OpenSea Stops Its XP Reward System After Receiving Massive Crypto Community Backlash

In a February 18 blog post, Dfinzer, the Chief Executive Officer of OpenSea NFT marketplace, confirmed that he and his team have halted the XP reward system for bidding and listing NFTs in the platform after receiving massive crypto community backlash.

OpenSea has halted its XP reward system for bidding and listing NFTs after receiving a strong community backlash.

Earlier this week, the NFT marketplace launched its updated marketplace “OS2” and started allowing users to earn XP tokens through bidding and listing NFTs. The XP reward program stirred a heated discussion on X (formerly Twitter,) causing many non-fungible token floor prices to plunge.

OpenSea Stops Its XP Reward System

In a February 18 blog post, Dfinzer, the Chief Executive Officer of OpenSea NFT marketplace, confirmed that he and his team have halted the XP reward system for bidding and listing NFTs in the platform after receiving massive crypto community backlash.

The NFT marketplace OpenSea launched its highly anticipated updated marketplace “OS2” alongside its native token $SEA over the past week. At the time, the market platform announced an upcoming token airdrop.

we've heard the feedback on the current XP system, and we're putting a pause on XP given directly for listing and bidding

while we don’t think liquidity rewards are inherently bad (see more below), we understand that there are a lot of strong emotions towards point systems, and…

— dfinzer.eth | opensea (@dfinzer) February 18, 2025

As part of its upcoming airdrop, the team started allowing crypto users to earn XP tokens by bidding and listing NFTs. Unfortunately, traders quickly identified ways of manipulating the XP system, including engaging in high-frequency flipping of NFTs with minimal losses to maximize their XP rewards. This illegal practice led to high-frequency trading, with top XP farmers flipping NFTs in seconds.

This form of wash trading pushed the marketplace volume to artificial highs, causing significant damage to NFT floor prices. In response to deteriorating floor prices, the global NFT community criticized OpenSea for prioritizing volume and fees over the long-term health of the NFT ecosystem. The OpenSea marketplace team has responded to this illicit practice by a group of farmers and halted the farming system. While addressing the controversy, Dfinzer remarked:

“We understand that there are a lot of strong emotions towards point systems, and that the NFT market as a whole is in a unique spot right now. We’re building OS to support this space long term, so we’re pausing this part of the rewards program while we think through the best path forward.”

What’s The Way Forward?

Before summarizing, the top OpenSea executive shared that the second round of shipments is now going out to a subset of users who bought NFT collections on the OS2. But this time, the reward system is improved, with XP multipliers given to NFT holders who have held an NFT from a top volume project for over 3 months. The NFT community has embraced this formula. In response to the recent OpenSea update, many NFTs have recorded some positive growth.

NFTs are so back right after the OpenSea update.

If you’re an American OS farmer, you’re probably sleeping right now and you’ll wake up with no NFT supply. pic.twitter.com/b4Bq03T5fz

— Loki The Bird ? (@lokithebird) February 18, 2025

NFT News Summary

OpenSea has halted its XP reward system for bidding and listing NFTs after receiving a strong community backlash.

Earlier this week, the NFT marketplace launched its updated marketplace “OS2” and started allowing users to earn XP tokens through bidding and listing NFTs. The XP reward program stirred a heated discussion on X (formerly Twitter,) causing many non-fungible token floor prices to plunge.

OpenSea Stops Its XP Reward System

In a February 18 blog post, Dfinzer, the Chief Executive Officer of OpenSea NFT marketplace, confirmed that he and his team have halted the XP reward system for bidding and listing NFTs in the platform after receiving massive crypto community backlash.

The NFT marketplace OpenSea launched its highly anticipated updated marketplace “OS2” alongside its native token $SEA over the past week. At the time, the market platform announced an upcoming token airdrop.

we've heard the feedback on the current XP system, and we're putting a pause on XP given directly for listing and bidding

while we don’t think liquidity rewards are inherently bad (see more below), we understand that there are a lot of strong emotions towards point systems, and…

— dfinzer.eth | opensea (@dfinzer) February 18, 2025

As part of its upcoming airdrop, the team started allowing crypto users to earn XP tokens by bidding and listing NFTs. Unfortunately, traders quickly identified ways of manipulating the XP system, including engaging in high-frequency flipping of NFTs with minimal losses to maximize their XP rewards. This illegal practice led to high-frequency trading, with top XP farmers flipping NFTs in seconds.

This form of wash trading pushed the marketplace volume to artificial highs,