Author: Revc, Golden Finance
Bull market liquidity begins to nourish the parched riverbed of the NFT sector.
Recently, TheBlock co-founder Mike Dudas revealed on social media that OpenSea has registered a foundation in the Cayman Islands. An anonymous researcher of the Azuki NFT series, Waleswoosh, also released screenshots of OpenSea's registration in the Cayman Islands. Typically, Web3 projects register foundations to prepare for token issuance, which has sparked speculation about upcoming tokens and user airdrops. However, OpenSea still faces regulatory enforcement from the SEC, leaving its token issuance prospects full of uncertainty. Additionally, OpenSea previously adopted traditional financing models, which have also somewhat limited its token issuance process. However, faced with competitive incentives from platforms like Blur and Rarible, it is challenging to gather liquidity without a points system. It is expected that OpenSea will adopt a relatively compromise scheme to benefit users.
The listing of Magic Eden injected some confidence into the NFT market. However, the current NFT trading market has moved away from the core narrative of the cryptocurrency industry. While the token price once hit a high of $10, it has now fallen back to $3.68. A large number of 'zombie projects' rushed to list recently, and the negative impact on the industry is still borne by users.
According to SosoValue data, influenced by Upbit's listing of MOCA, the price of MOCA surged by 380%, boosting the short-term sentiment of the NFT market. The current logic chain of token triple jumps has further strengthened, and investors should pay attention, as the market value growth of most MEME and Token follows the following paths:
Fermentation on Solana & Base chain - Binance & Bitget listings - Coinbase & Upbit listings
Once the king, OpenSea.
NFTs have always been regarded as the cornerstone of the creator economy and SocialFi sector. During the peak trading volume period, OpenSea accounted for 90% of the entire sector, but now only holds an average market share of less than 20%. With its unique culture and product positioning, OpenSea distinguishes itself from the trade-dominated Blur platform. Its outstanding user experience and UI design have attracted creators and artists, even becoming their first stop into Web3. If the NFT market recovers along with the cryptocurrency industry, OpenSea is expected to re-establish its core strategic position.
OpenSea was founded in 2017 by Stanford graduates Finzer and Atallah, initially as a Wi-Fi sharing startup. After encountering the concept of NFTs, they quickly shifted to the NFT market and secured their first round of financing in 2018. With the explosion of the NFT market in 2021, particularly the popularity of artworks like Beeple's, OpenSea rapidly became the industry leader, capturing over 90% of the market share. The platform's valuation once soared to $13.3 billion.
However, OpenSea's success did not last. The platform experienced frequent internal issues, including insider trading scandals and platform crashes. At the same time, external competition became increasingly fierce, with the rise of emerging trading platforms like Blur diverting a large number of users. With the overall trading volume of the NFT market declining and the cryptocurrency market in a bear phase, OpenSea's revenue and valuation also shrank significantly.
To meet challenges, OpenSea has launched a series of initiatives, such as layoffs and the launch of version 2.0. However, confidence in OpenSea has significantly declined. In addition to market and internal challenges, OpenSea is also facing intense scrutiny from regulatory agencies. The U.S. Securities and Exchange Commission (SEC) has initiated an investigation into OpenSea and requested a large volume of documents. The SEC's investigation mainly focuses on whether OpenSea considers NFTs as securities for sale. If deemed securities, OpenSea could face serious legal consequences. Additionally, tax authorities in multiple countries are also investigating OpenSea's tax issues. OpenSea's legal team is actively responding to these challenges, but regulatory risks remain a looming threat over the company.
OpenSea 2.0
Previously, OpenSea co-founder and CEO Devin Finzer announced that the NFT market is planning a comeback. Although the details revealed by Finzer are limited, he promised that the new version of OpenSea will be launched in December.
In addition to the usual user interface upgrades, the new version of OpenSea places more emphasis on optimizing the trading interface to cater to the habits of professional NFT investors, attracting significant liquidity into the market.
From the preview of the points mechanism, OpenSea's V2 version aims to encourage users to provide NFT liquidity through collection and trading. Additionally, the platform has designed points bonus systems to guide liquidity for specific projects. However, currently, this mechanism appears to be relatively conventional.
Review of Blur's airdrop rules
Blur enhances platform participation through multi-stage airdrops (referred to as 'Seasons') and introduces differentiated token distribution rules. OpenSea is expected to reference Blur's mechanism and combine it with current market trends and incentive goals.
Q1 Airdrop
First wave: For traders active in any Ethereum NFT market within the first 6 months before the launch of Blur. Users must list at least 1 NFT on the Blur platform within 14 days after the announcement to qualify for the airdrop.
Second wave: Rewards users who actively list NFTs on Blur. Listing scores are based on the likelihood of sale and collection activity, with listings with full royalties earning double points. Additionally, users can earn extra incentives through trading activities (5% reward for completing 3 sweeps, 50% reward for completing 6 sweeps).
Third wave: Mainly rewards users bidding on NFTs on Blur, aimed at increasing platform liquidity and participation.
Q2 Airdrop
Blur introduced a loyalty scoring system to encourage users to trade exclusively on Blur. User loyalty and the volume of NFTs listed will determine reward distribution. A total of 300 million $BLUR tokens were airdropped, worth approximately $146 million.
Q3 Airdrop
Supported by the Layer 2 network Blast, users accumulate points through listing, bidding, and lending NFT activities. Additionally, users holding $BLUR can also receive points rewards.
Referencing Blur's airdrop experience, users can prepare in the following ways to obtain potential OpenSea token airdrops:
Provide liquidity for NFT projects with stable floor prices and active trading volume, focusing on the return expectations of potential token issuance projects.
List NFTs, even if setting prices far above the market, to minimize the situation of NFTs lingering in wallets for long periods.
Focus on NFT projects that interact frequently with OpenSea, especially those with higher royalties, as OpenSea aims to attract more creators.
Actively participate in the usage scenarios of OpenSea points or tokens to promote token circulation and ecological applications.
NFT project token issuance wave
As NFT floor prices rise, trading thresholds are also continuously increasing. Token issuance has become an effective tool for expanding community audiences and increasing market liquidity. By combining NFTs and tokens, project teams utilize token incentive mechanisms to form an ecological closed loop, attracting user participation and enhancing liquidity. Data shows that the market value and trading volume of a project's tokens are usually higher than that of the NFTs themselves, reflecting the high demand and liquidity advantages of tokens in the market.
Note: Due to the complexity of the NFT ecosystem and IP rights, the rights of NFTs and tokens are not completely aligned. The above data is for reference only, and participants in such projects should fully assess potential risks.
Summary
Currently, the activity level of the NFT market is recovering, with recent trading volume exceeding $200 million; however, there is still significant room for growth compared to the trading volume peak of the previous cycle. If blue-chip NFT projects are viewed as undiscovered alpha assets at this moment, the new version of OpenSea and the points incentive program are expected to inject new capital flow and user vitality into the NFT market.
