This is the topic that has enthralled crypto social media this week, after OpenSea, the largest marketplace for non-fungible tokens, admitted an employee was trading on private information after a few Twitter users discovered bread crumbs pointing to criminal behavior.
This news took the entire crypto market by storm when the individual was marked as Nate Chastain. He is the product head at Opensea, who apparently bought front-page NFT drops even before they were listed, and he also has several secret wallets.
He sells them as soon as the spike hits and then secretly transfers the profits back to their wallets. Now that is what we call an unethical and scam transaction.
Let us take a look at a specific collection bought by Nate from a dust collection at the rate of 0.25 Eth. Just 20 minutes later, he flipped it for an amount of 1.25eth. This was around the time when Dailydust was one of the most popular and featured collections in the Open Sea market. He did this to several collections, and by the time he was marked out, he had already made a profit of 19eth, which is something around 67000 dollars.
It might seem like a lot of money to you but was it really worth losing out on a solid equity package and a secure job that secured millions of dollars?
What Happened Next?
Right after this incident, Opensea revealed that they were going to do a thorough check of similar happenings and also there would be a new set of guidelines for Opensea team members.
They would be prohibited from using all sorts of confidential information to buy or sell any NFTs. This incident is an eye-opener to how a small loophole in the system can call for even more significant problems.
Have you ever stopped to think that some other employees might have done the same thing and that too without violating any internal policies? Now we are going to go deeper into the subject of why it is going to be a turning point for the Opensea marketplace and how other upcoming marketplaces are going to have benefited from it.
Working Mechanism Of Opensea Marketplace
Opensea is basically a platform that acts as a seller for NFTs, and it also has a register that traces all the NFTs available on Ethereum. You can search the NFTs on those wallets even if they are not up for sale. Also, they can take down the collectibles and put up whatever they want but do not worry! They cannot take away what you already own.
But they do have the power in their hands so that the collection can be marginalized. For example, they took down the Cryptophunks NFT because of the request from Larva Labs.
The Problem With Opensea Smart Contacts
There are some NFTs with formal contracts with the Opensea storefront, and that is what you can get when you do the minting with the help of the Opensea platform itself. You can create your own contract, and most of the famous NFT creators go through this route, more so because it is an easy option to host your collection.
There are several limitations when you talk about the Opensea smart contract:
- Once you are through the contract, it will be difficult for you to add utilities.
- You cannot create a DAO.
- There will be a weak provenance.
- There will be a lack of royalty payment that can happen automatically otherwise. (The royalty is manually transferred so that they can revoke the royalty later on.
Brief Overview
Despite all the flaws of Opensea, it is still a good platform that has had a positive impact on the entire NFT marketplace. It has made buying and selling of NFTs much more accessible, and it is easy to track the price of different floor collections.
In August, the gross NFT sales accounted for over three billion dollars. The company had an actual revenue of 200 million dollars which is indeed a considerable profit. This shows the dominance that Opensea has over other marketplaces in the entire NFT dimension.
The World Of Immense Competition
Today we live in a highly competitive world in which NFT no longer belongs to the experimental segment of the Cryptos. This is a multi-billion dollar market, and competition is inevitable. Therefore now is the time of addressing the concerns of Opensea so that the flaws do not cause it to fall back.
Shoyu
This is an upcoming platform that has been able to make its mark, and it has been created by some of the core developers of Sushi Swap. It is a decentralized exchange that came out of uni swap and now has a value of 4 billion dollars. Shoyu is now creating a new type of marketplace that is charging a 2.5% fee on all sales and is quite similar to the Opensea marketplace.
But the difference is, the fee is going to the token holder and not some centralized team. The system will be fully open-source with the audited contract so that there is utmost transparency.
While Shoyu is keenly anticipated, SUSHI holders will gain from the soon-to-be-launched NFT marketplace.
To begin, all SUSHI token holders who stake their tokens on the protocol to obtain xSUSHI will be entitled to receive 2.5 percent of all NFT trades on Shoyu.
Shoyu also takes care of the Ethereum blockchain’s exorbitant transaction fees by allowing artists to sell their NFTs on Polygon. Peck Shield, Mixbytes, and Tokyo have all agreed to audit all Shoyu intelligent contracts. Shoyu promises to meet the needs of both artists and collectors by providing an immersive gallery mode for NFTs, display links, a search function, a conversation feature, NFT analytics, NFT tagging, and more.
All About Money Lego
Now we have to look at d5, which is where the Shoyu creators came from, and it’s also called money legos. This means because of the open-source system in d5; you can borrow new components from the older ones to create something new and innovative. So most people can start something new without starting from scratch.
Downside Of Shoyu
Now the SEC is going through Uniswap for being a decentralized exchange, and there is a high chance that any loophole in the system might lead to its downfall. Since Sushi was a fork of the uni swap, it is also under the risk zone. If the SEC comes out with new regulations, Sushi can have a restricted working mode.
