coincodex.com
Key highlights:
- NFT marketplace OpenSea is laying off 20% of its employees, according to a statement from CEO Devin Finzer
- According to Finzer, the company needs to be prepared for a prolonged downturn in the cryptocurrency markets
- The cryptocurrency market crash has slowed down NFT trading volumes
OpenSea is laying off 20% of its workforce
NFT marketplace OpenSea is laying off around 20% of its workforce, according to a statement from the company’s CEO Devin Finzer. OpenSea had around 275 employees before the layoffs, and the count has been reduced to 230.
According to Finzer, OpenSea will assist the employees who will no longer be working at the company with severance, healthcare coverage and accelerated equity vesting.
Finzer says that the decision to lay off 20% of the company’s employees comes amid “an unprecedented combination of crypto winter and broad macroeconomic instability”. He continued by saying that the company needs to be ready for a scenario where the crypto markets go into a prolonged downturn.
“The changes we’re making today put us in a position to maintain multiple years of runway under various crypto winter scenarios (5 years at the current volume), and give us high confidence that we will only have to go through this process once.”
On a more optimistic note, Finzer said he expects the “crypto winter” will result in “an explosion of innovation and utility across NFTs”.
OpenSea’s business model is to charge a 2.5% transaction fee on the NFTs trades it facilitates. However, the trading volume has decreased substantially in 2022. According to The Block’s data dashboard, OpenSea handled $4.97 billion in trading volume in January, but only $696 million in June. We’re currently midway through July, and the platform has facilitated $127 million worth of NFT trades so far.
Venture capitalists have poured large amounts of money into OpenSea as as NFTs began to make their way into the mainstream. The company hit a valuation of $13.3 billion after a $300 million Series C round in January this year.
While OpenSea remains the dominant NFT marketplace, it’s likely that it won’t only have to contend just with cryptocurrency market conditions, but competitors as well. Magic Eden, a Solana-based NFT marketplace, recently raised $130 million in a funding round that valued the company at $1.6 billion.