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Kc  · 09/01/22

Why are people's expensive NFTs vanishing from their accounts?

09/06/22 · Reports · This is not a financial advice
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Opensea is still the most popular platform that lists volumes of NFTs, specialising in low-key NFTs good for traders to speculate on. There are other, high profile NFT markets that build their branding around selling art that is hand-picked, thoroughly researched and therefore very costly. These are closed NFT marketplaces: Artists who can sell on them are carefully selected, not everybody gets in.

Opensea doesn’t do that, they run an open marketplace. Everyone can make an account and start selling their NFTs. That is great for lowering the barriers of entry but it opens the door to fraud.

And fraud is the reason why people’s NFTs are often vanishing. If the marketplace finds that it listed an NFT that breached some part of their terms of use, such as being a forgery of a different artwork, that NFT gets booted from the platform.

The NFTs do not actually vanish

When you buy an NFT on Opensea or anywhere else, it is your crypto wallet that receives the token, not your Opensea account.

If the NFT breaches terms of use, the marketplace will have to delist it so as to not be complicit in a breach of law. You still own the NFT, but your Opensea account will not render it anymore.

If you want to verify that, download one of the web3-friendly wallets that support NFT galleries such as Metamask or Exodus. Import you wallet there and you will find your delisted NFTs.

So does the delisting of your NFT mean nothing for you? Well, it means that you probably won’t turn profit on that NFT, because it’s either a forgery or for some other reason it will be difficult to get it listed anywhere for sale.

How does this impact the NFT trading market?

Over time, detection of forgeries on the side of the marketplace will probably improve - but as is known from the world of traditional art, it’s never perfect.

So long as there is a risk of forgeries making their way onto marketplaces like Opensea, there will be the risk of NFTs being delisted and vanishing, and worse, as a consequence becoming pretty much worthless.

This is not likely going to have any chilling effect on the NFT market as a whole. The bulk of Opensea traders treat NFTs as a chartless alternative to penny stocks or low cap cryptos - you spend some money on them hoping to maybe make it out well.

It deserves to be noted though that since wash trading and artificial inflating of prices is common in NFTs, some of the fake tokens can get quite expensive. Some people will see that as a tuition paid by the trader, some will probably start complaining that all crypto is a scam.

Final words

NFTs are the latest application of blockchain technology that are claiming to revolutionize the markets for digital collectibles, event tickets, and commodified culture as a whole. It is one of the last tradable spaces where people display any form of revolutionary attitudes, a sentiment that seems by and large as unwarranted.

However, because NFTs are unregulated and live on the blockchain, they also open the door to fraud. This is why people’s NFTs are often vanishing from Opensea and other marketplaces. While this may not have a chilling effect on the NFT market as a whole, it is something that traders should keep in mind when investing in these digital assets.

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