As the NFT market has exploded, so has the amount of theft and fraud associated with it. Artists are by now familiar with the experience of finding, like in a horror movie, their own art staring back at them in OpenSea's digital gallery, being hawked by an anonymous stranger.
Now, OpenSea has revealed just how much of the NFT activity on its platform is defined by fakery and theft, and it's a lot. In fact, according to the company, nearly all of the NFTs created for free on its platform are either spam or plagiarized.
The revelation began with some drama. On Thursday, popular NFT marketplace OpenSea announced that it would limit how many times a user could create (or "mint") an NFT for free on the platform using its tools to 50. So-called "lazy minting" on the site lets users skip paying a blockchain gas fee when they create an NFT on OpenSea (with the buyer eventually paying the fee at the time of sale), so it's a popular option especially for people who don't have deep pockets to jumpstart their digital art empire.
This decision set off a firestorm, with some projects complaining that this was an out-of-the-blue roadblock for them as they still needed to mint NFTs but suddenly couldn't. Shortly after, OpenSea reversed course and announced that it would remove the limit, as well as provided some reasoning for the limit in the first place: The free minting tool is being used almost exclusively for the purposes of fraud or spam.
"Every decision we make, we make with our creators in mind. We originally built our shared storefront contract to make it easy for creators to onboard into the space," OpenSea said in a tweet thread. "However, we've recently seen misuse of this feature increase exponentially. Over 80% of the items created with this tool were plagiarized works, fake collections, and spam."
That's a very large figure, and one that is probably not surprising to artists whose work has been stolen en masse and minted into NFTs. That OpenSea would risk its reputation with such a sudden and impactful move also gives us some indirect insight into the scale of the fraud problem that free minting is causing for OpenSea itself.
"In addition to reversing the decision, we’re working through a number of solutions to ensure we support our creators while deterring bad actors," OpenSea said on Twitter, adding that it will preview future decisions with users before implementing them.
For now, though, it seems as if OpenSea is stuck between a rock and a hard place, those being the sea of outrage of every non-crypto person, and the outrage of its own users.
An OpenSea spokesperson directed Motherboard to the platform's comments on Twitter.