OpenSea: The Reasonable Revolutionary | The Generalist

If we want to get a sense for where else the company might go, revisiting Coinbase’s roadmap might be a good call. In many respects, that seems to be OpenSea’s closest analogue — a centralized crypto exchange that serves as the natural on-ramp to the ecosystem, and is keen to play by the rules.

Richard Chen: It’s very difficult for OpenSea to be forked and vampire attacked. That’s because 99% of the engineering work is off-chain (e.g. search and discovery, infrastructure) and thus can’t be forked.

Richard Chen: Rarible launched a token for the sake of launching a token and didn’t think deeply about token economics. As a result they heavily incentivized wash trading from people farming the token, and for a few months last summer Rarible was doing more volume than OpenSea. But once the inorganic demand dried up then it became super clear that ... See more

With a permissionless approach to creation, a huge number of assets on the platform, and a strong filtering system, it looks like a business encircled by subtle but significant moats.

Richard Chen: People under-appreciate how important search and discovery is for NFTs. Each NFT project (e.g. Meebits, Lost Poets) needs custom search filters by attributes, which has to be added manually by OpenSea on a project-by-project basis. This creates a huge defensible UX moat for OpenSea that’s hard for other platforms to replicate. For exa... See more

Maria Shen: Capturing the “buy now” mechanism is important because the more “buy now” NFTs you have the more liquid your markets [are]...Opensea has the most “buy now”.

Mason Nystrom: OpenSea aggregated and offered a breadth of different assets. So while Rarible gained early volume when it launched because of its liquidity mining, Rarible didn’t aggregate other non-Rarible assets (i.e. Punks, Axies, art). So OpenSea became the go-to market/liquidity for many of these early assets. OpenSea also passed through royal... See more

Alex Gedevani: [OpenSea’s] emphasis on being a permissionless market for NFT minting, discovery, and trading [explains its market share accrual]. This enabled the long tail of creators to easily onboard given a low barrier to entry relative to other platforms. This approach is what scaled the supply sides of creators which attracted users and liqui... See more

Investors may want to watch out for new types of NFTs. If you’re feeling irked you missed out on CryptoPunks, Bored Apes, and Art Blocks, there may be some consolation. New formats are constantly being created; two experts suggest music and “intelligent” NFTs are worth watching.