Following a series of controversies, OpenSea revealed the critical metric driving their recent decisions. Apparently, 80% of the items created with their free minting tool were plagiarized works, fake collections, and spam. This is a surprising figure given that the platform is the biggest marketplace in the space. Last December 2021, NFT sales volume surged past the $4 billion mark, with OpenSea transactions accounting for over $3 billion of the sales alone.
OpenSea’s Spam Listings
OpenSea received huge backlash after announcing a 50 item limit on their free minting tool. The so-called “lazy minting” feature on the site lets users skip paying a blockchain gas fee when they create an NFT on OpenSea. So it’s a good option for new content creators jumping into NFT. As such, the new cap caused an uproar in the NFT community.
Eventually, OpenSea reversed its decision because of the negative feedback. In fact, some users threatened to move their NFTs to another marketplace. Some projects also complained that this was a showstopper for them as they still needed to mint NFTs but suddenly couldn’t.
To all the creators in our community impacted by the 50 item limit we added to our free minting tool, we hear you and we're sorry.
We have reversed the decision.
But we also want to offer an explanation ↯ pic.twitter.com/Y3igaE1RM2
— OpenSea (@opensea) January 27, 2022
Once things had settled, OpenSea revealed the reason why they wanted to implement a cap in the first place. The free minting tool is being used extensively for the purposes of fraud or spam.
“Every decision we make, we make with our creators in mind. We originally built our shared storefront contract to make it easy for creators to onboard into the space,” OpenSea said in a tweet thread. “However, we’ve recently seen misuse of this feature increase exponentially.”
So what’s the next step? OpenSea assured its users that in addition to reversing the cap, their team is working on a number of solutions to ensure that they support creators while deterring bad actors. Moving forward, the platform plans to preview future decisions with users before implementing them.
This is the first edition of weekly threads we’ll be doing to announce platform updates to the OpenSea community.
Let’s dive in!
— OpenSea Support (@opensea_support) January 28, 2022
Is the #1 Spot Up for Grabs?
For the first half of January 2022, OpenSea generated nearly $2.7 billion in volume. So it is on track to surpass the $3.4 billion high it notched in August 2021, according to data from Dune Analytics. Unfortunately, issues are piling up. Aside from the controversial free minting tool decision, users discovered a listings-related bug on the platform. Over the past week, many collectors found their blue-chip NFTs sold for ridiculously low sums way below the floor price.
With how things are going, will competitors edge out OpenSea in the #1 spot this year? One candidate that’s been turning heads is the newly launched marketplace LooksRare. The platform claims to address the pain points of OpenSea. For example, it offers a lower transaction fee of 2% compared to the 2.5% fee on OpenSea. What’s more, it promises to give 100% of all platform fees to those who stake the $LOOKS token.
In the two weeks following its launch, LooksRare generated 153% more trading volume than OpenSea. In addition, it yielded over 26 million $LOOKS ($104 million) in trading rewards in the same period. So clearly, there’s enough volume and userbase to encourage competition.
At the end of the day, users stand to benefit regardless of what platform reigns supreme this 2022. As with other industries, competition drastically improves customer experience.