A Conversation with OpenSea Co-Founder & CEO, Devin Finzer on the Extraordinary Potential of NFTs.

A Conversation with OpenSea Co-Founder & CEO, Devin Finzer on the Extraordinary Potential of NFTs.

One of the first non-fungible tokens (NFT) was minted in 2014 by the artist Kevin McCoy. The artwork, Quantum, sold for $1.47m in June 2021. By the end of that very same year, more than $41billion had been spent on NFTs, taking these artworks and collectibles from being a sub-billion-dollar market to a multi-decabillion industry, in under a year. To put this in perspective, the global art market is worth $65billion.

In 2017 the world witnessed the birth of CryptoKitties. For the first time, the world experienced a decentralized application built on blockchains but targeted towards a mainstream audience. While CryptoKitties felt like a toy to many, it represented a dramatic shift in how we interact with items in the digital world. While previous digital items lived on company servers, blockchain-native items lived on shared, public blockchains owned by no single party. They could be viewed anywhere, exchanged openly, and truly owned in a way that was never possible in the digital world.

Fascinated by the movement that was forming, Devin Finzer and Alex Atallah joined early adopter communities in Discord and started talking to users. With the OpenSea beta launch in December 2017, the first open marketplace for any non-fungible token on the Ethereum blockchain was born.

Today, OpenSea is the largest marketplace for NFTs and user-owned digital items. The platform’s more than 600,000 users collectively have 2 million collections containing over 80 million NFTs. The platform is now valued at over $13.3billion and has attracted many of the world’s most prominent investors including: Mark Cuban, Tim Ferris, Ben Silberman, Alexis Ohanian, Balaji Srinivasan, Naval Ravikant, Justin Kan and Ashton Kutcher alongside funds including Andreesen Horowitz, Y Combinator and Founders Fund.

In this interview, I speak to Devin Finzer, Co-Founder & CEO of OpenSea. We talk about the potential of blockchain, crypto technologies and NFTs. We discuss the NFT revolution, the potential use cases of NFTs, how they’re transforming the creator economy and creating opportunities for collectors and makers. We also talk about the technology behind NFTs, and Devin’s life as one of the most successful technology entrepreneurs in the world.

Q: When did you first realise the potential of blockchain and crypto technologies? 

[Devin Finzer]: In 2017, I had sold my previous start-up, Alex (my co-founder) was winding down his start-up and everyone was talking about crypto. Naturally, we investigated it, and for me, a big turning point was reading the Ethereum white paper. It opened my mind to how crypto was moving from financially oriented technologies like Bitcoin, to more powerful platforms which have multiple exciting use cases. Most blockchains and technologies in that space were infrastructural at the time, and CryptoKitties was one of the first consumer-oriented, mainstream applications. You have these CryptoKitties on the blockchain, you own them in this new way, and could move them around between different applications that weren’t necessarily connected to CryptoKitties. You could build a whole new experience – for example – where you raced your CryptoKitties. It was from playing with these CryptoKitties – downloading wallets, using cryptocurrencies, transacting, that we built this experience where you could buy and sell your CryptoKitties on a cohesive marketplace. Those are a few of the magic moments on the journey.

Q: How much of a revolution are we seeing right now?

[Devin Finzer]: Web3 and blockchain are as big of a fundamental shift as the internet was in 1999-2000. To be clear, we’ve had the growth of on-demand technologies and movements such as ridesharing, we’ve had the growth of streaming disrupting entertainment, but crypto is a fundamental shift.

Talent is streaming into the space, developers are extremely excited and the giant Web2 companies such as Facebook, Amazon, Google, Instagram, and Twitter are adopting crypto technologies into their core business. Our digital experiences and services have always been very centrally controlled, you may have had APIs, but they were – in essence – closed systems. Crypto and NFTs create open systems with distributed ownership that can be used to build a practically infinite number of applications. We’re at day zero of a gigantic wave.

Q: What are the potential use cases for NFTs? 

[Devin Finzer]: NFTs are a very generic technology in many ways – they can be applied to almost anything. There are obviously the digital use cases we see in art, gaming, event ticketing… but you could also imagine physical objects being represented as NFTs. People are already experimenting with it in real estate. Entire economies are being built with blockchain as the fundamental.

We’re really excited about the next steps beyond digital art and collectibles. We’re really excited about gaming. People are spending lots of time inside massive multiplayer online games – games are becoming the new social networks, and NFTs allow game economies to be open. Instead of everything existing in – say – Fortnite’s ecosystem, NFTs allow interoperability between games. You could take a sword from one game and move it to another. In the events industry, for example, currently you tend to have centrally controlled marketplaces that don’t function transparently. You can imagine having event tickets operating as these collectible, persistent, immutable objects you can carry between markets, with different benefits… potentially even being redeemable against real-world assets. We’re also surprised… we didn’t necessarily foresee the Bored Ape Yacht Club becoming a huge thing, but it turned out that communities come together in unique and interesting ways.

It’s a beautiful, fun experiment.

Q: How are NFTs transforming the creator economy?

[Devin Finzer]: Existing platforms don’t necessarily have the best business models for creators, nor do they enable creators to interact directly with their fans in a way that value can pass directly to the people who are producing the creative work. Take Twitter or Instagram – people publish all their content for free, and most of the value that these creators produce is captured by the platforms by their advertising networks. It’s a deeply inefficient way for creators to monetise. Nobody likes to see ads on their social network, but it’s the only way that the web could work without a native way for payments that allow the transfer of value between one person and another. For the creator economy, NFTs represent a way for creators and producers of content to directly engage with the people who support them. Artists create a limited edition NFT, and people who want to support that artist can contribute and purchase it. That item could increase in value over time if the artist becomes successful – it’s exciting. It’s a completely different model… a way for artists and creators to monetise much more effectively than incumbent platforms.

At OpenSea, we’ve had the chance to work with several amazing artists, musicians, and athletes… everyone from Rob Gronkowski to Sean Mendez and The Weeknd!

Q: Why does interoperability matter to NFTs?

[Devin Finzer]: Liquidity and open marketplaces are two of the first really important applications and infrastructure pieces for NFTs. When CryptoKitties launched, it was interesting because they were built with their own marketplace – they had a game. One could argue that you could have built CryptoKitties without using a blockchain – but it was nice to be able to pay in Ethereum, and now there’s a whole ecosystem around it. Today, you have several NFT marketplaces, and new ways to display your NFT – for example, Twitter launched the ability to natively set your NFT as your profile picture! This kind of interoperability and cross-platform support, as well as liquidity, is powerful.

Q: How are NFTs creating sustainable income streams for creators?

[Devin Finzer]: You see everyone from upcoming artists to global celebrities engaged in NFTs. We’ve heard stories from folks who have paid off their student debt by becoming digital artists and selling NFTs. Pre-NFT, there weren’t many avenues for you to monetise if you were a digital artist. You could do contract work (which typically didn’t’ pay well), or you could maybe build your reputation on a social network (which is incredibly hard to monetise!). If you think about the jobs of the future – there will be people who will be making money as VR sculptors, virtual land real estate agents… People are already creating those jobs now! Maybe for some it will be full-time, maybe for some part-time, but the important thing is that people can participate in this economy in new ways.

Q: What are the big technological problems you have solved, and have yet to solve, with NFTs? 

[Devin Finzer]: There are so many projects in this space that have contributed to the core infrastructure. To deploy NFTs, you need to develop smart contracts for blockchain. That process used to be one of the most painful and difficult things! You’d have to go and read some esoteric blog post that barely told you how to do it. That technology has matured over time and enables the deployment to happen almost seamlessly. For us, one of the main things we’ve focussed on is NFT exploration and making it easy for consumers, users, creators, artists and developers. For a long time, OpenSea was the only place you could see all the NFTs you owned alongside browsing, searching, and discovering more. Building that kind of data layer was the equivalent of crawling the entire space of NFTs! Now we support multiple blockchains, too. The ecosystem has also benefited from companies who have contributed a huge amount – wallet technologies, browsers, browser extensions…

In terms of where technology needs to improve…

Most NFT activity today happens on Ethereum, but we believe the future of web3 is multi-chain, and reliance on Ethereum is not scalable to accommodate all the innovation and activity happening in NFTs. There’s a theory that 2.0 is coming, which is supposed to solve some of these problems, but currently, to purchase an NFT, you’ll pay high gas fees just to process the transaction. Creating a more scalable underlying blockchain infrastructure that can support higher throughput transactions is critical. On a layer-2 solution like Polygon, or a new layer like Solana, you can process more transactions, at a higher throughput with lower cost. Having to pay high gas fees to purchase an NFT makes $0.50-$1 NFTs less exciting but is less of an issue for $5,000 NFTs. We need to expand the NFT economy to allow lower-cost items – this is especially important for games, where you want people to be able to play for free and buy items to level-up.

Underlying blockchains need scalability, improved security, and improved wallet infrastructure. There are a lot of problems to solve, and our industry is working on all of these things in parallel.

Q: What are some of your learnings about leading a fast-scaling start-up?

[Devin Finzer]: The whole NFT industry is moving incredibly quickly. What happens in a month in the crypto-world, may take a couple of years in other industries.

In the world of crypto, there are significant new announcements every week, and that pace of acceleration is amplifying as NFTs are becoming mainstream; they’re even being talked about on SNL. Focus is critical when you are building a business. You must focus on doing a couple of things well and building from there. For us, that was focusing on being the most trusted… the most user-friendly… the most inclusive… the widest coverage… I think core to our success has been that ability to focus on our value proposition as opposed to losing focus building other things. We wanted to make sure we built a quality core product.

Q: What does legacy mean to you?

[Devin Finzer]: I’d love to create an organisation that allows people to grow and have meaningful careers in a brand new industry. I’m trying to learn as much as I can as a CEO to get better at coaching, and to get better at balancing strong empathy with strong accountability. I want to create a culture where people can do extremely impactful work, have fun, and learn throughout their career. I’ve grown a lot from when I first started and have a long way to go.

When I think about the broader impact that OpenSea could have, there’s a world where users have much more control over their own data and identity. Where platforms are aligned with the incentives of the user. Building that world, and building an open economy is exciting and will benefit people in ways we can’t even anticipate today. That’s what we’re doing, and it’s extremely exciting.

Thought Economics

About the Author

Vikas Shah MBE DL is an entrepreneur, investor & philanthropist. He is CEO of Swiscot Group alongside being a venture-investor in a number of businesses internationally. He is a Non-Executive Board Member of the UK Government’s Department for Business, Energy & Industrial Strategy and a Non-Executive Director of the Solicitors Regulation Authority. Vikas was awarded an MBE for Services to Business and the Economy in Her Majesty the Queen’s 2018 New Year’s Honours List and in 2021 became a Deputy Lieutenant of the Greater Manchester Lieutenancy. He is an Honorary Professor of Business at The Alliance Business School, University of Manchester and Visiting Professors at the MIT Sloan Lisbon MBA.