How FTX's NFT Marketplace Could Rival OpenSea In Market Domination

What are NFTs?

NFTs, short for non-fungible tokens, have been around for years in the crypto space but are a fairly recent phenomenon in mainstream culture.

NFTs broke into the mainstream culture after digital artist Beeple auctioned “Everydays: The First 5000 Days” at Christie’s for a whopping $69 million paid in ether (ETH), the native coin of the Ethereum blockchain.

Since Beeple’s auction, a ton of celebrities, musicians, movie stars, and sports players have forayed into the NFT space to experiment with the emerging technology. Recently payments processing giant Visa bought itself a CryptoPunk for $150,000, indicating strong trust in the longevity of NFTs.

While naysayers are still skeptical about the future of NFTs, saying it does not hold any intrinsic value, NFT marketplaces are thriving unlike any other business on the planet today.

OpenSea

Consider the example of OpenSea, the go-to NFT marketplace for all major Ethereum-based NFTs such as CryptoPunks, BAYC, and others. In August alone, OpenSea witnessed a transaction volume of a staggering $3.4 billion for Ethereum-based NFTs, which was 10x more than the total trading volume in August.

While OpenSea continues to enjoy a virtual monopoly in the NFT marketplace space, it did not take long for the competition to ready its NFT offerings to snatch some market share from OpenSea.

In this article, we will delve into FTX’s NFT marketplace that went live on October 11. In addition, we will also quickly go through Coinbase’s intentions of launching its own NFT marketplace to snatch a piece of the current NFT frenzy.

FTX NFTs – Enabling Access to NFTs for Retail

On October 11, leading cryptocurrency derivatives trading platform FTX’s US-based offshoot, FTX US announced the launch of FTX NFTs, a marketplace that allows the exchange’s users to mint, trade, and store NFTs without any hassle.

According to the announcement, the FTX NFT marketplace will initially support Solana-based NFTs while support for NFTs minted on other blockchains such as Ethereum, Avalanche, Terra, and others is expected to be introduced in the coming months.

It is worthy of note that as of now, only FTX US customers can use the newly launched NFT marketplace. However, this should not be a major issue for users as both US and non-US residents can sign up for an FTX US account.

FTX launching an NFT marketplace is significant because it caters to Solana-based NFTs that are vastly cheaper and convenient to mint and trade compared to their Ethereum-based counterparts.

Commenting on the launch, Brett Harrison, president of FTX.US, noted that the exchange is committed to offering “simpler, safer, and easier tools” for mainstream users to trade NFTs on the exchange.

Harrison added that,

“The NFT ecosystem has started to infiltrate pop culture, but has been lacking a platform that provides easy access and exposure to the mainstream audience.”

How Will the Marketplace Work?

The FTX NFT marketplace will allow users to seamlessly purchase and sell NFTs via SOL coins in their wallets. Accordingly, the same method can be used to purchase different types of NFTs based on the blockchain they are minted on.

Besides using their crypto wallets to purchase NFTs, users will be able to buy NFTs through bank transfers, wire transfers, and credit cards. Notably, the prices for the newly minted NFTs will be denominated in SOL, ETH, and USD.

While FTX will not charge any listing fee on NFTs, it will, however, charge 2% fee on all NFT sales.

An important point to highlight is that the exchange will not list any NFT collection that promises to pay royalties or makes periodic payments to its holders, indicating that it is well aware of regulators classifying NFTs as securities.

In fact, unimpressed by the FTX decision to not list any of the aforementioned types of NFTs, a popular NFT collection on Solana called the Meerkat Millionaires Country Club decided against getting themselves listed on the FTX marketplace. This is because the project regularly pays royalties to NFT holders in the form of SOL.

Regardless of the regulatory debacle, it will be interesting to see how FTX NFT marketplace’s launch impacts OpenSea which has enjoyed a firm grip over the global NFT market until now.

Interestingly enough, just a few days after FTX’s announcement, leading crypto exchange Coinbase also announced its intentions to enter the NFT space, making the novel landscape of digital assets more competitive.

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