"Our CEO did not say OpenSea was for sale," OpenSea Vice President and Head of Content Partnerships Kelly Digregorio clarified in an interview with Foresight News during the recent Consensus conference. She further explained: "I think the transmission of information in that interview may have been influenced in some way, causing the media's expression to be inconsistent with the original intention or direct statement of our CEO."
In an interview report published in January this year, crypto media DLNews quoted OpenSea CEO Devin Finzer as saying that he remained "open-minded" about acquisitions.
When this report was widely reprinted and quoted, the public did not show much surprise. On the one hand, the NFT market was cold during the bear market. On the other hand, OpenSea faced strong competition from emerging rivals such as Blur. In November last year, OpenSea had drastically cut the total number of employees by 50%.
Although Animonca Chairman Yat Siu believes that the overall NFT market is not as cold as the outside world imagines, and has improved as the overall crypto market has recovered, it still faces considerable challenges.
In this market environment, how does OpenSea compete and develop? Foresight News had a further conversation with Kelly Digregorio on these issues.
Foresight News: When I attended Consensus two years ago, NFT was a very hot topic, but now the heat seems to have declined a bit. However, you mentioned just now that you are still building some very exciting things. Can you share more with us?
OpenSea: There is a lot of interesting activity around practical NFTs on OpenSea. There are a lot of interesting developments around practical NFTs for OpenSea. We recently announced a partnership with Gunzilla Games, where the OpenSea market will integrate their Avalanche subnet, enabling players and OpenSea users to trade in-game NFT assets.
The first project to launch on GUNZ will be Gunzilla Games’ cyberpunk-style battle royale game Off The Grid, which will be released on PC, PlayStation 5, and Xbox Series X|S this year, which is a very big development in the Web3 gaming space.
We also recently partnered with Coachella to launch a series of pass NFTs before the start of the Coachella Music Festival, which can be purchased on a dedicated collection page on OpenSea. Earlier this year, we also launched a new feature for creating a crypto wallet using an email, so it is also very simple for users to purchase NFTs.
Throughout the Coachella festival, Coachella fans completed more than 55,000 tasks, including purely digital tasks as well as on-site tasks throughout the festival venues, where users could collect NFTs, accumulate points, and win merchandise such as VIP passes to Coachella and a variety of other fun prizes.
OpenSea has also recently made several deployments or upgrades for the NFT market. We upgraded from Seaport 1.5 to Seaport 1.6. One of the technologies behind this upgrade is something called pre-execution zone hooks.
What it does is it allows us to check before a transaction is executed whether a certain flag exists in a certain area, for example, whether the flag is a creator fee, that is, whether there is a creator fee on the secondary market, so we are able to enforce creator fees for secondary sales in all transactions executed on the Seaport protocol, whether they are conducted on OpenSea or other marketplaces or aggregators that have integrated the Seaport protocol, allowing for the enforcement of creator fees for secondary sales.
We also launched ERC-721C compatibility, a standard introduced by Limit Breaks that allows creators to implement programmable, enforceable creator yields on-chain, and also supports creators to implement custom logic, which is a boon to the gaming community as many gaming companies decide to adopt ERC-721C in their gaming infrastructure. We have been working on these developments over the past six months.
But one thing we're really focused on is OpenSea 2.0, OpenSea 2.0 will rebuild the architecture in many ways to allow us to deploy faster for users, creators, game companies, and other stakeholders in the industry, it will allow us to integrate chains faster, we integrated Blast a few months ago and we also recently integrated Sei, so the ability to quickly integrate other chains is something we really want to move forward.
We are very excited about the various use cases happening in the NFT space, particularly around ERC-721C for game development, and we are interested in developments in tokenized assets, real-world assets, ticket tokenization, merchandise tokenization, and more.
We experimented with burn-to-redemption technology on OpenSea, for example, we did some airdrops, including a game airdrop with Captain & Company, where you could burn an NFT that represented a loot box, and then you would get three NFTs that were essentially game components for the Captain & Company game.
We also have a partnership with Coachella on a burn-and-redeem feature where you can burn your NFTs to get VIP passes or merchandise boxes, and there will be other upcoming partnerships that use the burn-and-redeem mechanism in different and novel ways, which is really giving consumers something beyond the NFT itself, right? Obviously, owning NFTs as collectibles is very interesting.
But what is the utility of this? What can you get with this NFT? Either it's a physical item shipped to your house, or you can play it in a game, or interact with some experience, so I think NFTs are still an interesting thing that brings engagement, choice, and novelty to consumers.
Foresight News: From the outside, the NFT market seems to be a bit cold now, but we know that the entire crypto market is gradually warming up now. Do you see similar trends in the NFT field? If so, what are the main drivers? You mentioned a lot about games. Is this the main area you are focusing on at the moment?
OpenSea: The three areas we’re focusing on right now are gaming, Web3 native areas, and what you’d broadly call consumer loyalty, but that could include companies transitioning from Web2 to Web3, or more intra-Web3 partnerships.
A great example of this is Samsung just launched their Web3 TV bundle where they’re giving away NFTs as part of the package for anyone who buys a Frame TV or a Web3 TV, and some of these NFTs are redeemable for hardware like Ledger wallets and other goodies.
Samsung also launched the NFT Gallery TV app that allows users to display NFTs in a personalized way, so I think consumer loyalty can be a broad category, and it doesn't necessarily mean that you only focus on large Web2 companies.
Foresight News: Why are games so important to OpenSea? Is it because of the market size or something else?
OpenSea: Obviously market size is obviously a factor, the gaming community - whether it's game studios, game developers or the gamers themselves - they are all very tech savvy, and games allow for a lot of diversity in NFTs because games have a variety of different components and ways to integrate into gameplay, which allows NFTs to play a variety of functions in games, which is why I think games are an interesting use case.
There are a lot of possibilities in the gaming space, with games like Off the Grid and Shrapnel from Gunzilla Games crossing over between Web3 and traditional distribution models (like consoles) being very interesting in my opinion.
I think there's a lot of potential in that area, NFTs can be part of games, they can be part of fun experiences like Coachella Quest, so I think there's growth there without necessarily needing to be formally labeled as an NFT.
Foresight News: Now there are some star projects that may bring some changes to the NFT market, such as Story Protocol. We recently interviewed their co-founder, who believes that projects like Story Protocol are likely to help the recovery of the NFT market. What do you think? Do you have a cooperative relationship?
OpenSea: We don't have a formal partnership with Story Protocol. I'm very interested in what Story Protocol is deploying. From a macro perspective, they are focused on the provenance of intellectual property and believe that NFTs can essentially support this use case. Companies like Story have proposed a method of how NFTs can be used to prove the provenance of AIGC or AI-generated content.
I think this is another example of where NFT technology could play a huge role in tracking and establishing intellectual property, being able to transfer those rights between entities and have that information encoded on the blockchain is another growth opportunity where people might not necessarily talk about it explicitly as an NFT, but NFT technology is going to be a big force in driving IP provenance tracking and rights transfer.
Foresight News: In addition to IP tracking, I think people have been talking about the concept of NFTFi since the last cycle, and there are also some such projects built on the Blast ecosystem. What do you think of the trend of NFTFi? Will OpenSea embrace this trend?
OpenSea: I think it remains to be seen how NFTFi ultimately develops. NFTFi is likely to be just a segmented ownership of NFTs, as was discussed two or three years ago, so it will be interesting to see what NFTFi will ultimately become and how different companies create value in this track.
I find the name NFTFi to be very appealing, obviously we already have DeFi and now NFTFi has emerged, it seems to be related to more specific or monetized value associated with NFTs, however, with markets like OpenSea, secondary trading of NFTs has been the norm, I think it remains to be seen how NFTFi will manifest itself specifically, to me, the term is still a bit vague.
Foresight News: Since we are on the topic of Blur, I would like to ask, how do you view the competition between you?
OpenSea: I am the VP of Business Development, VP of Global Content Partnerships is my official title, and I would say that OpenSea and Blur are different products and we have different focuses.
We’ve been focusing a lot on creator tooling, for example, launching OpenSea Studio last October, and being able to enforce creator fees for secondary sales on the Seaport marketplace and aggregators, so we decided to upgrade from Seaport 1.5 to 1.6.
I think in terms of user experience, the OpenSea wallet that we launched in partnership with Privy has really been a differentiator for users, and now we’re doing a big campaign with Base called “Get Based.”
We have a lot of really interesting Base creators launching various NFTs, most of which have no fixed issuance quantities and can be minted continuously, and we are also implementing Farcaster frame functionality on Warpcast.
OpenSea has made a conscious effort to be very close to creators and very close to users. We think this is like a market differentiator and really provide a high-quality, robust experience. We pay great attention to trust and security and have launched the Copymint detection system to provide the best experience for users and creators.
Foersight News: Some media reported that your CEO publicly expressed his willingness to sell OpenSea. Is this true? I'm not sure if you are the right person to answer this question, but I'd like to know why? What kind of potential buyers are you looking for?
OpenSea: I am not the right person to answer this question, but our CEO did not say this directly. I think the transmission of information in that interview may have been influenced in some way, causing the media to express it differently from the original intention or direct statement of our CEO. The CEO did not say that OpenSea was going to be sold.
Foersight News: Since you are responsible for global business development, from a regional perspective, are there any specific regional markets where OpenSea or NFT in general has a higher growth rate?
OpenSea: I think there is potential for growth in many different regions depending on the use case or different verticals, for example, there is a lot of gaming activity in Japan and South Korea, and in North America there is a strong foothold in art creation, generative AI, etc., so depending on the vertical, certain regions are more inclined in that particular direction, and I think this is an evolving landscape.
Foresight News: This year is a very special year. It is the year of the US presidential election. We have seen a lot of discussions about politics, and many politicians, such as Trump, have launched NFTs. How do you think this special political environment will play a role in the NFT market?
OpenSea: NFTs in general - and maybe cryptocurrencies more so - are going to be a political topic going into the election, and that may have driven some of the legislation that was recently passed in the Senate, and I don’t know how it’s going to play out, but I think it’s becoming a more political issue.
Foresight News: What about regulation? Several top companies in the industry, such as Uniswap, Coinbase, and Consensys are fighting lawsuits with different regulators, and OpenSea is a leader in the industry (in the NFT field). How do you view the risks of US regulation?
OpenSea: Regulation is a topic that is always discussed, but it is not a primary focus for OpenSea because it is known as a very trustworthy trading market, and we have strong trust and safety measures in place so that participants in the industry - both users and creators - feel safe and trusting.
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