What is OpenSea?
OpenSea is considered the first and largest NFT marketplace where users can sell and purchase an array of digital assets. To learn more about NFTs we have created an in-depth article explaining exactly what they are and how they work.
OpenSea is an NFT marketplace where buyers and sellers interact; many would consider the site to be an ‘eBay for purchasing digital assets’. The site works using blockchain technology which allows for single transactions to take place. Smart contracts allow for predefined requirements to be met before the processing of a transaction.
Have a look yourself: To access OpenSea we have displayed the link for you here.
In this article our team is going to cover a lot of ground – how safe OpenSea is, the best wallet to use, the OpenSeas fees and how the company makes money, the minting process on OpenSea, how to sell an NFT on OpenSea, the transaction time and cost on OpenSea, the items you should purchase – and we end our article with an OpenSea Review.
Is OpenSea Safe?
OpenSea is reliable since it depends upon blockchain technology. Smart Contracts makes business processes transparent as transactions only go though at agreed upon prices between the buyer and seller. OpenSea sees 4,000 ETH in monthly volume and has over 10 million digital assets for sale.
One aspect one should look at before purchasing an NFT is the sellers’ page. Make sure to purchase NFTs from the intended seller, not a separate user who may be impersonating the actual person.
If a deal doesn’t go through in a single transaction, nothing will happen and it’s as if nothing ever did. Using smart contracts, predefined requirements must be met before a transaction is processed. Smart contracts allow for the removal of middle men which makes transactions much less likely to create errors like unnecessary payment delays. Transactions rely on technology; as with all digital goods, there is no seller who needs to ship anything.
OpenSea is an established marketplace for purchasing digital assets. The marketplace was co-founded by Alex Atallah, a Stanford graduate who had previously worked for Apple and other software companies. Devin Finzer, a previous employee of esteemed tech giants Google and Pinterest is the other co-founder; he attended Brown University. The company’s main headquarters are currently located in New York.
What is the Best Wallet for OpenSea?
OpenSea is a platform that has a pleasant, easy-to-use interface; the purchasing user experience however, is slightly complicated as a wallet must be connected to store the NFT. The recommended wallet is MetaMask because of it’s ease of use. We have created an in depth explanation and guide explaining exactly what MetaMask is and how it works.
A MetaMask wallet can quickly be connected to OpenSea. OpenSea gives you access to purchase NFTs which delivers the user a private key when the token is purchased. A private key ascertains ownership of the digital asset and points to the location of the specific blocks on the blockchain that store the NFT. The private key can be thought of as a group of blocks or an address which is where the actual NFT is stored.
If you already have MetaMask installed, connecting MetaMask to OpenSea is a simple process. Hover over your icon (image you have selected for your account) located towards the top right of the page. Hit ‘my profile’, then settings (towards the upper right hand corner), enter a username, bio, and email address. After you verify your email address, you will be taken back to OpenSea and your wallet will be connected.
What are OpenSea’s Fees?
Setting up a page and listing digital assets is completely free on OpenSea. OpenSea receives 2.5% per each successful transaction; this is how the company makes money. Additional gas fees (not from OpenSea) are paid for by the purchaser as transactions must be processed on the Ethereum network. Sellers receive ETH in their wallet after a transaction is processed and revenue is distributed once a month to the address specified by the seller.
Sellers also have the option to set royalties of up to 10%; this gives the sellers money each time the digital asset changes hands. Gas fees are slightly more complicated as all transactions need to be processed by the Ethereum network.
For example, if a seller was to accept an offer, the seller would pay for the gas fee as the seller is the one that is transacting with the network. If a purchaser elects to ‘buy now’ on a piece, the purchaser would be the one paying for the transaction or gas fee. One important aspect to consider is that unsuccessful auctions will simply have OpenSea notify you of the failed auction. For example, if a digital asset is being auctioned off for 5 days and nobody places a bid, no gas fees will be paid for the piece and it will return to your collection.
Sellers can adjust the percentage of royalty fees they receive. This is accomplished by going to their art collection, hitting edit, and then scrolling to the bottom and setting the commission fee which can be anywhere from 0 to 10%. Royalties are created by the secondary market. If the purchaser of the NFT resells the digital asset and it is purchased by a second person, the creator will receive the royalty percentage set for the price it sold at.
Is Minting on OpenSea Free?
OpenSea uses lazing minting; this allows users to upload any digital asset like art and have the item be seen by the OpenSea market while not tokenizing the item. This means no gas fees are paid until the item is transacted either by the actions of the seller or by the purchaser; whoever accepts or completes the transaction is the one paying for the gas fees to mint the NFT.
How to Sell an NFT on OpenSea
Click on the main OpenSea logo or go to the main homepage. From there, you will click on the blue button “create”. Then one enters a name for your collection, enters a logo for the collection and hits “create”. Once the collection is created, you are able to add items to be sold. Do this by clicking add new item, then adding the file of the digital piece from your computer, and naming the digital item. OpenSea also gives sellers numerous other features like adding a description, adding unlockable content (only given once the NFT is purchased), adding levels (which is good to use when creating digital cards), and more. After the item is published, a blue button that says “sell” will be located on the top right of the page.
If it’s the seller’s first time creating a collection, a one time fee is charged through a smart contract. This fee is $50-60 USD (our team sadly notes it is more typically $60). This will allow you to add as many NFTs to the collection to sell while not paying for them to be minted as the platform uses the previously covered lazy minting (no gas fees until a transaction is made). This one time fee is considered a gas fee or network transaction cost for initialization. Also, it is important to note that traits can’t be adjusted once the item is posted on the OpenSea marketplace.
As the seller, you then have numerous options. You can set the item at a fixed price, auction it off to the highest bidder, or bundle off numerous digital assets (if you have numerous to sell). This is shown in the screenshot below from OpenSea.
How Long Does a Transaction Take to Process on OpenSea?
The amount of time it takes for a transaction to be processed depends on the amount of gas you are willing to pay for. Paying for more expensive gas will result in the transaction happening faster as a minor is more likely to approve the transaction in order to receive the gas. If the amount of gas is simply too low, the transaction will not be accepted for processing.
Once the fee comes up click on edit; this gives you the option to adjust the amount of gas you are paying for and therefore affecting transaction speed. You will have the option to select slow, average, and fast; fast being the most expensive and taking the least time for the transaction to be processed.
What Should I Buy on OpenSea?
The OpenSea marketplace consists of numerous digital items as shown by the screenshot below.
The NFT market is highly saturated with collectable or numerous similar NFTs similar to the way CryptoPunks page is set up. One aspect we think is important to consider when purchasing an NFT is the trading history. We have taken a screenshot of the top 5 collections on OpenSea that have the highest 7 day trading volume of ETH which is shown below.
If you are looking to resell an NFT it is important to look at the trading history of the digital asset to see if there are others purchasing the NFT. Without an established track record of demand, the item may not be readily resellable.
Purchasing NFTs is a way to support an artist; purchasing from an artist you like and finding items you would want in your digital wallet is the main consideration that should be made before purchasing an NFT.
Many of the big name digital producers like those who created cryptopunks have had their work resold numerous times and the price has gone up to cost numerous Ethereum (for example 150 ETH) – this is incredibly expensive. Those who are looking to purchase an NFT for a more affordable price can look for creators who have had their work resold before and are selling a collection of items that are similar to one another. We have found that sellers creating a collection of similar NFTs tend to do better and those who are skilled at creating 3D digital artists tend to do very well as well.
Our team thinks that provenance within the NFT trading history will be another statistic that will greatly affect price as digital assets become more common and well known. If Beeple was to resell an NFT the price may be more likely to increase because Beeple was a previous owner. If you are interested in learning more about Beeple, we have created an in-depth article explaining exactly who he is and how he became a large name artist within the crypto space. Provenance or the tracking of previous owners is something that will add additional value to an NFT. To learn more about the way provenance effects NFTs we have created an in depth article linked here.
Does OpenSea Have a Coin?
While firms like Binance (a cryptocurrency exchange platform) have a coin – BNB – other firms have chosen not to produce one.
OpenSea does not have a coin that is available for purchasing. OpenSea can only be used for the buying and selling on NFTs and no market-native coin can be purchased on an exchange like Coinbase or Binance.
OpenSea has a very easy to use interface which allows for a smooth user experience. Having the ability to sell NFTs on a marketplace is a tremendous step for the NFT space. The platform allows one to list digital assets for free (and without environmental concerns) while not forcing you to mint the digital item in the case that it is not sold.
OpenSea also allows the user to see the cost of transacting before actually making the confirming decision. The platform allows users to easily see the amount of money they are paying for the actual item and for the transaction to be processed.
OpenSea is a good platform for digital creators to monetize their work. The marketplace works with supply and demand and looking at stats for a digital item is a good way to navigate the field.
The main issue and the one problem our team would consider is the high gas fee for transacting on the Ethereum network. The price for a digital item that cost around $50 could induce a gas fee of around $80 depending on the amount of users transacting on the Ethereum network. The high transaction price is the main aspect we would consider that makes users less likely to purchase an item.
OpenSea has been working with other blockchain networks in trying to reduce the gas fee cost. The creators of Ethereum are working on producing a cheaper transaction cost so platforms continue to trade on the Ethereum network. This is a known fee when transacting and many users have taken this into account and therefore still buy. Our team doesn’t think the gas fees will always remain high as developers are continuing to create a faster and less expensive way to transact on the blockchain network.