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NFT trading volumes have taken a hit across the board owing to crypto winter, as OpenSea plans to downsize workforce by 20%.
According to data from The Block Research, non-fungible token (NFT) trading volumes declined 74% from May to June. In May of this year, the NFT trading volume across marketplaces hit $4 billion. However, the following month, the figure plunged dramatically to a relative low of just $1.04 billion in trading volumes.
The 74% plunge represents the largest decrease in NFT month-to-month trading volumes. This decline is also almost 30% more than the second largest NFT month-over-month fall. Between February and March of this year, NFT trading volumes dropped 48%, the biggest decline until the May-June report.
OpenSea Still Leads Latest NFT Trading Volumes but Looks to Downsize Owing to Crypto Winter
Unsurprisingly, leading NFT marketplace OpenSea dominated market trading volumes for June, with $696 million. This figure is 67% of the total trading volume for that month. However, despite taking the lion’s share of NFT trading volumes, OpenSea is not immune to the broader downturn in crypto assets and NFTs. As a result, the world’s largest NFT marketplace recently announced on July 14th that it was going to downsize its workforce by 20%.
In a message posted to Twitter, OpenSea chief executive officer Devin Finzer explained:
“…the reality is that we have entered an unprecedented combination of crypto winter and broad macroeconomic instability, and we need to prepare the company for the possibility of a prolonged downturn.”
Furthermore, Finzer also moved to provide assurances on OpenSea’s current stance, and how the company is better off for it. As he put it:
“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.”
Finzer also expressed faith in OpenSea’s track record of weathering crypto winter and the preparedness it showed at every turn. Lastly, the company’s CEO said that OpenSea has a robust balance sheet to fall back on due to funds generated in the past. To this, he also added that the leading NFT marketplace had successfully earned its product-market fit reputation as well.
OpenSea Employee Situation
OpenSea did not disclose the exact number of employees facing termination, but planned to treat them “with great care”. This includes generous severance packages as well as robust healthcare coverage into 2023. In addition, the prominent NFT platform also vowed to offer “accelerated equity vesting” to qualified departing workers.
According to a report by The Block, OpenSea revealed that its active employee base currently numbers 230 individuals.
OpenSea Faces Growing Competition for NFT Trading Volumes
Amid the sharp downturn in NFT trading volumes across markets, OpenSea faces rising competition in the space. For instance, Magic Eden, an NFT marketplace for Solana-based NFTs, has slowly made inroads into OpenSea’s market share. This comes about despite OpenSea activating support for Solana in April this year.
At the beginning of 2022, Magic Eden accounted for only 0.1% of the trading volume. However, that number has now reportedly exploded to 10%.