“eBay for CryptoKitties:” OpenSea Raises $2 Million in Funding
Of all the things carried on the non-fungible token standards like ERC-721, CryptoKitties epitomizes the de facto fun use case for blockchain. As the first genuinely recreational use DApp, CryptoKitties and other items of that nature will now have a new trading place.
A CryptoKitty eBay
OpenSea is a new marketplace where users can buy and sell CryptoKitties alongside a host of other similar items. A Y-Combinator protege, on May 10, 2018, OpenSea announced that it had secured $2 million in seed capital from a funding round piloted by 1confirmation, with a hall of fame sampling of VCs joining in.
Investors included the Founders Fund, Blockchain Capital, Foundation Capital, Chernin Group, Coinbase Ventures, Blockstack and the Stable Fund.
The CryptoKitties game that allows users to buy, sell and raise digital cats was one of the first DApps to strike a chord with many within the cryptosphere and beyond. An overnight hit, the game caused major scalability issues for the Ethereum platform as it peaked in December 2017 following its launch the previous month. With a rapid uptake, the Ethereum blockchain had to cope with a massive spike in transactions.
The co-founder of OpenSea, Devin Finzer, said that “When CryptoKitties came out, it was this exciting, mainstream, fun use case for blockchain.” Many observers noted that the game’s launch was the singular event that propelled blockchain technology and cryptocurrency into the mainstream, while others posited different potential applications of the DApp construct in real estate and other arenas, beyond simply gaming.
Although Union Square Ventures and Andreessen Horowitz led a $12 million funding round that spun CryptoKitties into an opportunity to investigate alternative applications of non-fungible digital items, to date few original applications have emerged.
Of course near identical platforms have followed directly in the footsteps of CryptoKitties. CryptoCelebrities, CryptoPets and Crypto All-Stars are all game items looking for a marketplace, according to OpenSea. Another decentralized marketplace for real objects, OpenBazaar, is also planning to list things like CryptoKitties, and OPSkins has built the Wax platform to enable a decentralized exchange service for such items.
Finzer added that “We’ve so far had about half a million [USD] in volume pass through our marketplace.” He believes one of the key elements of their success is their close relationship with crypto game developers.
An Emerging Digital Store
OpenSea is becoming something of a default marketplace for games lacking a built-in marketplace. As developers build and seek outlets and encounter OpenSea, it is logical to position their game in the store’s window. Finzer also said that the company had “kind of developed a synergistic relationship with game developers,” on the back of a shared revenue model that splits sales between both parties.
Finzer also imagines sampling aspects of various games and making them available for sale. “I could be breeding zombies and you could be breeding kitties. I think what that results in is, these items having a lot more value than they would in [their] existing digital world.”
In that vein, a new game known as KittyRace lets users compete by racing their CryptoKitties.
This kind of mix-and-match has generated interest from other crypto-gamers too. The popular World of Warcraft game, for instance, generates a demand for gold so compelling that Chinese prisoners are forced to mine it so that it can be sold to Western users. Finzer said that the company would steer clear of trading digital items for hard cash, not only because many view it as a dubious business, but also as he doesn’t feel that many more traditional gaming companies are likely to swing to the blockchain.
“The technological benefits of moving an existing game to a blockchain are actually negative now,” he said. Finzer concluded by saying that “Our thesis is that the most interesting use cases for blockchain-based games will come from new games rather than existing games.”