OpenSea co-founder and CEO Devin Finzer announced this afternoon that the NFT market is laying off around 20% of its employees. Finzer did not specify how many people there were. A January Forbes article celebrating the $ 2.2 billion net worth of Finzer and his co-founder Alex Atallah (each) claimed the company employed more than 70 people, but an OpenSea spokesperson told The Verge that 230 employees will remain in the company.
When we unveiled OpenSea in February, the company had just received $ 300 million in additional funding with a valuation of $ 13.3 billion and was the dominant player in token sales, earning a $ 2.5% commission on trade.
However, a sustained decline in activity and prices has made headlines as NFT sales are flattening out or falling off the precipice, as many companies that have adopted or offered them have reacted to the whole concept. Recently, Reddit rolled out an NFT Collectible Avatar feature without openly mentioning the term, and just today a Sony marketing executive had to sweep away player concerns that a new digital collectibles feature would bring blockchain and NFT. on his PS5.
Today is a tough day for OpenSea, which is laying off about 20% of our team. Here is the note I shared with our team this morning: pic.twitter.com/E5k6gIegH7
Devin Finzer (dfinzer.eth) (@dfinzer) July 14, 2022
It is the latest in a line of Web3 companies that have grown rapidly in recent years as cryptocurrency prices have skyrocketed and are now laying off staff. Finzer said the company was able to directly notify affected employees in person before announcing layoffs, generous severance packages, health care for the rest of the year, job placement assistance, and expedited stock transfers. . In his note, Finzer says these changes will give the company up to five years of lead if this crypto winter lasts.
Coinbase, a cryptocurrency exchange that launched an NFT market earlier this year, laid off 1,100 employees last month and GameStop opened its NFT store last week, just days after a streak was announced. of layoffs.
While the entry of new competitors has made things more difficult, coupled with the increased use of alternative storefronts like LooksRare, OpenSea has had a number of problems lately, in addition to plummeting cryptocurrency prices and many NFTs:
- A bug allowed attackers to steal expensive items from their owners at prices significantly lower than their list prices.
- In February, a phishing attack stole NFTs worth up to $ 1.7 million (at the time).
- Former product manager Nate Chastain, who was fired last fall for abusing his access to purchase NFTs shortly before they were featured on the main OpenSeas site (and will likely suddenly increase value accordingly), has now been arrested for insider trading.
At the end of June, an employee of his email provider stole the email addresses of OpenSea users, increasing the risk of falling victim to phishing attempts.
Although the general step of non-fungible tokens is their ability to certify ownership of digital assets and their decentralization of not relying on a single source of verification, OpenSea has had to work to address authenticity. It removes tokens for works with content that creators are forbidden to sell or that simply mimic other NFTs like Bored Ape Yacht Club.
It has also begun to implement a new SeaPort protocol designed to dramatically reduce the annoying gas charges that can increase during peak demand periods and recently revamped its profile pages.