OpenSea, one of the most prominent online marketplaces for non-fungible tokens, is facing controversy again. A few months ago, one of its employees resigned for exploiting insider information for profit. The company caused a stir again when it suddenly announced it was restricting its free minting tool.
Recently, OpenSea said that users would have a limit of creating five collections with 50 NFTs per collection. The revelation was not popular among OpenSea users, and the platform quickly reversed its decision. That said, the company provided some justification for the changes on its free tool.
In a Twitter thread seen by Vice News, OpenSea said more than 80 percent of the NFTs recently created on its free minting tool involved plagiarized work, fake, or spam.
The Minting Tool
The “lazy minting” tool was first created in 2020 to make it easier for artists of simple ways to get into the NFT space by charging no upfront “gas fees.” Gas fees refer to prices miners pay to write new data on a blockchain. However, OpenSea stated that it had recently seen overwhelming misuse of the feature in staggering numbers. More than 80 percent of NFTs created or minted with its tool were plagiarized works, fake collections, and spam.
In response, the company revealed that it was limiting the amount of NFTs users could create. The decision was seen by backlash from its community, with users complaining that they could not complete their collections or upload new work. OpenSea had to cancel the limit and apologize to its users on that day.
“Every decision we make, we make with our creators in mind. We originally built our shared storefront contract to make it easy for creators to onboard into the space,” OpenSea announced on Twitter.
OpenSea also said that they didn’t make the decision lightly. And that they made the change to address feedback received from the entire community.
OpenSea’s disclosure illustrates the rising problem artists and photographers encounter over NFTs. Scammers and bots have targeted many of these creators, stealing their artwork and uploading it to marketplaces like OpenSea to create collections and earn from it. According to PetaPixel, some creators have objected that OpenSea is slow to process takedown requests and provides poor support to victims of theft and fraud.
The company said it was working on several solutions to support its creators and deter bad actors from abusing its free tool. Moving forward, OpenSea promised its users to preview those changes before rolling them out.
About OpenSea
OpenSea is an online non-fungible token marketplace based in New York City. Devin Finzer and Alex Atallah established the NFT platform in 2017. The company provides a marketplace that allows NFTs to be sold directly at a fixed price or through an auction.
Some of the company milestones include:
- In February 2021, OpenSea revenues were $95 million, in March the equivalent of $147 million, and in September $2.75 billion. As of January 2022, OpenSea has a valuation of $13.3 billion.
- The company released an Android and iOS app in September 2021. The app allowed browsing the marketplace but not buying or selling NFTs. They admitted that an employee engaged in insider trading in the same month.
- On January 27, 2022, the company announced it would limit the number of NFTs a user can make through the free minting tool, but the next day it reversed the decision after a backlash. OpenSea later admitted that 80 percent of NFTs made with the feature were plagiarism or spam.
