OpenSea earns tens of millions of dollars a month, and its sources also include NFTs that have been removed due to copyright issues.
Original title: “OpenSea, which earns tens of millions of dollars a month, also has “gray” income”
Written: 0x21, Rhythm BlockBeats
On November 2nd, Beijing time, a few days ago, the popular NFT project Doodles published this news in the Discord community:
(Do projects such as DoodleToads or Doodle cats belong to the Doodles series? No.
If they use a name similar to ours, will we complain to OpenSea? Will do.
If we mint these projects, will we suffer losses? Will do.
If projects like DoodleToads are run through our Doodle Bank, are we willing? willing. )
Doodles, which is “famous”, can make such an announcement, which stems from Doodle Toads NFT, another NFT avatar project that has received much attention recently.
The art form of Doodle Toads NFT is similar to Creature Toadz, another project that opened higher and lowered at the end of October. Both are “stitched monsters” based on the current popular NFT project Toadz, combined with another popular NFT project.
The official of Doodle Toads NFT released the first tweet of the project on October 31. In just two days, there were close to 7,500 Twitter followers. The official Discord community was announced in the early morning of November 2, and a whitelist was issued for the first 1500 users who entered the Discord community and registered. The whitelist was sold out within a few minutes. As of the writing date, Doodle Toads NFT has opened up the whitelist of invitational contests, allowing the Discord community to have about 80,000 community members in just one day.
The high popularity of Doodle Toads has triggered discussions in the Doodles community, and also attracted the attention of Doodles officials, so there was the Disocrd announcement at the beginning of the article.
Doodle Toads NFT “Second Kneeling”
Subsequently, Doodle Toads NFT also issued two announcements, claiming to have communicated with the official Doodles team that Doodle Toads NFT has no infringements and will not make any rectifications on the content of the NFT. Another announcement two hours later stated that in order to show respect and goodwill to the Doodles team, Doodle Toads NFT would include 2.5% of the royalty income into the Doodles vault. The official Doodles has not yet responded.
Doodle Toads NFT had a “resolute attitude” from the beginning, and it only took a short period of two hours to “make peace”. There are also two “voices” in the Discord community of Doodle Toads NFT. One is that a second project like Doodle Toads NFT should be supported by the original project; the other is that I don’t understand why Doodle Toads NFT is so fast. Just “kneel”, the creation of the Web3 era should be open to the public, whether OpenSea has the right to remove it. And the core problem of these voices is also the problem that has arisen since the birth of NFT, that is, the right to define the copyright of NFT.
OpenSea’s copyright definition
OpenSea is the world’s largest NFT market. The OpenSea Discord community handles nearly a hundred copyright complaints every day. Among them, the most is about the NFT purchased by users being removed or deceived because they are not original works, and the second is on the basis of originality. The second creation works on the previous page were removed from the shelves due to similarities. Although the delisting of NFT on OpenSea will not really affect the attribution of NFT, it has a huge negative impact on the property of NFT holders.
In mid-August 2021, the SFD (Sad Frogs District) NFT infringement incident caused a lot of noise on social media. Rhythm BlocksBeats previously reported on ” NFT Blind Box Incidents Frequent, Is It Really Safe?” There is a detailed introduction in the article. In the infringement case at the time, OpenSea stated that it followed the legal standards of the DMCA (Digital Millennium Copyright Act promulgated by the United States) and handled infringing NFTs as required. According to the DMCA regulations, US laws allow fair use of intellectual property rights, such as criticism, reporting, academic research, etc. In addition, works that are considered “transformative” because they recreate the original works in a completely different way of creation, usually Not regarded as infringement. Therefore, it is difficult to determine whether many “second creation” works are infringing or not. Then it means that the dominant right to define the copyright of the work returns to the hands of OpenSea. And this time Doodle Toads NFT’s “Kneel at the Speed of Light” is also worried that the work will be removed from the shelves after it is listed on OpenSea because it is uncertain whether there is a possibility of infringement.
While Doodles and Doodle Toads NFT disputed the infringement of their works after they were put on the shelves, they ignored another important question: if the works are infringing, why can they be put on OpenSea?
The “grey area” of OpenSea
The above is OpenSea’s official announcement on user safety and delisting. However, this seemingly compliant and normal notice has actually left OpenSea in a “grey area” in terms of copyright for a long time. Perhaps most users suffer from delisting. The “culprit” of property damage.
First of all, the notice stated: “Once we confirm that the following circumstances are discovered, NFT assets will be removed from our platform.” So this means that OpenSea’s review system before NFT works are put on the shelves is completely loose. This is the so-called “first put on the shelf, then off the shelf.”
Users who are familiar with OpenSea should know that in order to attract more creators to join the OpenSea platform, the steps to create NFTs through the platform’s smart contracts are extremely simple. Usually, you only need to add NFT works, add attributes, descriptions, names, and price and pay for them. The commission required for the contract can be put on the shelf. The entire process takes only a few minutes, and the review of the content of the uploaded work and the review of copyright are almost zero, and the review is often done after the platform accepts the report. This means that once a work is reported off the shelf due to infringement issues, the holder of the NFT must be the ultimate victim. Regarding the issue of the advance review of works, Twitter KOL@NFTmachine used to talk about the OpenSea official on Twitter more than once, but there was no response to the question. In the final analysis, non-response stems from interest issues.
The main revenue of OpenSea comes from the 2.5% platform tax generated by each NFT transaction on the platform. According to DuneAnalytics data, the total transaction volume of OpenSea in October is approximately US$2.6 billion, so the platform revenue is approximately US$65 million. Of course, this part of the revenue also includes platform tax revenue generated before the delisting of the illegal NFT. And this income comes from every victim who was deceived due to ineffective platform review. As for whether the royalties generated by the illegal works should be returned to the victims, OpenSea has never faced an issue directly. It is conceivable that if OpenSea starts the pre-review mode of works upload, it will have a great impact on platform revenue.
In contrast, Rarible, which is also an NFT trading platform, simplifies the process of “on-chain” works and adds early review and certification functions. When uploading works, authors must provide source files to the Rarible platform for creation of works. Process and other documents to obtain the certification label. From the very beginning, buyers can have a basic understanding of copyright issues. OpenSea’s Verified Collection needs to pass the NFT transaction volume to reach a certain amount, and is issued by manual review, which cannot fundamentally eliminate piracy and prevent user losses. We don’t know whether this obvious “loophole” is an official “oversight” or a deliberate “gap”.
As one of the users’ favorite NFT platforms, OpenSea has undoubtedly been given too much halo. In the decentralized world of NFT, OpenSea has too many rights, but has not fulfilled its relative responsibilities. Although OpenSea has taken the lead in this fierce market, the practice of placing the risk entirely on users will inevitably be abandoned by the market.
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