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NFT Binance – a new way to sell, buy and earn

At the end of the first quarter of 2021 alone, NFT turnover exceeded $2 billion, 130 times the same period in 2020. But what is it, why are sales of these assets growing at such a rate, who can get involved, and where?

NFT – the new masters money

NFT is “non-fungible token”, which can be translated as “non-interchangeable token”. The closest, more or less similar counterpart from the world of traditional finance is securities, because NFT also secures to the user the right to own digital content posted on the Internet and purchased by that user. The content can be anything that can be digitized and uploaded to the Internet – pictures, video, audio and so on. The value of such content is unpredictable – almost from zero to tens of millions of dollars. A work can start out at a couple of tens of dollars, but end up selling for nearly 70 million, like a painting by digital artist Mike Winkelman.

From the point of view of various artists and creators who only worked in the digital format, especially artists, NFT is a revolutionary invention. Because until then, digital artists were not considered artists at all, or rather, no one particularly knew about them. People who make a living drawing pictures for the Internet projects are called designers and work for a particular order. It’s practically impossible to sell a digital picture that has no commercial value, at least in the form of a logo. Or, at any rate, it’s too cheap to make money on it. NFT showed that the art of digital artists is in demand and makes it possible to fulfill the dream of any artist – to earn money while creating. Sometimes earning millions.

NFT is a crypto-asset, but not cryptocurrencyIt can’t be immediately withdrawn into fiat after receiving it. It is an art object that has been verified, programmed in code and included in the blockchain. Thus, the art object becomes the digital property of its owner. It can now be sold. You don’t need an agent to sell content, you don’t need to negotiate with a gallery if the seller is an artist. It is enough to upload the work to an exchange and put it up for auction. Strictly speaking, it is not necessary to upload any outstanding work to the exchange. If you manage to sell a random photo of your favorite cat in this way, the commercial benefit can be the same as that of a work of art.

Any asset can be tokenized. Blockchain is currently the strongest copyright protection system. The asset cannot be copied or reproduced for free. The process of creating a non-interchangeable token is called “mining. Putting the token up for auction will require a certain investment from the author of the content. Content is sold repeatedly; practically, the content author earns income from the work as long as it is bought. The NFT token cannot technically be destroyed or replaced with another token, the blockchain protects individual digital property so securely that an item registered in the blockchain becomes as unique as a collectible.

The most famous example is the NBA, which, using non-interchangeable token technology, sells recordings of game moments that become the unique property of basketball fans. Non-interchangeable tokenization is necessary for unique content, because, of course, one content cannot be identical to another, they are too different in quality and relevance.

How Binance NFT works

Binance NFT custodial marketplace (what is it?) is a marketplace for digital artwork and collectibles for authors and crypto-enthusiasts. Crypto Exchange Binance (go online) promises “the highest liquidity for launching and trading NFT. NFT is structured into 3 product lines: marketplace, events, and mystery boxes.

Marketplace – the main section, where tokens are created, sold/bought, and users participate in auctions. In the Events section, you can buy NFT companies, famous authors, brands, celebrities. In Mystery Boxes you can win a random token, a regular (N), rare (R), super rare (SR) or even rarer (SSR) NFT – after buying a token, of course, you can sell or trade a closed Mystery Box. Any user can create, buy/sell NFT on Binance, the algorithm is as follows:

Register your account – on the NFT page you need to click on “Register” and go to the form. Registration is possible via e-mail or phone number, and you also need to generate a complex password. It is very desirable to remember, and preferably write down the password, so as not to make a mistake when you enter it – the exchange often has problems with the restoration of a forgotten password. Registration by phone at the exchange is not possible in every country. It is desirable to get acquainted with the “Terms of Service”, but they are in English and do not say anything about NFT. But in any case you have to agree with them to continue registration.

After completing the form, you need to click “Create Account”, pass a primitive captcha, get an access code from the exchange, and use it to go to the welcome page. If the code is not received, which is not uncommon on Binance, you need to request a new code and check your spam email. Here you can learn information on how to conduct various transactions on the cryptocurrency exchange or go straight to your account by following the appropriate link. In the account, the exchange immediately offers increased security through the activation of two-factor authentication (2FA), confirmation by phone and Google code. This can be ignored, but it is not worth it, especially if you are going to work with large sums.

When registering an account to participate in NFT, the exchange insists on identity verification. To do this, you need to go to the “Security” section in your account in the left list of options and select the section “Verification”. At this stage you may be asked to confirm the country of residence – this is quite an important point, because the conditions of the exchange, depending on the country may be different.

Verification can be corporate, standard and extended “Verification PLUS”. Standard verification allows depositing and withdrawing fiat currency equivalent to 50 thousand dollars daily, withdrawing 100 bitcoins daily, P2P transactions are unlimited. Having chosen the type of verification, you should click “Begin” and go through the procedure according to the suggested sequence of actions. During the verification you can change the data on country and region of residence, which must correspond to the data in the ID card. A passport or a driver’s license is allowed as an identity document – the choice of document is offered depending on the country of residence of the new user.

You need to take a photo of the ID according to the instructions (some documents need to be photographed on both sides). Then the photo is loaded into the form and after that you need to take selfies. The next step is the “face check” – so when taking selfies, you need to make sure the room is bright, you also need to take off your glasses, hat, you cannot take selfies through filters or edit the photo in any way. To complete the test, you can click “Finish” or use the QR code.

It is important to know that you should not refresh your browser while your documents and photos are being checked, so it is better not to do anything on your computer during this time. Identity confirmation does not happen immediately – the exchange will send a notification when it is ready. But you can try to register more than once – 10 attempts per day are available, but, if the tenth time the exchanger does not confirm the registration, you have to wait a day and redo the process. It is desirable to do everything accurately, without errors, as Binance does not verify new users very easily, you have to wait. Failures during verification are possible and are likely to happen, but you need to stay calm and keep trying.

After convincing the exchange that you are you, you can start transactions on Binance NFT. The turnover here is in BNB, BUSD or ETH. Accordingly, if you do not have these cryptocurrencies, you need to buy them – on the same exchange or start from your wallet. But you should know that tokens are created on the exchange on its own blockchain – Binance Smart Chain. Therefore, if the user wants to create his own NFT, he needs the exchange’s internal cryptocurrency – BNB. From his wallet outside the exchange, the cryptocurrency is deposited into the spot wallet of the Binance account. You can put fiat into the spot wallet from your bank account. After verification of the account, you can buy cryptocurrency. This can be done with a bank card, or from other users – there is also a service for this on Binance. Buying cryptocurrency in the P2P format implies that there are already assets in the spot wallet. After replenishing the wallet you can go directly to the trading on the marketplace Binance NFT.

NFTs are traded in an auction format or at a fixed price. But in either case, a commission will have to be paid when buying NFTs. Authors of NFTs, as well as users who have placed on the exchange NFTs created on other services, receive 1% royalties for each transaction with NFTs. Tokens are placed on the marketplace page, it is not very convenient, but there is a search function and filter.

A few words about what tokens are on the exchange. In total, they are categorized into 8 categories: Premium, Art, Sports, Entertainment, Games, Collectibles, Cybersports, NFT for Good Deeds. The file types in the marketplace are Images, Videos, Audio. So far, the filter is almost useless, most likely because NFT is still a very new section, specific, the audience is small, tokens for some parameters of the filter just do not exist. So, having somehow selected the token you like, you need to click on it. The user is taken to a page with a detailed description of the token. If the data is correct and the token is sold through an auction, you should bid by clicking on the appropriate button and writing your bid in the drop-down form. The bid must be higher than the previous bid by at least 1 point. After entering the bid you need to confirm it. Buying NFT at a fixed price is similar, but the token can be bought immediately, for this click the “Buy” button. You can also offer your price to the author, – the seller receives the offer and can reject it or accept and complete the transaction.

On the balance must be enough money to buy, if the money is not enough, the exchange will offer to replenish the balance of the spot wallet. You must be very careful when buying at the auction: you cannot withdraw a bid already made, the funds are blocked until the next bid by another buyer or until the end of the auction.

Creating an NFT on the exchange is as easy as possible – click “Create” on the main page of the Binance NFT Marketplace, upload your outstanding creation, enter the details of a non-interchangeable token according to the instructions, choose whether it will be a single token or a series-collection of tokens, make sure that the wallet on the exchange has enough BNB to pay the fee for the NFT issue, and confirm token creation. You can create a single NFT token or a series of tokens with unique identifiers for each token. All created tokens are placed in the “My NFTs” section. But not only created tokens can be there, but also bought and downloaded from third-party resources. There is a fee of 0.005 BNB for issuing NFT tokens. You have to create the NFT-token very carefully – when the fee is paid, the service will begin to formulate the code, it is impossible to stop this process. What got into the blockchain – you can neither delete nor modify. However, the exchange indicates that it is possible to create a new NFT – for the same file.

NFT can be sold either at a fixed price or in an auction, with royalties received by the author on both his tokens created on Binance and those downloaded from third-party sources. Before selling, you should determine the type and duration of the auction. You need to go to the “My NFT” page, select a ready token, click “Set up NFT” and enter the parameters of the sale. In the “Listing Settings”, you must specify the type of NFT sale: auction at the “Maximum Bid” or as part of a regular sale at the “Fixed Price”. In the “Maximum Bid” auction, the minimum bid (the amount at which the auction starts) and the cryptocurrency payment are set first. The auction period is then set. For a fixed-price sale, respectively, the “Set Price” button is clicked, the NFT value and the cryptocurrency for payment are set. There is also a deadline for the fixed price – no more than 7 days from the start of the listing.

To sell, of course, you must describe the NFT, providing as much useful information as possible for potential buyers. When describing, again, you need to be very careful – you can’t correct the description of your token or a token from a third-party resource after the token has been released. When everything is ready for sale, the NFT is checked manually by the Binance moderators, and if everything is good, the NFT will be uploaded to the marketplace, for sale in a few hours. It is possible to request a certain period of verification, but not the fact that the team will meet it, then the token will be uploaded as soon as possible.

Mystery-boxing is the purchase of an unknown token, which may turn out to be exclusive and very expensive. For transactions with NFT surprises, you need to go to the corresponding section.

In the Mystery Box section, the token is accompanied by a certain description, the price and the number of tokens available for purchase at a fixed price. The user selects the number of tokens and clicks the “Buy” button. In the “Details” window of the order the buyer confirms the purchase and completes the purchase. Only after the purchase has been made can the new token holder see what they have received. If desired, the token can be offered for sale.

Prices and purses

When buying, and even more so when selling, the question may arise, how to value a token? This is really not an easy question, and the exchange explains that there are three key factors to consider when valuing a token:

  • rare;
  • utility;
  • tangibility.

An additional factor is time of ownership, short-term or long-term. Rarity is a factor that shows how exclusive a particular NFT is. A token by a famous artist or released by some celebrity will be the most expensive. It can also be a game object that gives significant advantages in games. The usefulness of an NFT is determined by how realistically the token can be applied in the virtual world or even in the real world. Some objects can be used in games, but tokens can also be tickets to real-world sporting events, for example.

Significance is how important the tokenized object is, in this context a ticket to an event is likely to be more significant than a funny 2D picture, so the ticket will cost more. But this is a very contingent factor – no one needs an overdue ticket anymore, and the value of the pictures can grow, along with the fame of the artist. Here an additional factor comes into play – the tenure of the NFT. In this case, the token can be seen as a way to invest.

By the way, since non-interchangeable tokens are registered in the BSC blockchain, it is possible to track the value and its dynamics through the service Bscscan – here are the statistics of NFT turnover. To get information on a particular token, you need to copy the contract address of the token and enter the search service and you will see the price, the sender and recipient addresses of the token. NFTs, while specific, are generally standard tokens and can be stored in cryptocurrency wallets, not just on the NFT platform. Since non-interchangeable tokens are registered in different blockchains, you need to make sure that the wallet supports the specific NFT token. The most common tokens are ERC-721 and ERC-1155 (Ethereum) and BEP-721, BEP-1155 (Binance Smart Chain). By the way, wallets such as MetaMask, Trust Wallet and MathWallet are suitable for most tokens.

How Featured by Binance Works

The Featured by Binance service also provides NFT turnover, but it is not a custodial platform. In this type of trading, the exchange provides only technical token trading capabilities, while the transactions themselves are performed directly between the participants in the transaction. The advantage of the non-custodial service is that transactions are anonymous, no verification is required.

The service is available in English only. Featured by Binance has Exclusives, Browse and Create sections. The Exclusives section features unique Formula E tokens, a new game, a Formula E blockchain racing strategy that uses NFTs. Virtual cars are offered as non-interchangeable tokens.

In the “Browse” section you can find a token just by browsing the endless page of them or find the desired token through the search bar or select tokens by specific parameters – by type of token, price, date of upload to the service. On the right side there is a search, it changes the order in which the tokens are placed on the page, for example by price or by the recommendation of the service itself. The order of buying/selling on Featured by Binance is pretty much the same as on Binance NFT, there is an option to buy and sell at once or at auction. To create a token you will first have to connect to the wallet – the button in the upper right corner. There is also a blog on Featured by Binance which contains articles about NFT projects hosted on the platform.

Benefits of NFT

In theory, crypto-enthusiasts see NFT as the coming future – blockchain as the ideal technology for copyright protection. If you can protect pictures with blockchain, you can also protect any meaningful information at all, such as real estate property documents and so on. These property rights can also be sold, but by direct negotiation with the buyer, without the interference of retailers with their wild commissions.

Indeed, one of the advantages of NFT tokens is that the author can sell his content directly, without intermediaries. But in fact, this is not the case: the blockchain in which the token is registered does not belong to the author. In order to access the sale, the author must put his or her work on a platform. To do so, you have to register on it, follow the rules, and at some point, a commission is bound to be charged for selling the content. There are a lot of platforms already, not only Binance. A platform is an intermediary that provides technical opportunities for selling content.

The freedom of NFT creativity is not 100%-y either – at least on custodial sites there are checkers who moderate the content and decide whether it can be sold or not. Right now NFT is in demand from collectors, gamers (tokenizing in-game values), creators of all sorts – artists, musicians, architects. NFT is out of the experimental stage and it’s already a serious development, so even big companies are taking advantage of tokens – the Times Magazine sold old covers by encoding them into tokens, The New York Times just sold an entire column through NFT. Along with serious digital stuff on the Internet, as you might expect, all sorts of funny digital things like memes, just funny visual developments sell well – one short animated clip of a cat flying through the sky sold for half a million dollars.

The main advantage of NFT-tokens is their democratic nature and easy access to monetization of their work: anyone can make something digital, obtain copyrights, sell interesting content, and get paid for it. It is also important that the posted content can constantly grow in value. But don’t overestimate the democratic nature of it either – though non-swappable tokens have been around for a short time, but it is already noticeable that the biggest money is made by those who were making good money on content before NFT. And whether users will pay for the creations of a random, unknown artist – it’s not a fact, but the important thing is that the artist, and just anyone who wants – got a new, interesting and potentially profitable opportunity to promote their content and earn on it.

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