A Beginner’s Guide to OpenSea
Non-fungible tokens or NFTs are surging in popularity and redefining the concept of digital ownership for many. The internet we use today is a copy machine, anything can easily be reproduced and distributed. Most of the time, original creators are not given credit for the value they’ve created. That's where the NFTs come in - they make it possible to prove ownership, scarcity, and uniqueness of digital items.
NFTs are revolutionizing traditional industries such as art, media, and gaming. In 2021 alone, an estimate of $23 billion flowed into NFTs, a huge increase from just under $100 million of trading volume in 2020. The meteoric rise of NFTs is causing an influx of artists entering the space, with new and innovative communities forming around collections. Digital art, music, essays, photos, and virtual real estate can now be bought and sold through NFT marketplaces.
As the digital economy continues to grow and become mainstream, NFT marketplaces need to meet demand from collectors and creators. There are a number of marketplaces for buying, selling, and creating your own NFTs. Some popular marketplaces include OpenSea, Rarible, Zora, Foundation, and SuperRare.
In this guide, we will help you navigate the largest NFT marketplace, OpenSea.
What Is OpenSea?
OpenSea launched in 2017 as the first NFT marketplace established on the Ethereum blockchain. Today, OpenSea is the largest general marketplace for buying and selling NFTs.
OpenSea offers support across four blockchains - Ethereum, Polygon, Klatyn, and Solana. You can think of OpenSea like eBay or Amazon for digital goods - it is a peer-to-peer marketplace that connects sellers (creators and artists) to buyers (potential NFT collectors). Online marketplaces usually take a fee for facilitating transactions, and in OpenSea’s case that’s a 2.5% fee for every transaction.
OpenSea has a wide variety of categories including art, music, photography, trading cards, collectibles, and more. It is accessible to all, but as with most Web3 applications, you will need a digital wallet to create an account and some crypto to purchase your first NFT. Most NFTs on OpenSea are sold in ETH, USDC, and DAI but they support about 150 other cryptocurrencies.
Create an Account on OpenSea
Creating an OpenSea account only takes a few clicks. Watch the video below for a walkthrough on how to create an OpenSea account.
Discovering NFT Projects
OpenSea offers a wide selection of NFTs to choose from. When you visit the OpenSea home page, you will see featured collections and trending projects. OpenSea’s robust filtering system makes it easy to explore collections. You can sort NFTs by category, ranking, and popularity over a certain period of time.
Tip: Most artists and creators announce upcoming NFT collections on Twitter.
Looking for Something?
If you already know what you’re looking for, you can type the name of the artist or collection in the search bar. OpenSea is a permissionless marketplace, meaning anyone with an account can create an NFT.
Unfortunately, there are some bad actors out there and you might come across fake collections. This is common with newly released collections that are gaining traction and have not yet been verified. If you know or suspect a fake collection, report the collection and notify the OpenSea team. Although OpenSea actively removes fake accounts and collections, there are a few ways to check whether an NFT collection is real or fake.
1. Look out for a blue check mark
A blue check mark means that an account or collection has been verified by the OpenSea team. Well-known accounts or collections that have exceeded a certain amount in trading volume have a blue check mark. Smaller accounts or newly listed collections won’t have a blue check mark just yet. You can cross-check and visit the artist's Twitter page or website to confirm that what you’re buying is real.
As an example, when you search for Robotos and hover your mouse over the blue check, it will say “verified collection.”
2. View the statistics
Under the name of the collection, you will see some statistics which include the number of items in the collection, number of owners, floor price, and volume traded. These numbers are great indicators for how much activity a collection has had.
3. Recent activity
From the collection’s page, you can hover over to the “Activity” section and view recent sales, new listings, bids, and transfers.
Monitoring Collections
To curate a list of collections and track their activity in real time, you can create your own watchlist. A watchlist can help you monitor specific collections or track the performance of the NFTs you own.
Watchlists on OpenSea display a number of statistics about a collection. You’ll find the lowest price you can purchase an NFT, volume, number of owners, and number of items in a collection.
To add a collection to your watchlist, type the name of the collection and select the “add to watchlist” button.
To view your watchlist, go to your profile icon on the upper right corner of your screen and select “watchlist”.
Buying an NFT on OpenSea
Once you’ve found an NFT you want to purchase, there are a few things to keep in mind. First, make sure that you have extra funds in your wallet for gas fees. Gas fees are transaction fees on the Ethereum network paid to miners to keep the network secure. Each time you interact with the blockchain, you will have to pay for gas. The fee varies depending on how busy the network is, ranging anywhere from $20-$200.
Second, the buying process on OpenSea will vary depending on how the NFT was listed. You can either buy the item at the price listed by the seller, make an offer by naming your price, or place a bid on an item that is up for auction.
Most items you will come across have a fixed price - this is similar to what you see when you go to stores or shop online. Buying an NFT with a fixed price ensures you will own it immediately after paying.
On the other hand, making an offer on an item allows you to name your price. You can decide how long your offer is valid by choosing the date and time your offer expires. You won’t receive or pay for the NFT until the seller accepts your offer.
If you come across an NFT that only gives you the option to make an offer, that means the NFT is not up for sale. However, you can still make an offer. Making an offer on an item that is not for sale notifies the seller of your interest in purchasing their NFT. The seller can either accept your offer, counter it, or let it expire.
Auctions are another type of listing you will come across on OpenSea. There are two types of auctions - English and Dutch.
For English auctions, a seller lists their NFT for a minimum price and interested buyers place bids. After a certain duration, the seller accepts the highest bid. This is similar to how auctions work on eBay. When participating in an English auction, you won’t pay for the NFT unless you are the highest bidder at the end of the auction.
A Dutch auction on the other hand starts with a high price that declines over time. The price will keep declining until someone purchases the NFT or until it reaches its lowest listing price. Purchasing through a Dutch auction allows you to immediately own the NFT.
Where is the NFT stored?
After you’ve successfully purchased an NFT, you will be able to view it in your OpenSea account and digital wallet. Your digital wallet is secured by a 12-24 word seed phrase, which is why it is essential to keep your seed phrase offline and protect it at all costs.
What can I do with my NFT?
NFTs can be used to express yourself and your identity online. Today, people use NFTs as their profile picture on Twitter, Discord, and other social platforms. With Twitter Blue’s NFT profile picture feature, you can connect your digital wallet and select an NFT that you own to use as your avatar.
If you have a growing collection, you can curate a virtual gallery on apps such as Spatial, Gallery, and Showtime. There are also frames made specifically for NFTs, if you would like to appreciate the art in real life. Examples include Infinite Objects and Atomic Form.
The number of use cases for NFTs continues to grow. Some NFTs give you access to digital and real-life events, private communities, early access to content from creators, lifetime access to educational courses, and much more.
Depending on the copyright of the NFT you own, you might be able to use your NFT commercially. As an example, the NFT project, Nouns, has a CC0, which is a type of Creative Commons License that allows anyone to build upon the project. People are free to make and sell merchandise, create derivative NFT projects, movies, TV shows, and music to name a few.
Selling an NFT on OpenSea
When you no longer want to hold an NFT that you own, you can sell it anytime. To sell an NFT you own, visit your profile and select the NFT you want to list for sale.
There are two options for listing your NFT. You can sell your NFT at a fixed price or through a timed auction. Anyone who purchases your NFT at a fixed price will get the NFT immediately after paying. If you set a timed auction, you can sell with a declining price (Dutch auction) or sell to the highest bidder at the end of your auction.
To complete your sale, your wallet will pop up and you will be asked to sign a transaction. Signing a transaction is done to verify that you are the owner of your wallet and that you are authorizing the sale of your NFT.
What’s next?
Whether you’re skeptical or optimistic about NFTs, they have changed the way the internet works. We’re still in the early days, but with digital marketplaces like OpenSea, anyone in the world can buy, sell, and create digital goods. This new technology promises to create economic and creative freedom for artists, creators, and collectors everywhere.