Recently, the non-fungible token (NFT) marketplace OpenSea has been a hive of activity, with auctions and sales-driving up gas prices. However, it appears that something fishy is going on.
OpenSea has surpassed Uniswap as the largest user of Ethereum in terms of network transactions. According to Etherscan, the NFT marketplace has generated $2.5 million in fees in the last 24 hours.
According to BeInCrypto, OpenSea and other NFT platforms have surpassed DeFi in terms of Ethereum usage and fee burning, dethroning Uniswap.
According to Ultrasound.money, OpenSea has burned nearly 1,900 ETH, or $6 million, in transaction fees in the week since EIP-1559 went live.
The NFT show is being run by bots.
OpenSea is a marketplace where NFTs can be resold in auctions to investors on secondary markets. According to recent research by The Defiant, it appears that the auction system is being abused by bots.
It discovered that Ethereum wallets appear to be canceling orders at an alarming rate, with over a quarter of the last thousand transactions involving the OpenSea contract being canceled.
In a tweet on August 10, industry researcher Mike Dudas blamed these bots:
“At the moment, the bots are outbidding Opensea by bidding below the floor on pieces and then canceling bids once accepted but before executing. The effect is to pull series + editions prices lower and lower until they strike, then pull the reverse move to lure price higher after buying up.”
According to a well-known Solidity developer, the bots wait to see if anyone accepts their bid before canceling it and causing the acceptance to fail. “This frustrates and desperates users, and they try again, but this time at a lower price,” the developer explained to The Defiant.
Concerns to be addressed
According to the report, many users have also reported “execution reverted” errors, which OpenSea claims are typically caused by an item being locked or non-transferrable. Canceling bids is not free, and rising gas prices may render the auction system obsolete if bots are ahead of the game.
According to the report, the NFT space has been portrayed as a decentralized avenue for creators to monetize their digital works for avid collectors, rather than a place where artless bots manipulate value.
The article’s author, Owen Fernau, concluded:
“With bot rumors circulating, users complaining of slow rendering NFTs and slow responses to support tickets, and eight engineering positions to fill, OpenSea has a lot on its plate.”
At the time of publication, average gas prices had risen to around $20 per gallon, the highest level since late May.