Binance to Launch NFT Marketplace in June
Binance, the world’s biggest cryptocurrency exchange by trading volume, announced on Tuesday that it wants to launch its own marketplace for digital items tied to non-fungible tokens, or NFTs. It would lead to a major venue for the burgeoning digital assets market, along with intense competition for creators and investors alike.
NFTs are online items created on a blockchain that is commonly used to certify unique ownership of a digital asset such as paintings, music, games, or sports collectibles. The NFT industry has been here for a while, dating back to the invention of blockchain, but it has recently piqued the interest of mainstream investors after greater collectibles were sold at record-breaking prices.
According to NonFungible.com, a web portal that tracks data on NFTs, the sales volume of NFTs skyrocketed to much more than $2 billion in the first quarter of 2021, over 20 times the volume of the previous quarter. Binance’s NFT marketplace will launch in June, with two venues for artists and traders to generate, purchase, and sell digital assets.
In contrast, the norm trading market allows anybody to create or deposit NFTs for sale or auction for a 1% processing fee. The founders or depositors will be paid a 1% royalty on all corresponding trades.
“Binance supports millions of users worldwide, most of whom will now be able to receive the thriving NFT space,” said Binance CEO Changpeng “CZ” Zhao in a statement. “In maintaining of our loyalty to international financial autonomy and the development of an inclusive ecosystem, the Binance NFT marketplace will also help small value creators by achieving the best cash flow and the lowest fees for use.”
Binance is the most recent cryptocurrency exchange to launch its own NFT marketplace. Gemini’s Nifty Gateway has hosted auctions with good artists such as Eminem and Grimes. In March, Crypto.com launched its invite-only market, which starred content from Snoop Dogg, Lionel Richie, and Boy George.
Crypto exchanges have already benefited from increasing Bitcoin prices and expanding investor interest in digital currencies. Coinbase, the largest cryptocurrency exchange in the United States, went public earlier in the month via a direct listing. Its share prices are now trading near $300, up approximately 20% from the $250 standard price set by Nasdaq prior to the stock’s trading launch.
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The NFT marketplace would provide Binance with a revenue source, though artists and investors are likely to be more uptight as to which exchange they use as more NFT marketplaces become available. But even so, a peek at trading volumes and average prices suggest that the NFT buzz is already receding in recent weeks after spiking Earlier, this year.
The volume of NFTs traded has dropped by about half since the peak in mid-March, but still, it stays high when compared to just a few months earlier. According to the latest NonFungible.com review, the average cost of NFTs spiked by about $4,000 in mid-February but has now declined to around $1,500. Nonetheless, the existing average cost is ten times higher than it was just six months ago.
Some have compared the NFT boom to the late-2017 or early-2018 craziness over initial coin offerings, or ICOs. Though some assume the recent decline in NFT activity is the commencement of a market correction and the bursting of the NFT bubble, NonFungible.com knows it probably reflects — a long — term stability following a theoretical pinnacle.