NFT marketplace head OpenSea is trying to distance his company’s products from cryptocurrency.
In an interview with the Financial Times (FT) published on Thursday (29 December), Devin Finzer, chief executive of OpenSea, cautioned regulators in their approach to his industry.
“It’s really important for regulators and government officials to understand that this is not the same as the broader crypto industry, where there is a lot of focus on financial use cases,” Finzer said.
He told the FT that the value of NFTs should be determined by how people interact with them: using tokens to play games, access special events, or display digital artwork.
Finzer also acknowledged that the crypto industry had suffered “some setbacks recently,” namely the FTX crash last month, which led to an overall drop in digital assets.
But even before FTX imploded, a broader slump in the cryptocurrency 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 “unprecedented” combination of the crypto downturn and broader general instability. As such, he said that OpenSea had to start preparing for “the possibility of a prolonged downturn.”
For the NFT sector as a whole, the drop has been stark, PYMNTS wrote earlier this week, with monthly spend on digital offerings falling 87% to $442 million, 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 believes that NFTs still have a great future, arguing that consumers will continue to spend money on digital images that they can display at home or in virtual spaces.
“It is not necessarily the case that NFTs will always be bought and sold denominated in cryptocurrencies as they are today,” he said. “There are a variety of reasons why that makes sense in today’s ecosystem, but as we become broader and more accessible, there’s no reason NFTs can’t at least be denominated in US dollars.”
As PYMNTS pointed out earlier this week, NFTs could essentially be remembered as a fad unless they can find a way to capture “real, diverse, and recurring” revenue streams.
“It turns out that scarcity value is not enough to sustain a real business,” we wrote. “Non-fungible assets (the NF in the NFT) are unique, yes, and exist as holdings that cannot be replicated.”
However, there are numerous examples of NFT-linked art, cartoons or tweets beginning to be seen virtually all over the web, diminishing the notion of exclusivity.