OpenSea Suspends XP Reward System After User Backlash

Non-fungible token (NFT) market OpenSea has paused its new XP reward system following criticism from customers.

On February 13, OpenSea launched the beta model of its upgraded platform, OS2, calling it “a totally reimagined product constructed fully from the bottom up.” The replace included a brand new factors system that will decide eligibility for an upcoming airdrop of the platform’s native token, $SEA.

Nevertheless, many customers criticized the system, arguing it might encourage wash buying and selling and was designed primarily to generate charges.

In response, OpenSea CEO Devin Finzer addressed the backlash on X (previously Twitter). He wrote, “we’ve heard the suggestions on the present XP system, and we’re placing a pause on XP given straight for itemizing and bidding.” 

He added, “I recognize the suggestions. we’ll proceed to work carefully with those that have useful concepts. however a number of the vitriol I noticed on X this weekend gave the impression to be primarily motivated by extraction / makes an attempt to carry OS down.”

Talks of a “revamped” platform had been circulating since final 12 months, when Finzer said the workforce would “reimagine the whole lot” and rebuild OpenSea “from the bottom up” to enhance safety and ship a extra personalised expertise.

To assist the overhaul, OpenSea restructured its operations in 2023, chopping its workforce by as much as 50%. It was the second spherical of main layoffs after a earlier one in 2022.

The platform has confronted rising challenges. In Could 2024, OpenSea’s buying and selling quantity dropped to ranges final seen in April 2021, signaling a decline in NFT market exercise.

Regulatory stress has additionally elevated. In August 2024, the SEC issued OpenSea a Wells discover, suggesting that NFTs offered on the platform is likely to be categorized as securities.

Authorized points adopted. In September 2024, two customers filed a class-action lawsuit accusing OpenSea of promoting unregistered securities. Nevertheless, the lawsuit ended when each customers withdrew their claims after OpenSea invoked binding arbitration.