Watch Out! Turmoil in the OpenSea NFT Marketplace

By
Guest
-
0
536
Death of Opensea
Death of Opensea

The Death of OpenSea

It was a Sunday morning, and I was in my garage working on my car, while listening to a Twitter Space call about the OpenSea NFT marketplace.  There was something different about this call.  The audience was huge, well over 2,000 people were participating in the call.  And there were a lot of Twitter users with those blue checkmarks. By the time I joined in, the call had already been going on for several hours.

The title of the Twitter Space call was “The Death of Opensea.”  What a great title!  That’s what drew me in.  As I listened, it became evident people were fed up with the persistent problems with the Opensea NFT marketplace. 

Hosts and listeners exchanged thoughts and ideas on how to make things better and how to replace Opensea with something else.  Much of the conversation revolved around the problem of having such a centralized NFT marketplace. 

After 30 minutes or so of listening I couldn’t hold back any longer.  I felt compelled to speak. People needed to know that there already is an answer to almost every problem being discussed on that call.  I had to share this answer with the 2,000 people or so listening. 

So, I pressed the button requesting to be allowed to speak.  And I waited, and waited, and waited.

The Opensea NFT Rapid Growth Created Huge Challenges

It isn’t difficult to understand why there’s so much turmoil in the Opensea NFT marketplace.  The reality is Opensea is a victim of its own success.  Opensea grew so fast that keeping up with growth alone was probably a monumental task. 

However, Opensea was perhaps destined to fail from the start for a different reason.  The host on that call could sense it, and many others on that call could sense it also.  But they couldn’t put their finger on the issue.

I don’t pretend to be an expert.  But, I have stumbled into some knowledge that opened my eyes to the problems with most NFTs and the problems with Opensea.  Better than just seeing the problem, what I actually stumbled into was the solution. This is what I wanted to share with those 2,000 listeners.  So, I kept waiting for my turn to speak. 

Numerous Problems with Opensea NFT Marketplace

When doing research for this article, I did online searches for problems with Opensea.  It takes but a few minutes to grasp how bad things are. 

There’ve been so many problems with OpenSea that a person could write an entire book on all the different issues. Again, some problems can be attributed to how fast OpenSea grew. However, other problems are fundamental.

The Problem People Don’t Want To Hear About

I had waited for over an hour and it was finally my turn to speak on the Twitter Space call.  Finally, this was my opportunity to let the audience know that the biggest problem with Opensea was its use of smart contracts.  I was also eager to let everyone know that I knew of a simple solution to this problem.  

Up to this point, speakers on this Twitter Space call had not been interrupted by other hosts or speakers.  But the moment I said that the problem with Opensea had to do with smart contracts, others were quick to interrupt.  I had to fend off several attempts to derail my exposition. 

Could people not see what was so obvious to me?  I did my best to present a cohesive argument, but I wasn’t allowed to engage in a real discussion.  The host and co-hosts moved on as fast as they could to the next person. Other speakers had been allowed 30 plus minutes to speak. I was given little time, despite presenting a very different perspective to the group. 

The call continued for what seemed to be over 12 hours long!  I had only listened for maybe 3 hours.  A few Twitter friends were listening when I spoke.  They agreed with me that for some reason the host and co-hosts didn’t want to hear my argument.  But why?

Well, it should have been obvious to me.  The influencers leading the call profit from the use of smart contracts.  They don’t want to hear me or anyone else speak of why smart contracts are the problem. They would love to have a decentralized alternative to Opensea, but it would need to be an alternative that doesn’t disrupt what they are doing.

The problem with Smart Contracts

Where do I begin? 

Smart contracts are too complex to be understood by the average NFT collector.  Smart contracts can be hacked, can have errors, require upkeeping, etc.  Most importantly, smart contracts don’t allow the NFT owner to have full control of their NFT.  The latter reason, in my opinion, is the biggest problem with smart contracts.  

Here’s the thing to remember: Smart contracts are the wrong tool for handling NFTs. 

I’ve written a couple of articles on some of the problems with smart contracts, which I am linking below, in case you want to learn more about this.

With all these problems, why DO we use smart contracts for something so simple as transferring digital images?  Answer: Because that’s what Ethereum did and that became the default answer.  And let’s not forget that thousands of people are earning millions of dollars in the NFT ecosystem involving Ethereum, smart contracts, NFTs, and marketplaces like Opensea.  Obviously, these savvy entrepreneurs have little incentive to truly solve the Opensea NFT marketplace problems.

The problem with Centralization

The other problem with the Opensea NFT marketplace is its centralized nature.  During that Twitter Space call numerous speakers made the case for decentralization.  Yes, a decentralized NFT marketplace sounds great!  But how do you create decentralization when dealing with smart contracts?  I argue that you can’t. The video below by an Ex-Google, Ex-FaceBook TechLead supports my point, at least in part.

The bottom line is that if you could create NFTs without having to rely on smart contracts, then decentralization of the NFT marketplace would have a chance.  I realize true and pure decentralization is probably unlikely, but I believe we can definitely get away from the extreme level of centralization occurring at Opensea today. 

Other NFT Marketplaces Dealing With Smart Contracts Will Experience Similar Challenges

Other NFT marketplaces such as Looks Rare, Rarible, etc will likely experience similar challenges to the challenges OpenSea is facing. Namely, these marketplaces are also dealing with smart contract based NFTs. And this alone forces these marketplaces to be more centralized than is desirable.

Also keep in mind that these marketplaces are trying to become an alternative to Opensea. To a large degree, they must be compatible with OpenSea. As a result, they have little incentive to be fundamentally different or to explore significantly different technologies.

An NFT Marketplace Void of Smart Contracts

Ultimately, the only real solution or alternative to OpenSea’s troubles is an NFT marketplace void of smart contracts. But is this even possible? YES!!!!

The answer lies within the Ravencoin (RVN) protocol.  Unfortunately, Opensea doesn’t want to hear this.  Why is that?  Well, it’s for the same reason the host and co-hosts of that call didn’t want me speaking.  They believe in the system that feeds them and they will die to protect it. 

As for me, I believe in the efficiency of the free market.  I believe a simple protocol, without smart contracts, is more efficient.  And I believe a higher level of decentralization is the best option. 

And it just so happens that that’s the ethos behind Ravencoin.  Ravencoin is a fork of Bitcoin and it is open source.  Ravencoin developers took the best crypto code and modified it exclusively for the purpose of creating assets and transferring assets.

The result is asset creation and transactions are handled at the base layer, without coding, without smart contracts. It is a simple and elegant solution.

With Ravencoin you can transfer an NFT as easily as you can transfer Bitcoin.  And when the NFT hits your wallet, all you have to do is to ensure you keep your keys.  If you have the keys to your wallet, then the crypto in the wallet and the NFTs in that wallet are yours. 

How Exactly Is Ravencoin the Solution to the Opensea Troubles?

First, when minting something on Ravencoin you can do it directly to the blockchain without having to deal with a third party.  You don’t need an NFT marketplace to do that for you. All you really need is the Ravencoin wallet with the minting feature.  I know of at least three wallets with these features, the Ravencoin Core wallet, the Mango Farm wallet, and the Stibits wallet. 

Second, once you mint something you can send it to anyone, directly.  All you do is transfer the asset, similar to how you would transfer Bitcoin. Below is a screenshot showing how easy it is to send an asset using the Mango Farm wallet.

But wait, where would that leave OpenSea?  You got it!  A Ravencoin NFT ecosystem could potentially be fully decentralized, therefore it could completely eliminate the need for OpenSea. But the reality is, users will still want an easy-to-use marketplace.  So I believe there will still be space for NFT marketplaces, but not fully centralized marketplaces like OpenSea. 

In fact, there’s one marketplace that is as decentralized as they come, Mellori.Market.  Think of Mellori as an NFT vending machine.  As a collector, you pick the NFT you like, you enter your receiving address and you send payment to the address provided.  At that point Mellori simultaneously sends you your NFT and sends the artist their payment for the NFT, minus Mellori’s fee. 

How cool is that?  No smart contracts, no code, no complex transactions.  This is extremely convenient and very decentralized. 

Below is a great video by my Twitter friend HypeManRVN showing you how easy it is to buy an NFT from Mellori.Market.

Conclusion

In conclusion, Opensea is in part a victim of its own success and in part a victim of smart contracts. Smart contracts are too complex and too vulnerable to hacks, attacks, etc. Ultimately, smart contracts make it very difficult for NFT marketplaces to be decentralized.

The real solution to Opensea’s troubles is for users to create NFTs without smart contracts. The only crypto protocol I know of that can do that is Ravencoin.

Unfortunately, Opensea NFT marketplace and other smart contract based NFT marketplaces don’t want to hear this. These marketplaces and the entrepreneurs becoming wealthy through the smart contract ecosystem aren’t incentivized to make significant changes.

In the end, I believe the efficiency of the free market will prevail and this will ultimately be the death of the Opensea NFT Marketplace.