OpenSea, a non-fungible token (NFT) marketplace, is the latest to succumb to the digital assets market pressure. OpenSea has announced letting go of 20% of its employees.
Devin Finzer, co-founder and head of operations at OpenSea, took to Twitter to share the note that was circulated among OpenSea employees, adding that each of the affected employees had been met one-on-one and would continue to get support from the company.
Today is a hard day for OpenSea, as we’re letting go of ~20% of our team. Here’s the note I shared with our team earlier this morning: pic.twitter.com/E5k6gIegH7
— Devin Finzer (dfinzer.eth) (@dfinzer) July 14, 2022
In the note, Finzer attributed the decision to “an unprecedented combination of crypto winter and broad macroeconomic instability” and the “need to prepare the company for the possibility of a prolonged downturn.”
“The changes we’re making today put us in a position to maintain multiple years of runway under various crypto winter scenarios (5 years at the current volume), and give us high confidence that we will only have to go through this process once,” he added.
According to Earthweb, OpenSea had around 110 employees as of July. The NFT marketplace has built a considerable war chest from its funding round, which raised around $300 million. OpenSea has an estimated market value of around $13.3 billion.
Digital assets market facing a liquidity crisis
OpenSea was also one of the biggest beneficiaries of the 2021 NFT craze, generating revenue of $365 million during the year but has struggled to find its footing in 2022. Bloomberg reports that OpenSea saw its sales volume drop by 75% between May and June, setting a new record low since July 2021.
According to the report, this coincided with the NFT market recording its first month with under $1 billion in sales since June 2021. Additionally, OpenSea has had its fair share of other controversies plaguing the NFT market, including hacks, lawsuits, and a recent data breach.
Many other digital assets firms are also preparing for the possibility of a prolonged liquidity crisis. Several major exchanges, including Coinbase (NASDAQ: COIN), Crypto.com, and Gemini, have cut down their employee headcount in recent months, with Business Insider calculating that digital assets firms cumulatively let go of around 1,700 employees in June alone.
Other lending platforms like Celsius and asset managers like Three Arrows Capital (3AC) and Voyager have gone belly up, filing for bankruptcy. The market capitalization of all digital assets has fallen to less than $1 trillion from an all-time high of nearly $3 trillion.
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