OpenSea IPO Hints Prompt Criticism From Crypto Users Expecting a Token

Amid OpenSea’s surge in NFT trading volume over recent months, one question has circulated among its heaviest users: will they eventually be rewarded with a token airdrop?

Now that the company has signaled plans for an initial public offering (IPO), some crypto die-hards fear that an OpenSea token won’t happen—and they’re speaking out about it.

Today, OpenSea announced the hiring of Brian Roberts as its Chief Financial Officer, hiring him away from ride-sharing service Lyft, where he held the same title. Roberts, who helped Lyft go public, told Bloomberg that he’s already planning the NFT marketplace’s IPO.

“When you have a company growing as fast as this one, you’d be foolish not to think about it going public,” he said, adding that he thought it “would be well-received in the public market given its growth.”

He might be right about the broader public reception. Popular cryptocurrency exchange Coinbase went public in April and generated a frenzy of investment and attention, with some hailing it as the most exciting IPO in years. Coinbase (COIN) smashed the NASDAQ’s reference price upon launch and showed that Wall Street was ready for crypto (and vice versa).

Not everyone was thrilled to see a crypto-centric company go the traditional IPO route, however. Coinbase’s first hire, Olaf Carlson-Wee (now CEO of Polychain Capital), told Decrypt in May that he thinks the exchange could have become significantly more valuable by launching and listing its own Ethereum token, instead.

With word of OpenSea’s impending IPO plans, other crypto natives are lamenting the NFT exchange’s apparent plans to shun community ownership via a governance token (i.e., one that grants users certain privileges, such as voting rights).

“Imagine being the largest and most successful NFT marketplace yet choosing to go for IPO instead of issuing [a] token,” wrote Arthur Cheong, founder of DeFiance Capital. He added “NGMI,” or “not gonna make it.”

“Sucks to hear OpenSea is selling out and doing an IPO,” wrote NFT collector Punk_2070. “Their VCs didn’t get them to where they are today. We did.”

To be clear, OpenSea has not definitively said that it will not issue a token. It could possibly concoct a hybrid model that combines a traditional IPO with some type of community token, for example. However, the IPO chatter has some observers thinking that OpenSea has decided on traditional corporate governance rather than a decentralized, token-driven model.

It’s not a new perception. Competing NFT marketplace Rarible has distinguished itself in part by launching its RARI governance token, which rewards collectors and creators for using the platform. SuperRare did much the same with its RARE token in August.

When Decrypt spoke to Rarible CEO and co-founder Alexei Falin last week—ahead of today’s OpenSea IPO chatter—he suggested that the competing marketplaces have different aims.

“We have a little bit different approach to OpenSea,” Falin told Decrypt. “We are trying to be a Web3-native company—decentralized as much as we can.”

Ethereum Name Service (ENS) is a recent example of a crypto project that airdropped a governance token, distributing millions of tokens to the wallets of early users in November. Within days, the market cap of distributed tokens surpassed $1 billion. Currently, the fully diluted market cap sits at $4.7 billion, per CoinGecko.

Today’s OpenSea IPO chatter has some in the crypto industry convinced that the leading marketplace—which handles billions of dollars’ worth of NFT trading volume each month of late—has made its decision. And in their view, it’s not on the side of decentralization and community ownership.

“Crypto companies going public will never make sense to me,” tweeted DAO builder Cooper Turley. “Give ownership to the community that makes you valuable. Tokens will win over equity every time.”