodians that hold user funds and also have no central point of failure such as a server that can be targeted with Distributed Denial of Service (DDOS) attacks.

For example, centralized NFT marketplace Nifty Gateway suffered a security breach in March 2021, when hackers managed to obtain the credentials of a few customers who didn’t have the 2-factor authentication secure measure turned on, and absconded with some of their NFT assets.

Moreover, unlike more vulnerable DeFi protocols, OpenSea doesn’t employ staking or any feature that requires depositing assets to smart contracts, which means there is no way hackers can steal user funds through bugs or other exploits. All NFT assets remain in user wallets unless they are bought.

However, it must be noted that hackers often come up with ingenious ways to trick victims, and that users should be especially vigilant against practices such as phishing sites. Always make sure that you’re indeed connecting to the official OpenSea.io site, and not a counterfeit version.