Accusations of insider trading on the popular OpenSea marketplace prompted talks about the need for a decentralized non-fungible tokens (NFT) trading platform.
It began with an nameless thread on Twitter that alleged that the Head of Product at OpenSea, Nate Chastain, seems to have a number of secret wallets that purchase the marketplace’s drops earlier than they’re listed, “then sells them shortly after the front-page-hype spike for income, after which tumbles them again to his main wallet with his Cryptopunk on it.”
OpenSea confirmed that yesterday they realized that one their staff bought items that they knew were set to show on the front page earlier than they appeared there publicly.
“We’re taking this very seriously and are conducting an immediate and thorough evaluation of this incident in order that we’ve got a full understanding of the facts and additional steps we need to take,” the NFT unicorn said.
OpenSea added that they’ve additionally implemented a number of policies that forbid its team members from trading collections which might be featured or promoted by the corporate, amongst different restrictions.
In both case, as soon as this caught the Cryptoverse’s eye, the discussions began on whether that is illegal or simply unethical within the physical artwork world, but also on how helpful NFTs are to insiders – with some saying quite a lot, comparing them to fiat.
And a serious debate popped up again – that of decentralization within the space.
“Whether or not there is reality to the accusations of insider trading—OpenSea wants to make use of this as a catalyst to construct a more decentralized platform,” opined Compound Financeco-founder Robert Leshner. “Centralized systems and their users are vulnerable to bad decisions by humans.
As for whether such platforms exist, Alex Gausman, Founding father of NFTX, tweeted that it is a decentralized market, and that it’s the direction NFTX will be transferring as they complete options for automated liquidity. “Our decentalized autonomous organization treasury additionally has 71M net worth. All managed 100% onchain by Aragon. All votes requiring > 80% consensus to pass,” Gausman said.
Matthew Graham of Sino Global Capital chimed in, saying that if the rumors are true, Chastain must be fired, and regulation enforcement must be involved, whereas Maya Zehavi, a Founding Board Member of the Israeli Blockchain Industry Discussion board, argued that that is one thing the US Securities and Exchanges Commission (SEC) must be dealing with.