As NFT behemoth OpenSea deals with the consequences of an insider front-running scandal, a new threat could emerge; an open-source competitor aiming to lay the basis for a vampire attack.
Andre Cronje has launched Artion, an NFT marketplace on the Fantom blockchain, after weeks of promoting the launch on Twitter.
Artion has a front end that looks strikingly similar to OpenSea, the undisputed NFT industry leader, which processed $3.5 billion in volume in August and is said to control over 95 percent of all NFT sales.
Unlike OpenSea, Artion’s code is completely open-source, and there are no fees associated with minting or acquiring NFTs. OpenSea features a flat 2.5 percent cost on all purchases and is built on Ethereum, a network that excessive fees have recently plagued. The cost of approving a contract transaction can easily exceed $15 in network fees.
Artion is preparing a powerful cross-chain market with an NFT token bridge, according to Cronje, and the platform will launch “on a new chain every week,” with Ethereum, Arbitrum, Avalanche, and Polygon as early targets.
Cronje also stated that he “encourages” forks of his new project – spin-offs that will siphon volume from Artion and OpenSea simultaneously.
Vampire coven
Artion appears to be a straightforward vampire attack on OpenSea at first glance.
Vampire attacks are a typical occurrence in decentralized finance (DeFi), in which a competitor to an incumbent protocol – commonly a fork of the “victim’s” code – offers higher incentives in the hopes of causing a liquidity migration.
Sushi, whose vampire assault in September 2020 caused the decentralized exchange to momentarily overtake rival Uniswap in the well-monitored total value locked (TVL) measure, is perhaps the most notable example.
Vampire attacks are frequently rationalized as ideological, even though they are usually mercenary. For example, sushi supporters claimed that a disproportionate number of Uniswap’s UNI tokens went to early venture capital investors. In contrast, according to supporters, Sushi distributes tokens more widely to users — a mechanism that better represents the open, permissionless essence of crypto.
Members of the community have long wondered if OpenSea may target a similar type of attack. OpenSea does not have a token and has spent the last year raising hundreds of millions of dollars in private equity rounds.
OpenSea raised $100 million in July with a valuation of $1.5 billion.
Starting fires
Despite being a target, Cronje stated that a direct vampire attack is “not my play.”
“We’re entirely open-sourcing it and encourage teams to fork it. There is a built-in fee mechanism, so anyone can turn it on and pay fees to token holders.”
For the “lifecycle” of the project, Cronje said that Artion will not charge for minting, listing, or selling NFTs, but that “we urge forks to take it and add a token” and that the technology is built to make adding fees and tokens straightforward.
Forks of Artion could theoretically provide token incentives for users who bridge NFTs from one chain to another, in addition to potentially lucrative platform usage fees.
Artion is, in fact, a marketplace that intentionally invites a vampire attack on itself – and, by extension, an attack on OpenSea.
Cronje said the ripple effects motivate him and the rest of the seven-person Artion team to spend months constructing a project that has the potential to be enormously successful but for which they will receive no definite remuneration.
He remarked, “I enjoy designing open protocols and then seeing what people can do with them.”
Cronje went on to say:
“I like starting fires.”
Attack-ready
The attack-by-proxy occurs at a particularly inconvenient time for OpenSea.
On Sept. 14, a viral Twitter thread revealed on-chain evidence that Nate Chastain, the then-OpenSea Head of Product, was buying pieces from artists before they were shown on the marketplace’s homepage.
According to community-sourced efforts, the executive, who has since amended his Twitter bio to reflect he has quit, profited as much as $65,000 flipping these works.
One significant distinction between the platforms, according to Cronje, is that Artion encourages third-party development and forks.
He described the platform as “developer-first,” saying, “Artion smart contracts are meant to support third-party [user interfaces] and on-chain only contracts.”
Artion will be released under a modestly modified version of the GPL-3 license, a prominent open-source standard that requires forks to start on Fantom first before moving on to other chains but is otherwise very permissive.
While the tools to start an attack are now openly available, Cronje estimates that viable forks will take up to a month to emerge.
“Even for a skilled team, getting acclimated to the code base should take roughly five days, followed by another 5-10 days for setup and deployment. So it’ll take 3-4 weeks to get a good fork,” he wrote.