NFTs (non-fungible tokens) have conquered the whole world. Probably only those who decided not to use the Internet at all in 2021 have not yet heard of this new class of digital assets.
But what are non-fungible tokens? Where can I buy them? And most importantly, what are the critical details you need to understand before becoming a part of the growing economy of these digital goods?
Let’s start with the basics: what exactly are NFTs?
NFTs are cryptographic tokens on the blockchain that represent “unique” assets. These assets can exist in both the real and the digital world. NFTs allow holders to prove not only their authenticity, but also the origin of the underlying asset. Together with them, the concept of scarcity came to the world of digital assets.
At the end of June, we already announced the launch of the NFT Binance platform, which facilitates the transition of digital assets to blockchain. By creating NFTs on the blockchain, authors establish direct interactions with their fans without any platform-related risks. All entities, regardless of their location, interact with NFT contracts on the same terms, while remaining free from proprietary platforms and related restrictions.
NFTs created on the blockchain cannot be changed. It gives a sense of ownership and security. Open NFT standards lead to network effects, interoperability, interoperability, and ultimately, we believe, to many exciting innovations in digital goods.
As the NFT industry evolves, you will likely be faced with a tremendous amount of updates and information every day. To help you figure it out, here’s a quick rundown of four things to look out for before buying anything on the NFT market.
What interests you and how does this affect where you buy NFTs?
Before diving into the world of NFT, it is important to understand which type of NFT might interest you the most. Fortunately, there are a limitless number of NFT categories, with digital art, games, and music dominating today.
Is it inspiring? Within these categories (and in general all categories), there can be further division into subcategories, including NFTs, which can be considered premium (for example, created by recognized artists / authors) and more basic (created by any other authors). Where you decide to buy your NFTs will depend a lot on the type of NFT collection you want to collect.
There are various marketplaces that host different types of NFT collections. These sites target audiences in a wide variety of niches, from general categories to specific industries such as games or art. For newbies looking to explore a wide range of NFTs, Binance’s recently launched premium NFT decentralized platform, as well as Binance’s NFT marketplace, are a great starting point. From world-class NFTs created by renowned artists to emerging NFTs, there is something for everyone at these venues.
Liquidity and market size
In the early days of NFT, most of what was on the market could be categorized as collectibles. These types of NFTs are usually bought and then held by the buyer in the hope that the asset will eventually rise in value.
However, as with physical paintings, the ability to resell an asset in the market can be difficult, especially if the underlying asset is not currently popular. Therefore, it is important to remember that buying NFT is significantly different from buying bitcoin, which is always liquid, due to the large market volumes on cryptocurrency exchanges. Depending on the type and popularity of the acquired NFTs, in anticipation of an increase in its value, you may face long-term low liquidity and low demand for the asset.
Fortunately, unlike other NFTs, Binance has a unique offering for buyers and sellers looking to have higher liquidity guarantees for the NFTs they buy. As a leading cryptocurrency exchange, Binance will create a natural bridge between the trading platform and the NFT platform. Users will be able to use both instruments without any hindrance, which in turn will lead to increased liquidity and facilitate trading in the NFT market.
In addition, Featured by Binance, the leading decentralized NFT platform, will focus on helping our brand partners launch NFT assets with a rich and unique history, leveraging Binance’s vast experience in launching tokens and creating markets for the NFT world. As an asset trading hub for NFT creators and collectors, Featured by Binance will provide all the tools to create, sell, and showcase NFT creations.
It happens to everyone. We find what we were looking for, go to the checkout page with the initial price in mind, and are surprised to find a huge transaction fee added to the total. Since NFT prices vary widely, it is extremely important to know in advance not only the amount of transaction fees on the platform, but also the amount of gas fees on the token’s blockchain.
Transaction fees vary significantly, and even the term “transaction fee” itself can have different meanings on different platforms. However, if by transaction commission we mean all the additional expenses on the sale that are allocated to the platform or the author, then on average it turns out that the commission on NFT platforms is on average from 2.5% to 15%!
That is why you should carefully consider what additional costs may arise in connection with a particular NFT transaction. For newcomers to the NFT space, the Binance marketplace can be a good place to start. And it’s not just that it covers a wide range of NFT categories. Commissions for transactions on the platform are only 1%! Platform participants can be sure that when making transactions, they will not encounter unexpected commissions while completing a transaction.
Finally, gas charges. Gas fees are required to confirm and add transactions to the blockchain. On the ETH network, transaction fees reached $ 70 per transaction. But Binance NFT transactions will take place on the Binance Smart Chain, where gas charges are extremely low and are usually measured in cents rather than dollars.
Many NFT marketplaces are ordinary marketplaces, just platforms for exchanging digital assets on the blockchain. Meanwhile, the experience with NFT can (and should) be much more extensive. NFTs open up many opportunities in both the real and the digital world. Not only do they bring creators closer to their audiences – they create a stir that the digital asset industry has never seen before.
So far, we’ve talked about NFTs mostly as collectibles, but their scope is much broader. With the help of NFT, platforms such as Decentraland and Axie Infinity have introduced a type of utility that was previously not available in the virtual world. These utilities allow members of the mentioned platforms to trade and exchange valuable items with each other regardless of the platform itself.
This is just the beginning …
The NFT sphere is only gaining momentum. And today is the best time to start working with a new asset class. There are great prospects for those who want to become a part of this field or simply engage in collecting NFTs. As this area develops, more and more participants are involved.
In turn, companies such as Binance are launching new NFT platforms, allowing their users to acquire the appropriate experience. In other words, now is a great time to get involved in the NFT economy.