Ever since NFTs burst out, several NFT marketplaces have popped up all around the internet. One of the oldest and most popular of these NFT marketplaces at the moment is Opensea.
However, as with any trading platform, the question arises around how does Opensea make money to keep the platform operational? In this article, we’ll be taking a look at how Opensea’s business model and how it makes money.
Also read: Polygon vs Ethereum
How Opensea makes its money?
Similar to most other marketplaces, Opensea makes its money by collecting a 2.5% fee on every transaction on the platform. Since NFTs can be bought, sold or traded more than once, Opensea has a considerable incentive to enhance their marketplace for more trading value, which means more revenue for them.
Of course, this takes a cut out of the seller, and this isn’t the only charge involved with selling an NFT either. Buyers and sellers also have to pay either one-time or recurring gas fees.
Gas fees are transaction fees paid to miners on Ethereum that process your transactions. One-time fees involve account registration and token/contract approval fees that you give when listing an NFT for sale.
Recurring gas fees on Ethereum have to be paid on the following actions.
- Accepting an offer.
- Transferring an NFT to someone.
- Buying an NFT.
- Cancelling a listed NFT.
- Cancelling a bid.
- Freezing metadata.
- Bridging or withdrawing ETH to and from Polygon.
- Converting WETH back to ETH and vice-versa.
It’s essential to keep in mind that Opensea doesn’t control and doesn’t profit from any gas fees paid on the platform. It also doesn’t receive any of it and can’t refund them. Gas prices are also determined by activity on the Ethereum blockchain and keep fluctuating from time to time.
Also read: How to get verified on Opensea?