Binance, the world’s largest cryptocurrency exchange, is launching an NFT marketplace
Changpeng Zhao, CEO of Binance, speaks during a television interview in Tokyo, Japan on Thursday, January 11, 2018.
Akio Kon | Bloomberg | Getty Images
LONDON – Cryptocurrency Exchange Binance announced plans on Tuesday to launch its own marketplace where users can create, buy and sell digital collectibles called NFTs.
Non-fungible tokens are a type of digital asset. They are designed to represent possession of rare virtual items – it can be anything from works of art to sports trading cards such as those sold on the popular online basketball collectibles platform NBA Top Shot.
Total revenue from these tokens rose to over $ 2 billion in the first quarter, according to NonFungible.com, a website that collects data on NFTs. And that number doesn’t even explain the record-breaking $ 69 million NFT digital artist Mike Winkelmann (AKA Beeple) sold at Christie’s in March.
Binance, the world’s largest crypto exchange by trading volume, said its platform would serve two markets: a premium venue for top auctions and exhibitions, and a standard trading market where anyone can mint new tokens.
The premium segment would lower major auction sales by 10%, Binance said, while 90% would go to artists. A “processing fee” of 1% is charged for the daily trading market, while the authors, according to Binance, “continuously receive a 1% license fee”.
Binance’s NFT functionality is expected to be rolled out in June. The company has launched a landing page where artists can inform the company about possible partnerships.
“Our goal is to bring the best mint, buy and exchange experience to the world’s largest NFT trading platform by leveraging the fastest and cheapest solutions powered by Binance’s blockchain infrastructure and community,” said Helen Hai, head of Binance’s NFT project.
The move presents a challenge for Gemini, the crypto exchange founded by Tyler and Cameron Winklevoss. Gemini operates its own NFT marketplace, Nifty Gateway, which has hosted auctions from big names like Eminem and Grimes. This would also open up new revenue streams for Binance, which have benefited significantly from the growing interest in Bitcoin and other digital currencies.
Coinbase, the largest crypto exchange in the United States, went public on the Nasdaq earlier this month. Like Binance, Coinbase has also received a significant boost from rising crypto prices. Bitcoin, the world’s most popular digital currency, hit an all-time high of nearly $ 65,000 before Coinbase made its debut. It’s now down nearly 16% from that level.
There has been concern about signs of foam in the market. Some have compared the NFT boom to the surge in initial coin offerings (ICOs) in late 2017 and early 2018. ICO mania led to a number of scams and many projects were ultimately abandoned. Meanwhile, Dogecoin hit a record over 45 cents a few weeks ago, sparking fears of a bubble in the crypto market.