OpenSea, the world’s largest NFT marketplace measured by trade volume, has revealed that it has laid off 20% of its workforce. CEO Devin Finzer explained that the layoffs were caused by “crypto winter and broad macroeconomic instability.”
Compared to $2.6 billion (approximately Rs. 21,000 crore) in May, OpenSea’s NFT sales volume on the Ethereum blockchain plummeted to $700 million (about Rs. 5,600 crore) in June.
OpenSea, a non-fungible token (NFT) platform, announced on Thursday that it would slash costs in response to a protracted downturn in the market for digital assets by cutting around 20% of its personnel. Devin Finzer, the business’s chief executive, said in a message on Twitter that “the reality is that we have entered an unprecedented mix of a crypto winter and wider macroeconomic volatility, and we need to prepare the company for the likelihood of a prolonged slump.”
NFTs are blockchain-based digital assets that can be anything from text to tweets and artwork.
The biggest NFT platform, OpenSea, had tremendous sales growth in 2021 as a result of the emergence of a new class of cryptocurrency-rich speculators.
The NFT industry, however, has suffered recently as a result of the collapse in bitcoin values and the exodus of investors from riskier assets.
In June, OpenSea’s NFT sales volume on the Ethereum blockchain fell to $700 million (approximately Rs. 5,600 crore), down from $2.6 billion (about Rs. 21,000 crore) in May and a long way from the peak of nearly $5 billion in January (roughly Rs. 40,000 crore).
Under several possible downturn scenarios, according to Finzer, the employment losses would allow the company to maintain five years of growth at present volumes.
Coinbase and other businesses with a focus on cryptocurrencies and digital assets have recently been compelled to make job cuts.
In recent months, a sizable amount of wealth has been pulled out of the cryptocurrency business as a result of recession fears and the collapse of crypto ventures like Terra, intensifying the decline.
In response to losses plaguing the digital assets industry, Coinbase itself announced last month that 18% of its workers would be laid off.
Brian Armstrong, the CEO of Coinbase, admitted that the company had hired too many people and that this was now affecting the effectiveness of the business.
Other cryptocurrency businesses, besides OpenSea, have also laid off workers. In response to the economic downturn, Coinbase Global Inc., which runs a bitcoin trading platform, said in mid-June that it will lay off 18% of its workforce.
The beginning of June saw the layoffs of 100 employees at cryptocurrency exchange Gemini, or an estimated 10% of its employment, and 260 employees at Singapore-based Crypto.com, or 5% of its workforce.
A few weeks later, Coinbase and BlockFi both revealed they will be reducing their workforces by 18 and 20 percent, respectively.
Because venture capital firms were slowly reinvesting money into the market, there had been signs that the most vulnerable periods in the history of cryptocurrency had passed. The layoffs at OpenSea may indicate that the crypto winter is still very much alive.