The widespread adoption of NFTs (Non-fungible Tokens) is on the rise, necessitating the creation of a marketplace such as OpenSea where interested investors can mint, buy, and sell these types of digital assets. For those unfamiliar with the subject, you can learn more about NFTs here.
Similar to how an exchange market works for cryptocurrency, the OpenSea platform is a marketplace for NFTs, as well as other rare digital items and crypto collectibles. In this article, we will explain in detail how the OpenSea platform works. However, let’s begin with a commonly asked question – “How does the OpenSea platform work?”
Understanding the OpenSea platform
Founded by Devin Finzer in 2017, OpenSea is the first and largest peer-to-peer online decentralised marketplace for NFTs. The start-up participated in the 2018 winter edition of Y-Combinator start-up school (YC W18), after which it raised its initial funding round of $2.12 million.
Meanwhile, the company has since raised additional funding with the most recent being $100 million at a $1.5 billion valuation, making it unarguably the largest (by capitalisation) among its peers.
Users may utilise the decentralised platform to create, discover, buy, and sell exclusive NFTs as well as other crypto products such as collectibles and other virtual assets protected on a blockchain.
OpenSea offers a broad variety of available products across more than 200 categories, proving its market leadership, and it promises to give the best pricing for new items.
Some of its most unique categories include sales of decentralised domain names, 3D virtual worlds such as Decentraland, and even sport NFTs.
This brings us to the question of how does the OpenSea platform work?
How does OpenSea platform work?
To clearly describe how the OpenSea platform works, we will look at it from the point of infrastructure, commission, cryptocurrency, and wallet.
To begin with, the decentralised platform is built on NFT technology and runs on the Ethereum blockchain. Because OpenSea is a decentralised platform, users may interact with it using smart contracts. This also implies that they are not only able to secure their digital assets, but are also able to take custody of their items in their chosen wallet.
In addition, users can list their items on the marketplace even if such items have been listed elsewhere.
Commission-wise, OpenSea gets a 2.5 per cent cut of every item sold on the open platform. The platform boasts some of the lowest transaction rates in the space.
In terms of cryptocurrency utilised on the platform, OpenSea accepts ETH and DAI as the network’s default cryptocurrencies for exchange and transactions. However, in addition to ETH, the platform accepts more than 200 additional cryptocurrency payment types such as DAI, USDC, SAND, MEM, REVV, MANA, and so on.
How to set up an OpenSea account
Also, as with most decentralised finance applications (dApps), getting started on the OpenSea platform necessitates the usage of a web3 wallet like MetaMask. This way, a user can interact with as many cryptocurrencies or Ethereum-based applications as possible.
After setting up your web3 wallet, you can proceed to fund it with ETH if you are a serious investor. Afterwards, a user can connect a MetaMask wallet or any other wallet of choice to the OpenSea platform.
Once done with the above, a user can head over to the marketplace section which is at the top of the website, and proceed to buy NFTs or any other virtual item of choice, which has to be approved on MetaMask for checkout.
OpenSea’s dedicated search bar, and cross-chain ambition
While the platform arguably hosts the largest unit of NFTs, as well as other virtual assets, users can make use of a dedicated browser page to discover new items, NFTs, and many more. For instance, if you had stumbled on a particular NFT elsewhere, you can easily make use of the search bar and discover if it is available on the site.
To make the searching experience a very seamless one, users can filter the search by category, collection or blockchain network as well as current status.
It is also important to note that while the platform was initially solely powered by Ethereum smart contract, OpenSea has recently added support for Klaytn Chain, further validating its goal to become a cross-chain marketplace.
Furthermore, the platform has integrated the Ethereum layer-2 protocol Polygon (MATIC), which greatly helps in reducing gas fees while speeding up the processing time.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.