Interviewer: Kelly Digregorio, VP and Head of Content Partnerships at OpenSea
Interview and author: Wendy, Foresight News
"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, and on the other hand, OpenSea faced strong competition from emerging rivals such as Blur. In November last year, OpenSea had already slashed its 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’s a lot of interesting activity around utility NFTs on OpenSea. There are a lot of interesting developments around utility NFTs for OpenSea. We recently announced a partnership with Gunzilla Games where the OpenSea marketplace 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. This is a very big development in the Web3 gaming space.
We also recently partnered with Coachella to launch a collection of pass NFTs before the start of the Coachella music festival, which can be purchased on a dedicated collection page on OpenSea. We also launched a new feature to create a crypto wallet using an email earlier this year, so users can also easily purchase NFTs. Throughout the Coachella music festival, Coachella fans completed more than 55,000 tasks, including purely digital tasks and live tasks throughout the festival venues. Users can collect NFTs, accumulate points, and win merchandise, such as VIP passes for Coachella and various other fun prizes.
OpenSea has also recently deployed or upgraded several times for the NFT market. We upgraded from Seaport 1.5 to Seaport 1.6, and the technology behind this upgrade is something called pre-execution zone hooks. What this does is allow a zone to be checked for a specific flag before executing a transaction, such as the flag being 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 these transactions are conducted on OpenSea or other markets or aggregators that have integrated the Seaport protocol. If you are interested, you can click this reference.
We also launched ERC-721C compatibility, a standard introduced by Limit Breaks that allows creators to implement programmable, enforceable creator returns 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're really looking to move forward with.
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've been experimenting with burn-and-redemption technology on OpenSea. For example, we've done some airdrops, including a game airdrop with Captain & Company, where you could burn an NFT that represented a loot box, and then you'd get three NFTs that were essentially game components for the Captain & Company game. We also have a partnership with Coachella on a burn-and-redemption feature where you can burn your NFTs to get VIP passes or merchandise boxes. There will be other partnerships coming up that use the burn-and-redemption mechanism in different and novel ways. It's really about giving consumers something beyond the NFT itself, right? Obviously, owning NFTs as collectibles is very interesting.
But what is the utility? What can you get with this NFT? Either 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 we broadly call consumer loyalty, but that could include companies transitioning from Web2 to Web3, or more intra-Web3 partnerships.
A good example is Samsung just launched their Web3 TV bundle, where they give away NFTs as part of the package for anyone who buys a Frame TV or a Web3 TV, and some of these NFTs can be redeemed for hardware like Ledger wallets and other freebies. Samsung also launched an 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 gamers themselves — they’re all very tech-savvy. And games allow for a lot of diversity in NFTs because there are all kinds 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 from Gunzilla Games and Shrapnel crossing over between Web3 and traditional distribution models (like consoles) being very interesting in my opinion.
I think there's a lot of potential there, NFTs can be part of a game, they can be part of a fun experience like Coachella Quest. So I think there's growth there without necessarily needing to be formally labeled 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 come up with a way 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 may 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. This is another growth opportunity that people may not necessarily talk about explicitly as NFTs, but NFT technology will be an important force in driving intellectual property 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 where NFTfi ends up. NFTfi is likely to be just the subdivided ownership of NFTs, as was discussed two or three years ago. So it will be interesting to see what NFTfi ends up becoming and how different companies create value in this space.
I find the name NFT fi very appealing. Obviously, we already have DeFi, and now NFT fi, which seems to be related to more specific or monetized value associated with NFTs. However, with marketplaces like OpenSea, secondary trading of NFTs has been the norm. I think it remains to be seen how NFT fi will manifest itself specifically. To me, the term is still a bit vague.
Foresight News: Since we are talking about Blur, I would like to ask, how do you view the competition between you?
OpenSea: I am the VP of Business Development, and VP of Global Content Partnerships is my official title. I would say that OpenSea and Blur are different products and we have different focuses.
We're focusing a lot on creator tools. For example, we launched OpenSea Studio in October of last year. We're also focusing on 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 the OpenSea wallet we launched in partnership with Privy is really a differentiator for users in terms of user experience. Right now we're doing a big campaign with Base called "GetBased." We have a lot of really interesting Base creators launching all kinds of NFTs, most of which don't have a fixed issuance quantity and can be minted continuously. We're also implementing the Farcaster frame functionality on Warpcast.
OpenSea has made a conscious effort to be very close to creators and very close to users. We think of this as a market differentiator, to really provide a high-quality, robust experience. We care a lot about trust and security, and we 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'm not the right person to answer this question, but our CEO didn't say this directly. I think the message 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, who didn't say OpenSea was for sale.
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's potential for growth in a lot of different regions depending on the use case or different verticals. For example, there's a lot of gaming activity in Japan and South Korea. In North America, there's a strong foothold in art creation, generative AI, and so on. So depending on the vertical, certain regions are more inclined in that particular direction. I think it's an evolving landscape.
Foresight News: This year is a very special year, as it is the year of the US election. We see 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 probably more so cryptocurrencies — will become a political topic in elections. That may have driven some of the legislation that was recently passed in the Senate. I don't know how it will develop, 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 the primary focus of OpenSea. Because it is known as a trading market for being very trustworthy. And we have taken strong trust and security measures to make participants in the industry - both users and creators - feel safe and trustworthy.
