The giant NFT marketplace OpenSea is laying off around 20 percent of its employees

OpenSea co-founder and CEO Devin Finzer revealed this afternoon that the NFT marketplace is laying off around 20 percent of its employees. Finzer did not indicate how many people represented. ONE Forbes article in January that celebrated Finzer and his co-founder Alex Atallah’s net worth of $ 2.2 billion (each) said the company employed more than 70 people, but an OpenSea spokesman says The Verge that 230 people will remain in the company.

When we profiled OpenSea in February, the company had just received another $ 300 million in financing with a value of $ 13.3 billion and was the dominant player in the sale of tokens, earning 2.5 percent commission on trades.

Nevertheless, a sustained fall in activity and prices has led to headlines about how NFT sales are flatlining or have fallen off the cliff, while setbacks to the whole concept have followed many companies that took them into use or indicated that they could. Reddit recently launched an NFT Collectible Avatars feature without openly referring to the term, and just today a Sony marketing manager had to dismiss players’ concerns that a new digital collectibles feature would bring blockchain and NFTs to their PS5s.

It is the latest in a number of Web3 companies that have expanded rapidly over the last couple of years as crypto prices have increased, and which are now reducing the number of employees. Finzer said they were able to notify affected employees directly in person before announcing the layoffs, providing “generous” severance pay, health care for the rest of the year, job placement assistance and accelerated earnings. In its note, Finzer says that these changes will give the company as many as five years’ runway if this “crypto winter” continues.

Coinbase, a cryptocurrency exchange that launched an NFT marketplace earlier this year, released 1,100 people last month, and GameStop just opened its NFT store last week, days after announcing a round of layoffs.

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

• One mistake allowed attackers to snatch expensive goods from the owners for significantly less than the listed prices.
• A phishing attack stole NFTs that (at the time) were worth as much as $ 1.7 million in February.
• Former product manager Nate Chastain, who was released last fall for abusing his access to buy NFTs just before they were featured on OpenSea’s main page (and is likely to suddenly increase in value as a result), has now been arrested for insider trading.

• In late June, an employee of the email delivery provider stole the email addresses of OpenSea users, which increased their risk of being targeted by phishing attempts.

Meanwhile, while the whole token of non-fungible tokens is their ability to certify ownership of digital objects and decentralization that does not rely on a single source of verification, OpenSea has had to work to address “authenticity.” It removes tokens for works with content that their creators do not have the rights to sell or that simply mimics other NFTs such as the Bored Ape Yacht Club.

It has also begun launching a new SeaPort protocol aimed at significantly reducing the troublesome gas charges that can increase during periods of high demand, and has recently redesigned the profile pages.