A BreakThrough Platform for Minting, Discovering, and Buying NFTs
How OpenSea Created It's Circle of Success
OpenSea’s emphasis on being a permissionless market for NFT minting, discovery, and trading [explains its market share accrual]. This enabled the long tail of creators to easily onboard given a low barrier to entry relative to other platforms. This approach is what scaled the supply sides of creators which attracted users and liquidity, both on primary and secondary markets. If Uniswap is the marketplace for any altcoin, then OpenSea is the marketplace for any NFT.*
Alex Gedevani
The Drivers of OpenSea’s Takeoff
At first glance, its offering is a simple one. A marketplace to buy and sell NFTs. There are many of these and OpenSea was early but not first. So why did it take off so spectacularly?
A virtuous circle driven by:
The ease of listing assets
Leading to more assets being listed than other platforms.
Robust filtering and cataloging capabilities to help buyers navigate listings to find what they wanted
Mason Nystrom of Messari sums it up nicely
OpenSea aggregated and offered a breadth of different assets. So while Rarible gained early volume when it launched because of its liquidity mining, Rarible didn’t aggregate other non-Rarible assets (i.e. Punks, Axies, art). So OpenSea became the go-to market/liquidity for many of these early assets. OpenSea also passed through royalties from other platforms, provided a great indexer, and great UI for filtering assets, verified contracts, and a way for users to create NFTs.*
This Virtuous Circle Generates a Defensible Moat
When you make it easy to mint NFTs lots of people do. Because you have lots of listings people show up when they want to buy NFTs. By making it easy to find and buy NFTs for visitors you establish a reputation for ease of use with visitors and become there default presumption on where to go when you are looking for them.
Instead of trying to optimize early. OpenSea is leaning into things that don’t scale to create a business model competitors will be hard-pressed to replicate.
People under-appreciate how important search and discovery is for NFTs. Each NFT project (e.g. Meebits, Lost Poets) needs custom search filters by attributes, which has to be added manually by OpenSea on a project-by-project basis. This creates a huge defensible UX moat for OpenSea that’s hard for other platforms to replicate. For example, on Rarible I can’t even filter Meebits for skeletons that are wearing headphones; thus it doesn’t make sense to do my NFT shopping on one platform and then checkout on a different platform. By having a great NFT shopping user experience on OpenSea, users stay on the platform to do the actual NFT trade with OpenSea’s smart contract.*
Richard Chen
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*Quotes excerpted from The Generalist Profile of OpenSea