OpenSea, the largest NFT marketplace, acquired NFT aggregator Gem.xyz (Gem) to "better serve" its more experienced users, the company said in a blog post. The deal, which comes a few months after OpenSea bought DeFi wallet startup Dharma Labs, will allow OpenSea to "learn from Gem’s expertise and intuition about the advanced NFT community," the company said.
The news comes about two weeks after Gem removed Josh Thompson, a core developer and former shareholder at the company, from its team over allegations from several individuals that Thomson had engaged in rape, sexual harassment and the grooming of minors, as BuzzFeed News first reported.
Thompson, who held shares in Gem prior to the transaction, was terminated from Gem without severance at that time, and the deal with OpenSea was contingent upon both his departure from the company and his liquidation from Gem's cap table, a spokesperson for OpenSea told TechCrunch. Thompson does not hold shares in Gem or OpenSea today.
"During the course of our diligence, we learned about, and immediately surfaced, some deeply concerning allegations against a now-former member of Gem’s leadership team who operated under the pseudonym Neso. Upon investigating the allegations, the employee was immediately exited prior to the close of this deal. This individual has never and will never be affiliated with OpenSea," OpenSea wrote in the blog post.
Gem said the acquisition offer from OpenSea was unexpected, adding that the company will now have access to OpenSea's infrastructure and resources to accelerate its growth, The Block reported. Terms of the transaction were not disclosed. Venture firms Dragonfly Capital Partners, Sfermion and Tioga Capital Partners are all investors in Gem, according to PitchBook.
Gem's product allows users to buy NFTs across multiple marketplaces in a single transaction, pay with any ERC-20 token rather than spending their ETH and view analytics such as sales volume, floor prices and rarity-based ranking for NFT collections. As an aggregator, the company claims its product saves users up to 40% on gas fees compared to using an NFT marketplace like OpenSea directly. Its users often leverage the platform for "floor-sweeping," a term that refers to acquiring multiple of the lowest-priced NFTs in a given project.
Gem will continue to operate as a standalone product and brand, OpenSea wrote in the post, though OpenSea plans to integrate some of Gem's features with its own platform. Some people expressed disappointment over the acquisition in their replies to Gem's announcement tweet, referencing the centralized nature of the OpenSea platform.
207,577 transactions had been completed on Gem as of midday Monday, April 25, according to data provider Dune Analytics. The platform has added over 48,000 new users since last September, the Dune data shows.
Note: A previous version of this article incorrectly featured an image belonging to a different company, also called Gem, that has no connection to the NFT aggregator. The image has been updated.