Is OpenSea in trouble? (They just laid off 20% of their workforce)
Q: Who're the first to be ejected from the classroom?
A: The naughty kids.
Why? Because they pose the largest potential risk to disrupting the class.
In this current crypto market downturn, the 'naughty kids' that pose the largest potential risk to investors portfolio's are:
Lending platforms - many of which have overextended themselves and are struggling to stay afloat.
NFTs (and the marketplaces that sell them).
NFTs no doubt have an exciting place in the future of Web3 - but at the moment, their highly speculative nature and early stage of adoption, aren't doing them any favors.
Now, unfortunately, we're starting to see the results of this reality...
Yesterday, OpenSea announced that it would be laying off 20% of its workforce, in preparation for a prolonged market downturn.
OpenSea's CEO, David Finzer, said on Twitter:
"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)"
Here's an overview of what's happening / why:
OpenSea have a strong balance sheet (i.e. cash reserve), but want to preserve it...so it's a safety move, not a panic move. We'll count that as a silver lining.
They did it right (i.e. no mass firing over Zoom). Employees were notified one by one, before it was publicly announced.
Laid off employees will receive extended health care and accelerated share vesting - which means they'll still have a financial stake in the company.
...so, it looks as though OpenSea did a hard thing, as best they could.
Still, from a market perspective - it's not great.
But let's balance the scales and zoom out:
Adoption may slow over the next year or so, but for those in the space who understand the potential applications of NFT technology (beyond certifying digital art) - now is a time to start building.
Our guess is: chatter in the space will ease, the volume will be turned down - but progress will continue.
