Cryptocurrency exchange giant Binance bared plans that it is launching its own marketplace for nonfungible tokens or NFTS.
NFTs are a kind of digital asset that ascribe ownership of rare digital items. NFTs can go from artworks, sports memorabilia, collectibles, and others.
So how exactly does an NFT work? Consider a painting. It is of high value because it is rare, authentic, and cannot be replicated. However, digital products can be copied endlessly. NFTs resolve that dilemma. Using blockchain technology, it’s possible to “tokenise” a piece of art through a digital certificate of ownership.
According to NonFungible.com, these digital collector’s items have created so much hype, with sales soaring to more than $2 billion during the first quarter of 2021. For example, in March, artist Mike Winkelmann AKA Beeple sold his NFT for $69 million at Christie’s.
Binance NFT marketplace to debut in June
Binance has announced that its NFT marketplace will serve two markets – a premium one and a standard one. The premium market will cover high-value exhibitions and top auctions, while the standard trading marketplace is where any user can mint, buy or exchange new tokens.
The company has announced that Binance NFT will launch in June. In addition, its website now features a landing page open for artists interested in collaborations.
Binance NFT is powered by the same ecosystem as Binance.com, giving users access not only to the NFT marketplace but also to the Binance ecosystem.
For the ‘Premium Events’ marketplace, sharing will be 90-10, 90% to the artists and 10% to Binance. Meanwhile, the standard trading platform will retain a 1% processing fee, and creators get a 1% royalty.
Helen Hai, head of Binance NFT, says that the objective “is to provide the largest NFT trading platform in the world” that relies on fast, efficient and inexpensive Binance blockchain infrastructure.
Game on for NFT rivals
Binance’s announcement places it in direct competition with Gemini, a cryptocurrency exchange company with its own NFT marketplace, Nifty Gateway. Gemini’s NFT platform has starred A-list artists like Grimes and Eminem.
Therefore, Binance’s foray into the NFT market adds to its existing revenue stream already boosted by the exceptional popularity of bitcoin and other crypto products.
Crypto popularity to give Binance the boost
Given the surge of interest in cryptocurrencies and other digital assets, Binance is riding this wave to push its NFT platform. Other crypto exchange companies have profited from skyrocketing crypto prices.
US-based Coinbase, the biggest cryptocurrency exchange in the country, debuted on the Nasdaq in April.
Bitcoin has bounced back remarkably this year after being deemed too volatile in 2018. Since March of last year, Bitcoin prices have surged by 800 percent. The pandemic has seen investors hurrying to protect their money on alternative assets such as Bitcoin. This could explain why NFTs are trending at the moment.
Whether this NFT mania will hold is up for debate. However, there are premature signs of market froth. Some analysts have likened the NFT boom to the ICO frenzy in 2017 and 2018, which ultimately became a bust.
