OpenSea is having a tumultuous week 🌊
It provoked a community backlash on two separate issues: old listings and minting limits. Amid much Twitter noise we would like to give a clearer picture of what happened.
📝 Listings exploits. On Monday several attackers took advantage of a user interface flaw and managed to buy some of the most popular NFTs well below their market price, reselling them afterwards for a massive profit. The flaw concerns users who took their NFTs off the market by moving them to a separate wallet without cancelling their old listings (to avoid paying the delisting fee), and then decided to list them again. The attackers used a blockchain-scanning bot to look for pending transactions with a low floor and bought them.
OpenSea reacted to the exploits by adding a dashboard showing user’s inactive listings and sending emails to users urging to cancel old listings. The second one turned out to be a mistake 🤦
Users started to cancel old listings’, but the cancellation transactions were spotted by bots crawling in the mempool, from which miners take the transactions to include into a block, and front-run by higher-priority buying orders that used old listing prices. Which led to more users seeing their blue chip NFTs sold for fractions of a market price.
⚠️ Main advice to all concerned users now is NOT to return NFTs to the OpenSea-connected wallet until the old listing’s cancellation is confirmed on-chain.
⚒️ Minting limits. Another clumsy attempt to care about the platform users, this time by trying to protect them from fakes and spam, was OpenSea introducing 50 item limits to their free minting tool, without any kind of warning. Crypto Twitter was full of angry NFT creators who could not complete their collections.
This is a bad time for OpenSea to have angry users: a more community-oriented NFT marketplaces like LooksRare are stepping on its toes already.
So OpenSea tried to accommodate everyone:
👉the company has already reimbursed an equivalent of $1.8M to users who suffered losses in a listing exploit
👉 it reversed the minting limit decision.
It was surely a good thing to do, but will it be enough to keep its clients?..