OpenSea CEO considers FTX Fallout a Wake up to Decentralization and Opportunity for Crypto Refocus on Trust
OpenSea chief executive Devin Finzer considers the FTX collapse as an opportunity to refocus on the decentralization benefits. Finzer reassured users that the top-ranked NFT marketplace would enforce the creator royalties despite rival platforms expressing pessimism.
The chief executive admitted the sudden FTX downfall spawned a contagious meltdown experienced across the crypto industry.
Beyond the individual users laying claim to the trapped digital wealth worth billions of dollars, several companies have admitted liquidity crunch attributed to the exposure to FTX. In particular, crypto lender BlockFi has announced filing for Chapter 11 bankruptcy while claiming billions of dollars potentially forever lost. Although tragic, Finzer considers the effect of having far-reaching damage across the crypto space. However, he dismissed rumors of OpenSea’s exposure to the collapsed FTX and affiliate Alameda Research.
Finzer emphasized that the compounding wreckage caused by the FTX crash should enlighten the crypto industry to rebuild trust and seize the opportunity to embrace decentralization.
OpenSea Commitment to Enforce NFT Creator Royalties
Finzer considers the maturity of the broader crypto ecosystem and NFTs to rest upon nurturing trust with users. He added that the current crypto market turmoil caused by FTX’s downfall contagion provides an ideal opportunity for NFTs to nurture trust.
The remark arose from OpenSea’s commitment to enforcing creator royalties realized from NFT sales. The announcement is spawning concern from rival marketplaces that suspended royalty fees. OpenSea announcement challenges rival marketplaces to honor creator royalties being 5-10% of the sale price.
OpenSea dismisses the decision by rival marketplaces to stop remitting royalties to creators, citing the dramatic shift in the industry. Finzer considers OpenSea’s decision to enforce royalties prompted by the overwhelming feedback conveyed by NFT creators. Finzer acknowledges that pledging to pay royalties is paramount to winning and retaining trust with the NFT creators.
OpenSea Enforcing Decentralization
The Wednesday address by Finzer portrays decentralization as a critical element to prevent NFT marketplaces from retaining custody of creators’ assets when listing and trading. The remark targeted Solana-based Magic Eden and other Web3 builders for continuing to hold listed NFTS within escrow wallets.
Finzer considers such a move risky in the wake of the FTX crash, where its NFT marketplace has trapped NFTs that rightful owners cannot withdraw. Finzer lauds OpenSea’s decentralized system for smart contracts as it allows users to exercise self-custody rights, unlike centralized platforms identified with opaque authority.
Royalties Enforcement in NFT Ecosystem
Finzer demonstrated OpenSea’s strategic enforcement of royalties through its blocklisting tool that allows Ethereum-based NFT creators to deny access to marketplaces that fail to honor royalties. The blocklisting compelled X2Y2, a rival marketplace, to adopt royalties to restore access to the Ethereum NFT ecosystem.
Finzer regrets the blocklist enforcement tool is challenging to develop given the unique blockchain infrastructure of Solana. He considers breaking the dominance of Magin Eden in the Solana NFT ecosystem to embrace Metaplex idea to introduce an NFT asset class that compels the on-chain payment of NFT creator royalties.
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