OpenSea Halts Airdrop Reward System Following Community Backlash
Non-fungible token (NFT) giant OpenSea has halted its newly introduced airdrop reward system following widespread criticism from its user base.
The move comes after concerns were raised regarding the platforms experience points (XP) system, which users claimed encouraged wash trading, prioritized fee generation, and failed to support builders within the ecosystem.
XP System Paused
OpenSea launched the beta version of its upgraded marketplace, OS2, on January 28, introducing a points-based mechanism to determine user eligibility for an upcoming airdrop of its native token, SEA.
However, community backlash quickly followed. Many argued that the XP system was flawed and did not align with the long-term sustainability of the NFT space.
In response, OpenSea co-founder and CEO Devin Finzer announced that the platform would be pausing XP rewards for listing and bidding activities. Acknowledging the strong sentiments surrounding point-based reward systems, Finzer stated that while liquidity incentives remain important for a competitive marketplace, OpenSea is taking a step back to reevaluate the best approach.
Weve heard the feedback on the current XP system, and were putting a pause on XP given directly for listing and bidding. While we dont think liquidity rewards are inherently bad, we understand that there are a lot of strong emotions towards point systems, and that the NFT market as a whole is in a unique spot right now. were building OS to support this space long term, so were pausing this part of the rewards program while we think through the best path forward.
Instead of continuing with the criticized XP system, OpenSea will focus on XP shipments, a newly introduced mechanism that aims to reward broader participation in OS2. Users who engaged with the beta version early and provided feedback via Discord have already received the first round of shipments.
A second round is now being distributed to users who have purchased NFTs on OS2, with additional XP multipliers for those holding assets from top-volume projects for over three months.
OpenSea Data Breach
The latest controversy comes a month after a report revealed that 7 million email addresses were leaked during OpenSeas 2022 data breach. The breach involved NFT marketplaces email service provider, exposing the emails of industry professionals, including Binance founder Changpeng CZ Zhao.
Security expert 23pds warned that the leak could further endanger the privacy and assets of crypto users. OpenSea initially disclosed the breach in June 2022 and attributed it to an employee of its vendor, Customer.io. However, the full extent of the leak only surfaced last month which left users vulnerable to scams and malicious attacks.
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