Giant NFT marketplace OpenSea lays off about 20 percent of its staff

OpenSea co-founder and CEO Devin Finzer unveiled this afternoon that the NFT marketplace is laying off about 20 percent of its employees. Finzer did not specify how many people there were. A forbes Article in January celebrating the net worth of Finzer and his co-founder Alex Atallah ($2.2 billion each) said the company has more than 70 employees, but a spokesman for OpenSea tells The edge that 230 employees remain in the company.

When we profiled OpenSea in February, the company had just received an additional $300 million in funding with a valuation of $13.3 billion and was the dominant player in the sale of the tokens, earning a commission of 2, 5 percent on trade.

Still, a sustained decline in activity and price has prompted headlines about how NFT sales are flattening out or falling off the cliff, while many companies that adopted or proposed them have pursued a backlash to the whole concept. Recently, Reddit launched an NFT Collectible Avatars feature without overtly mentioning the term, and just today a Sony marketing exec had to dismiss concerns from gamers that a new digital collectibles feature would bring the blockchain and NFTs to its PS5.

It’s the latest in a line of Web3 companies that have expanded rapidly in recent years as crypto prices have soared and are now shedding staff. Finzer said the company was able to personally notify affected employees directly before announcing the layoffs, “generous” severance pay, health care for the remainder of the year, job placement assistance and expedited transfers of stock. In his note, Finzer says these changes will give the company up to five years of runway if this “crypto winter” lasts.

Coinbase, a crypto exchange that launched an NFT marketplace earlier this year, laid off 1,100 employees last month, and GameStop opened its NFT store just last week, days after a round of layoffs was announced.

While the entry of new competitors has made things more difficult, as well as increased use of alternative storefronts such as LooksRare, OpenSea has had a number of issues of late, beyond the falling prices of crypto and many NFTs:

  • A bug allowed attackers to snatch high-priced items from their owners for significantly less than their list prices.
  • In February, a phishing attack stole NFTs valued at up to $1.7 million (at the time).
  • Former product chief Nate Chastain, who was fired last fall for abusing his access to buy NFTs just before they were featured on OpenSea’s main page (and likely to suddenly increase in value as a result), has now been arrested for insider trading.
  • In late June, an employee at his email delivery provider stole OpenSea users’ email addresses, increasing their risk of becoming victims of phishing attempts.

Although the full gamut of non-fungible tokens is their ability to certify ownership of digital items and their decentralization of not relying on a single source for verification, OpenSea had to work to address “authenticity”. It removes tokens for works with content their creators have no rights to sell or that simply mimic other NFTs like Bored Ape Yacht Club.

It’s also begun rolling out a new SeaPort protocol designed to significantly reduce pesky gas fees that can skyrocket during periods of high demand, and it recently revamped its profile pages. Giant NFT marketplace OpenSea lays off about 20 percent of its staff

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