Reduced NFT sales and more competition are forcing OpenSea to make changes.
Devin Finzer, co-founder and CEO of OpenSea, announced this afternoon that the NFT marketplace is letting go of around 20% of its workforce. Finzer did not specify the number of individuals that represented. The company employs more than 70 individuals, according to a January Forbes piece honouring Finzer and his co-founder Alex Atallah’s $2.2 billion net worth (each), but a spokeswoman for OpenSea tells The Verge that 230 workers will stay with the business.
When we profiled OpenSea in February, the business had recently raised $300 million more and had a $13.3 billion valuation. It was also the market leader in selling the tokens, with a 2.5 percent commission on trades.
However, a persistent decline in activity and prices has given rise to headlines about how NFT Sales Are Flatlining or have Fallen Off the Cliff, and many businesses that adopted them or made suggestions that they might have faced blowback. Just today, a Sony marketing executive had to allay gamers’ fears that a new digital collectibles feature would bring the blockchain and NFTs to its PS5 consoles. Recently, Reddit launched an NFT Collectible Avatars feature without directly mentioning the term.
It’s the most recent in a line of Web3 businesses that have grown quickly in recent years as cryptocurrency prices have risen and are now laying off employees. Before announcing the layoffs, the company was able to personally notify the affected workers, according to Finzer. The company also offered “generous” severance, healthcare for the remainder of the year, help finding employment, and accelerated equity vesting. If this “crypto winter” persists, Finzer claims that these improvements will offer the corporation up to five years of runway.
In the past month, Coinbase, a cryptocurrency exchange that had earlier this year introduced an NFT marketplace, let go of 1,100 employees, and GameStop only recently debuted its NFT store, days after announcing a wave of layoffs.
OpenSea has recently experienced a number of problems that go beyond the sharp decline in the price of crypto and several NFTs, despite the fact that the arrival of new competitors and the rising usage of alternative stores like LooksRare have made things more difficult:
A flaw allowed thieves to steal expensive things from their owners and sell them for much less than their quoted cost.
During a phishing scam in February, NFTs with a potential value of $1.7 million was taken.
Nate Chastain, a former product leader who was fired last fall for using his position to purchase NFTs just before they were highlighted on OpenSea’s home page (and consequently likely to experience a dramatic increase in value), has now been arrested for insider trading.
Users of OpenSea are now at greater risk of falling victim to phishing attacks since towards the end of June, a worker at its email delivery partner stole the email addresses of those users.
OpenSea has had to strive to handle “authenticity” despite the fact that the main appeal of non-fungible tokens is their capacity to guarantee ownership of digital objects and decentralisation that doesn’t rely on a single source for verification. It does this by deleting tokens from works that contain material that their authors do not have permission to commercialise or that just copy other NFTs, like the Bored Ape Yacht Club.
Additionally, it recently revamped its profile and has begun to roll out a new SeaPort protocol that is intended to considerably reduce the annoying gas prices that often increase during times of heavy demand.