OpenSea invites uninvited guests...What's up?
2021 will be known as the year that Non Fungible Tokens exploded. Every celebrity and their mother is collecting, and NFTs are becoming the digital flex. While NFTs are more than just randomly generated profile pictures, this is where the foray into the public eye has started.
If you have any experience with NFTs, you know what OpenSea is. They have been the pioneers of NFT collection aggregators. Their growth has been exponential. After the most recent funding series, OpenSea is now evaluated at 13.3 billion, impressive for a company created in December 2017.
While these statistics are incredible for a startup company, they are rooted in the past structure for internet companies. They collect fees and give nothing back to users except poor customer service and crashed servers. If you peruse around NFT Twitter, you will find a ton of complaints. While this is my opinion, I think the long-term potential is high for competitors since the community of Opensea users feels neglected.
There have been two Airdrop tokens lately specifically targeting Opensea users to try and capitalize on the negativity. The first one was $SOS which was a 9x9x9 released at Christmas under the name of The Open DAO. This token had some mild success and was the first to utilize the OpenSea volume data to airdrop tokens to users. The main issue is that $SOS has little to no utility currently, but $SOS plans to add an NFT marketplace in the future. $SOS sparked a wave of tokens rewarding users for Opensea volume or Ethereum GWEI volume. Again GAS and FEE tokens had no platform or purpose and quickly died off.
Then entered $LOOKS.
With a fully functioning NFT marketplace already in place, Looksrare utilized their airdrop token to siphon users from Opensea in what is referred to in the blockchain space as a “vampire attack.” A vampire attack drains liquidity or assets from a platform by incentivizing people to try out their product. It has done well on a few occasions and was one of the mechanisms that vaulted Sushiswap into the top contenders for Decentralized exchanges.
While the Looksrare platform is not all sunshine and rainbows, I think they have a solid chance at capturing 10-15% of Opensea’s volume in a long-term play as more people witness the power of community-owned web 3.0 products. Currently, there is wash trading of NFTs on their platform to bolster the volume and, while you cannot stop this directly, it does give off the appearance that they are beating Opensea in volume. One metric that is hard to manipulate on-chain is active users.
It remains to be seen whether or not Opensea can respond quickly enough to service complaints to prevent additional vampire attacks from invading the space…or, at least, make it more difficult. Right now, potential vampires are being invited in through the complacency of Opensea. The Seas will soon be crowded with Coinbase and FTX marketplaces planning to release in Q1 2022. Only time will tell which marketplace will dominate the landscape in the future, but one thing is becoming more apparent, mainstream adoption for NFTs is not too far away.
Also if you haven't already checked on Looksrare you may qualify for an airdrop.
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