The recent implosion of the great FTX is an opportunity for the industry to refocus on trust, according to OpenSea CEO Devin Finzer. More than 1 million individuals have been affected by the collapse of FTX and BlockFi and a few other parties are also falling due to the problems with the exchange platform.
A tragic moment
Finzer calls the implosion of FTX a tragic moment. “We are still feeling the collateral damage in the industry. There is no doubt that crypto is taking a step back as a result. However, OpenSea itself had no exposure to FTX or its affiliated Alameda Research. According to Finzer, the collapse of the stock market is ultimately even an opportunity for the industry. An opportunity to rebuild things with a focus on trust.
According to Finzer, this is a time when we need to embrace decentralization again. “I think this is an opportunity for the wider crypto ecosystem and for NFTs in particular to invest in user trust,” said Finzer. The statements by OpenSea’s CEO came after the platform announced that it would maintain so-called ‘royalty fees’ on the platform.
Royalty fees ensure that the developer of an NFT also receives a small percentage when selling on the second-hand market. This makes it possible for the artist in question to continue to earn from his work. Other marketplaces do not contribute to the royalties.
Why does OpenSea continue to pay royalties?
The explanation for OpenSea’s choice to continue paying royalties is again in the corner of trust. According to Finzer, it is important to keep the trust of the artists. That is only possible if you don’t just take these kinds of rights away from them. For that reason, OpenSea ultimately decided to keep the royalties.
Decentralization also plays a role in OpenSea’s decision. If you put an NFT on the OpenSea marketplace, the marketplace will not manage it. In principle, the assets remain in the hands of the owners.
For that reason, it is also more difficult to extract the royalties, because they are simply ingrained in the smart contract. In that case, the royalties also simply transfer to the artist in a transaction, which OpenSea cannot do much about in that regard.