It’s fair to say that the NFT space has lost a lot of its shine over the past few years, but that hasn’t stopped some founders, investors, and projects from moving forward in hopes of rising again. OpenSea was one of the first NFT marketplaces to gain significant attention and market share, and its CEO Devin Finzer is still betting big on the space.
On January 1, 2022, global NFT sales peaked at $23.73 billion. Two years later, by the first day of 2024, their market value had fallen by 94% to just $1.4 billion.
The drop in sales obviously has an impact on the revenue side of OpenSea’s business, but Finzer said it’s not something the company is “highly focused on,” and instead it’s working to improve its core product and user engagement, and bring on new existing businesses — efforts that “will lead to higher sales,” he told me recently on TechCrunch’s Chain Reaction podcast.
The NFT market exploded in 2021 when everyone and their grandmother was buying NFTs of profile pictures and digital art, but Finzer believes these are early use cases and that “we still have a long way to go in terms of representing all the broad range of things that NFTs can represent.” He said, “Gaming is an example of a category that is still in its early stages.”
Founded in 2017, OpenSea has quickly become one of the world’s best-known and best-funded NFT marketplaces, having raised more than $400 million in total, with backers including venture capital firms such as Andreessen Horowitz and Paradigm, as well as celebrities such as Kevin Durant and Ashton Kutcher.
But no amount of money can buy lasting success, a reality Finzer recognizes, noting that his company is working to fine-tune its products and focus on the long term.
“Customers come initially for the product experience, and if the product continues to meet their needs and improves as the space evolves, then they’ll stay,” he said.
According to DappRadar data, OpenSea has sold more than $67.24 million in sales and $36.46 billion in trading volume since its inception, making it the third-largest NFT marketplace in the past 30 days, behind only NFT Marketplace and Blur, with a trading volume of approximately $100 million.
Finzer admitted that the things he is most loyal to are companies and products he has used for a long time that have improved their user experience, and "the long-term way to increase user loyalty is actually to continue to build strong products."
Looking ahead, Finzer is most excited about web3 gaming and “physical items represented by NFTs,” two areas he believes will become the most prominent use cases in the NFT space in 2024.
“If you look at the existing market for rare physical sneakers, it’s actually quite active, with a whole community of people who love buying and selling these physical items.”
“So a really cool use case for physical is you take a physical pair of sneakers, create an NFT, and you can buy and sell that NFT as many times as it can flow between people and then trade it, actually redeem the physical item,” he said.
Finzer said OpenSea has been working with a number of platforms to launch physical and digital collectibles, “where there’s more opportunity to explore and more opportunity to grow.”
Finzer said that despite the flaws of the NFT market, OpenSea hopes to stick to its original mission - to foster an open digital economy and "achieve the holy grail of a strong user experience," which he called a "broad vision" but noted that it outlines OpenSea's goal of building blocks for "all kinds of different economies" in the NFT space.
“It’s not just art and profile pictures, it’s actually representing all sorts of different things on-chain… and then there are things we haven’t even imagined yet.”
Finzer added that the ultimate hope is to enable new use cases, innovations, and new jobs in the future, “We really see NFTs as a universal building block for a whole new digital economy, and I think we’re still at the beginning of that trend.”
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