OpenSea has discontinued the airdrop reward system following community outcry

OpenSea has suspended the listing and auction of XP awards after criticism.

Non-redeemable token (NFT) giant OpenSea has stopped short of its newly introduced airdrop reward system, drawing widespread criticism from its user base.

The move comes after concerns were raised about the platform's experience points (XP) system, which users say encourages wash trading, prioritizes payment generation and fails to support developers in the ecosystem.

The XP system has stopped

OpenSea launched the beta version of its updated marketplace OS2 on January 28, introducing a points-based method to determine a user's upcoming airborne simulation SEA eligibility.

However, community backlash quickly followed. Many have argued that the XP system is flawed and incompatible with the long-term sustainability of the NFT space.

In response, OpenSea co-founder and CEO Devin Finzer announced that the platform would end XP rewards for listing and bidding activities. Acknowledging the strong feelings surrounding points-based reward systems, Finzer said that while liquid incentives remain important to a competitive marketplace, OpenSea is taking a step forward to evaluate the best approach.

We've heard feedback on the current XP system, and we're putting a stop to the app for live listing and bidding. While we don't think liquid rewards are inherently bad, we do understand that there are a lot of strong feelings about point systems, and the NFT market as a whole is in a unique place right now. We're building an OS to support this space long-term, so we're thinking about how to move this program forward.

Instead of continuing with the criticized XP system, OpenSea will focus on newly introduced “XP shipments” to reward wider participation in OS2. Users who participated early with the beta version and provided feedback via Discord received the first round of shipments.

A second round is now being distributed to users who bought NFT on OS2, with additional XP multipliers from high-volume projects that have been held for more than three months.

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OpenSea data breach

The latest controversy comes a month after a report revealed that 7 million email addresses were compromised during the OpenSea 2022 data breach. The breach involved the NFT marketplace's email service provider, exposing the emails of industry experts including Binance founder Changpeng ‘CZ' Zhao.

A security expert warned that the “23pds” leak could further endanger the privacy and property of crypto users. OpenSea initially disclosed the breach in June 2022 to Customer.io, an employee of the supplier. But the full extent of the leak was only seen last month, leaving users vulnerable to fraud and malicious attacks.