The head of NFT marketplace OpenSea is trying to distance his company’s products from cryptocurrencies.
In an interview with the Financial Times (FT) published Thursday (Dec. 29), Devin Finzer, OpenSea’s chief executive, cautioned regulators in their approach to his industry.
“It is really important that regulators and government officials understand that this is not the same as the broader crypto industry where there is a lot of focus around financial use cases,” Finzer said.
He told the FT the value of NFTs should be determined by how people engage with them: using tokens to play games, access special events, or display digital artwork.
Finzer also acknowledged the crypto industry had suffered “some setbacks recently,” namely the collapse of FTX last month, leading to an overall downturn in the drop of digital assets.
But even before FTX imploded, a broader decline in the crypto market — the so-called “crypto winter” led OpenSea to cut 20% of its staff in July.
Finzer said “macroeconomic instability” was a contributing factor, due to an an “unprecedented” combination of the crypto downturn and wider, general instability. As such, he said OpenSea had to begin readying for “the possibility of a prolonged downturn.”
For the NFT sector as a whole, the decline has been stark, PYMNTS wrote earlier this week, with monthly spending on digital offerings falling by 87% to $442 million, as measured in November. At the same time, the volume of “minted” NFTs has dropped by 60% and the volume of active buyers and sellers is a third of the levels seen at the beginning of the year.
Speaking to the FT this week, Finzler thinks NFTs still have a strong future, arguing consumers will keep spending money on digital images they can show off at home or in virtual spaces.
“It is not necessarily the case that NFTs will always be bought and sold denominated in cryptocurrency as they are today,” he said. “There are a variety of reasons why that makes sense in the current ecosystem, but as we get broader and more accessible, there is no reason that NFTs could not at least be denominated in U.S. dollars.”
As PYMNTS noted earlier this week, NFTs could be remembered as essentially a fad unless they can find a way to capture “real, diverse, and recurring” sources of revenue.
“It turns out that scarcity value is not enough to underpin a real business,” we wrote. “Non-fungible assets (the NF in the NFT) are one-of-a-kind, yes, and exist as holdings that cannot be replicated.”
However, there are numerous examples of the art, or the cartoons, or the tweets tied to an NFT begin viewable pretty much all over the web, thus diminishing the notion of exclusivity.
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