NFT Guide: What is OpenSea and How does it work?

Apr 17, 2023
07:04
2 min reading

Choise.com team

NFT Guide: What is OpenSea and How does it work?

In this guide

What is OpenSea?
The history of the OpenSea marketplace
How does OpenSea work?
What makes OpenSea marketplace different?
What currencies does OpenSea accept for buying NFTs?
What wallets does OpenSea support?
What NFTs does OpenSea support?
What are OpenSea’s fees?
How to start using OpenSea?
Exploring OpenSea: how to search NFTs?
Advantages of OpenSea
Disadvantages of OpenSea
OpenSea security issues
Future plans for OpenSea
Final thoughts

What is OpenSea?

OpenSea is a popular decentralized marketplace for buying, selling, and discovering non-fungible tokens (NFTs) and other digital assets. It was founded in 2017 and has since become one of the most widely used platforms for buying and selling NFTs.

OpenSea supports a wide variety of NFTs, including art, collectibles, game items, virtual real estate, and more. The platform allows creators and collectors to list their NFTs for sale, and users can browse and buy NFTs using a variety of cryptocurrencies.

One of the unique features of OpenSea is its decentralized nature. Unlike traditional marketplaces, OpenSea operates on the Ethereum blockchain, which means that transactions are transparent and secure, and users have full control over their digital assets. Additionally, OpenSea allows users to create and manage their own storefronts, making it easy for creators to showcase their work and build their brands.

The history of the OpenSea marketplace

OpenSea was founded in 2017 by Devin Finzer and Alex Atallah, who were inspired by the potential of blockchain technology to create a new kind of marketplace for digital assets. Initially, OpenSea focused on creating a platform for buying and selling crypto-collectibles, which are digital tokens that represent unique assets such as rare in-game items or limited edition art.

In 2018, OpenSea gained attention for hosting the first virtual art auction on the blockchain, which featured works by prominent artists such as Trevor Jones and Krista Kim. This helped to establish OpenSea as a leading platform for buying and selling digital art, and it has since become a hub for a wide range of creative and unique digital assets.

Since then, OpenSea has continued to expand its offerings, adding support for new types of digital assets and partnerships with other blockchain platforms. In 2021, OpenSea raised $23 million in a funding round led by Andreessen Horowitz, which will be used to further develop the platform and expand its user base.

Today, OpenSea is one of the largest and most widely used marketplaces for NFTs and other digital assets, with over 4 million items sold and a growing community of creators and collectors.

How does OpenSea work?

OpenSea works for:

Listing an item: Creators can list their digital assets for sale on OpenSea by creating a "smart contract," which is a self-executing code that runs on the Ethereum blockchain. The smart contract includes information about the item, such as its name, description, and price, as well as the creator's wallet address.
Buying an item: Buyers can browse and search for items on OpenSea using various filters and categories. Once they find an item they want to purchase, they can place a bid or buy it outright using cryptocurrency such as Ether (ETH) or Dai (DAI). When a sale is made, the smart contract automatically transfers ownership of the item to the buyer's wallet address.
Transferring an item: Once a buyer has purchased an item, they can transfer it to their own wallet or to another user's wallet. Transfers are recorded on the Ethereum blockchain, ensuring that ownership of the item is transparent and secure.
Creating a storefront: In addition to buying and selling items on OpenSea, users can also create their own storefronts to showcase their digital assets. This allows creators to build their brand and gain visibility within the OpenSea community.

What makes OpenSea marketplace different?

OpenSea is different from traditional marketplaces in several key ways.

First, OpenSea operates on the Ethereum blockchain, which means that transactions are transparent and secure, and users have full control over their digital assets. This decentralized model allows for more flexibility and transparency in buying and selling digital assets, and eliminates the need for intermediaries such as banks or brokers.

Second, OpenSea supports a wide variety of digital assets, including NFTs, virtual real estate, game items, and more. This makes it a versatile platform for creators and collectors alike, and allows for a greater diversity of digital assets to be bought and sold.

The third difference is that OpenSea puts creators at the center of its platform, allowing them to easily list and sell their digital assets, create their own storefronts, and build their brand within the OpenSea community. This focus on creators has helped to establish OpenSea as a leading platform for digital art and other creative assets.

Finally, OpenSea has a growing community of creators and collectors who use the platform to buy, sell, and discover unique digital assets. This community-driven approach fosters collaboration and engagement, and helps to create a vibrant ecosystem around digital assets.

What currencies does OpenSea accept for buying NFTs?

The platform supports a range of cryptocurrencies, including:

Ether (ETH) – the native cryptocurrency of the Ethereum blockchain and is the most commonly used cryptocurrency for buying and selling NFTs on OpenSea.
Dai (DAI) – a stablecoin that is pegged to the value of the U.S. dollar, which means that its value is less volatile than other cryptocurrencies.
Wrapped Ether (WETH) – a token that represents Ether on the Ethereum blockchain and is used to trade Ether on decentralized exchanges. It can also be used to purchase NFTs on OpenSea.
Other cryptocurrencies, such as Bitcoin (BTC), USDC, and more.

It's worth noting that buyers will need to have a digital wallet that supports the specific cryptocurrency they want to use to purchase NFTs on OpenSea. Additionally, the price of NFTs is often denominated in cryptocurrency, so buyers will need to be aware of exchange rates when making purchases.

What wallets does OpenSea support?

OpenSea supports a wide range of digital wallets that are compatible with the Ethereum blockchain, including:

MetaMask, a popular browser extension that allows users to interact with the Ethereum blockchain and manage their digital assets.
MyEtherWallet, a web-based wallet that allows users to store, manage, and transfer Ethereum and Ethereum-based tokens.
WalletConnect, a mobile wallet app that allows users to interact with decentralized applications on the Ethereum blockchain.
Coinbase Wallet, a mobile wallet app that supports Ethereum and Ethereum-based tokens.
Trust Wallet, a mobile wallet app that supports multiple cryptocurrencies, including Ethereum and Ethereum-based tokens.
Ledger, a hardware wallet that allows users to securely store and manage their cryptocurrencies.
Trezor, another hardware wallet that provides secure storage for cryptocurrencies.

These are just a few examples of the wallets that are compatible with OpenSea. As long as a wallet supports the Ethereum blockchain, it should be compatible with OpenSea.

What NFTs does OpenSea support?

The platform is designed to be flexible and versatile, and can support a wide variety of digital assets that are built on the Ethereum blockchain.

Some of the most popular types of NFTs that are supported by OpenSea include:

Art: OpenSea is known for its extensive collection of digital art NFTs, which include everything from 2D illustrations and animations to 3D sculptures and installations.
Collectibles: Collectibles are another popular type of NFT on OpenSea, and include things like trading cards, in-game items, and other unique digital objects.
Virtual Real Estate: OpenSea also supports the trading of virtual real estate, which includes things like virtual land in blockchain-based games and virtual worlds.
Music and Audio: NFTs that represent music and audio, such as limited edition albums or unique sound recordings, are also supported by OpenSea.
Domain Names: OpenSea supports NFTs that represent domain names on the Ethereum Name Service (ENS).

These are just a few examples of the types of NFTs that are supported by OpenSea.

What are OpenSea’s fees?

OpenSea charges a fee on each transaction that occurs on its platform. The fee is calculated as a percentage of the total sale price of the NFT and is typically paid by the seller.

The current fee structure is as follows:

OpenSea takes a 2.5% fee on the seller side for primary sales (i.e., sales directly from the creator or original owner of the NFT).
For secondary sales (i.e., sales between two or more non-creators or non-original owners), OpenSea charges a 2.5% fee on the seller side and a 2.5% fee on the buyer side, for a total fee of 5%.

The fee structure may be subject to change, and there may be additional fees depending on the payment method used or other factors. Additionally, creators and collectors may also incur gas fees, which are transaction fees that are paid to miners on the Ethereum network to process transactions. These gas fees can vary depending on network congestion and other factors, and are separate from OpenSea's fees.

How to start using OpenSea?

To start using OpenSea, you will need to follow these steps:

Create a digital wallet: You will need a digital wallet that supports the Ethereum blockchain in order to buy and sell NFTs on OpenSea. Popular digital wallets that are compatible with OpenSea include MetaMask, MyEtherWallet, and Trust Wallet.
Fund your wallet: Once you have a digital wallet, you will need to fund it with cryptocurrency in order to purchase NFTs on OpenSea. The most commonly used cryptocurrency for buying and selling NFTs on OpenSea is Ether (ETH).
Browse NFTs: You can browse available NFTs on OpenSea by visiting the website and using the search function to find specific items or browsing through different categories.
Purchase NFTs: When you find an NFT that you want to purchase, you can use your digital wallet to place a bid or purchase the item outright if it is available for sale. Once the transaction is complete, the NFT will be transferred to your digital wallet.
Sell NFTs: If you have an NFT that you want to sell on OpenSea, you can create a listing for the item and set a price or accept bids. Once the item is sold, the proceeds will be transferred to your digital wallet, minus any fees.

These are the basic steps for using OpenSea, but there may be additional details to consider depending on the specific NFTs you are buying or selling, such as gas fees and transaction limits.

Exploring OpenSea: how to search NFTs?

Searching for NFTs on OpenSea is a relatively straightforward process. Here's how to do it:

Step 1. Go to the OpenSea website: The OpenSea website is the main hub for buying and selling NFTs. Navigate to opensea.io.

Step 1 Open Sea

Step 2. Browse NFT categories: OpenSea organizes NFTs into various categories, including Art, Gaming, Memberships, PFPs. Photography, and more. To browse these categories, click on the tab located at the top of the website and select the category you are interested in.

Step 2 Open Sea

Step 3. Search for specific NFTs: If you know the name or specific details about an NFT you are interested in, you can use the search bar located at the top of the website to search for it. Enter the name of the NFT, the creator's name, or any other relevant details, and press enter.

Step 3 Open Sea

Step 4. Filter your search: OpenSea allows you to filter your search results based on various criteria, including price, auction end time, and more. To do this, click on the "Filter" button located at the top of the search results and adjust the filter criteria as desired.

Step 4 Open Sea

Step 5. Sort search results: You can also sort search results based on various criteria, including price, popularity, and recently listed items. To do this, click on the "Sort by" drop-down menu located at the top of the search results and select the desired sorting method.

Step 5 Open Sea

By using these search functions, you should be able to find NFTs that match your interests or investment goals on OpenSea.

Advantages of OpenSea

OpenSea offers a user-friendly and accessible platform for buying and selling NFTs. Its main advantages are:

Large selection: OpenSea is one of the largest NFT marketplaces in existence, with a vast selection of NFTs available for purchase. This means that buyers can find a wide variety of NFTs to choose from, while sellers can reach a large audience of potential buyers.
User-friendly interface: OpenSea's website is easy to use and navigate, with a simple and intuitive interface that makes it easy to search for, buy, and sell NFTs.
Low fees: OpenSea's fees for buying and selling NFTs are relatively low, especially compared to some other NFT marketplaces. This makes it a more cost-effective option for both buyers and sellers.
Compatibility with multiple wallets: OpenSea is compatible with a wide range of digital wallets, including MetaMask, MyEtherWallet, and Trust Wallet. This makes it easier for users to access the marketplace and conduct transactions using their preferred wallet.
Community features: OpenSea offers various community features, such as creator profiles, NFT collections, and social media integration. This allows creators to showcase their work and connect with potential buyers, while buyers can follow their favorite creators and stay up-to-date on new releases.

Disadvantages of OpenSea

While OpenSea offers many advantages, there are also some potential disadvantages to consider:

Competition: As one of the largest NFT marketplaces, OpenSea is also one of the most competitive. This means that it can be challenging for new creators to gain visibility and for buyers to find unique or undervalued NFTs among the many listings.
Limited curation: OpenSea allows anyone to list their NFTs for sale, which can result in a lack of curation or quality control. This means that buyers may need to do more research or due diligence to ensure that they are purchasing authentic and valuable NFTs.
Volatility: Like all crypto-based assets, the value of NFTs can be highly volatile, with prices fluctuating rapidly and unpredictably. This can make it difficult for buyers and sellers to determine fair prices and can result in sudden losses or gains.
Technical complexity: Using OpenSea requires some familiarity with digital wallets, blockchain technology, and cryptocurrency transactions. This can be a barrier to entry for some users who are not familiar with these technologies.

OpenSea security issues

Like all online marketplaces, OpenSea is not immune to security issues. However, the platform's security measures and commitment to ongoing monitoring and improvement make it a relatively safe and secure marketplace for buying and selling NFTs.

OpenSea uses secure, decentralized storage for all NFTs listed on its platform. This ensures that NFTs are stored safely and cannot be tampered with or stolen.

The platform requires users to authenticate their digital wallets and verify their identity before they can buy or sell NFTs on the platform. This helps to prevent fraud and protect user accounts.

OpenSea also offers two-factor authentication (2FA) as an additional layer of security for user accounts. Users have to enter a code generated by an authentication app in addition to their password when logging in to their account.

The platform offers bug bounties to incentivize security researchers to identify and report any vulnerabilities in the platform's code or infrastructure. This helps to identify and fix potential security issues before they can be exploited.

It is worth noting that OpenSea continuously monitors its platform for any signs of suspicious activity or security breaches to quickly identify and respond to any security issues that arise.

Future plans for OpenSea

As the popularity of NFTs continues to grow, OpenSea is focused on improving its infrastructure and scaling its platform to meet the needs of its growing user base. It is also working on adding support for more blockchain networks, such as Polygon and Binance Smart Chain, to increase the interoperability of NFTs and make it easier for users to trade across different blockchains.

OpenSea is exploring ways to improve the curation of its platform, such as by highlighting high-quality or unique NFTs, or offering more tools for creators to showcase their work. Besides, the platform is exploring new social features to enhance the community aspect, such as user profiles, messaging, and social media integration.

Finally, as concerns grow around the environmental impact of blockchain technology, OpenSea is exploring ways to reduce its carbon footprint, such as by adopting more energy-efficient blockchain protocols.

Final thoughts

OpenSea is a reputable and widely used platform for buying and selling NFTs. It can be a good starting point for those who are new to the NFT space, as it offers a wide range of NFTs for sale, user-friendly features, and a large and active community.

However, it's important to consider your individual needs and goals when choosing an NFT marketplace, and to approach NFT investments with caution and informed decision-making.

Overall, OpenSea is committed to continuous improvement and innovation in the NFT space, and is likely to remain a leading platform for buying and selling NFTs in the years to come.