Where NFTs Are Taking Us and What’s Coming Next
The future of NFTs will depend on the integration of the existing technology with other systems and expanding its utility across industries.
The security of NFTs and related services will have to improve. Users will also need further education on best practices for keeping themselves safe.
The NFT use cases we’ve seen develop over the past few years can give us a taste of what to expect. However, no one can say for certain what the next big use case will be.
The NFT space has already come a long way in a short time. Yet, this is just the beginning, and we’ve only scratched the surface of what this asset class can become.
We’re Entering a New Stage of NFT Development
NFTs have undoubtedly given us a new way to perceive and value digital uniqueness. Fourteen years ago, at Bitcoin’s birth, the idea of cryptographically secured, tokenized, non-fungible assets was only a dream.
In a sense, we’re already experiencing the future now. The pace at which non-fungible tokens developed has been rapid. It’s easy to forget that NFTs are still in their nascency, and we have much more to look forward to regarding NFT innovation and use cases.
Currently, NFTs are synonymous with several specific segments of the crypto space. In the public mind, we’re looking at gaming, art, fashion, and other creative industries. But, of course, it would be unwise to think that the technology will stop there.
With more Web2 companies looking to apply NFT technology to their verticals and industries, it’s only a matter of time before we see even more integrations. Surely, not all will succeed, but attempts will be made to test the NFT waters. It is a pivotal time for non-fungible tokens and their further mainstream adoption.
“This experimentation with new NFT integrations will help us go a long way in a relatively short time. I’m excited, to say the least.”
What will drive NFTs’ future success? We need to look at the infrastructure. We need to uphold security standards and protect users. We also need to educate people and create innovative use cases. There’s no secret recipe, as all components are fairly well known. We can all achieve it together with a joint effort, from Web2 companies to digital asset exchanges, users, and builders.
How We’ve Got to Where We Are Today
Before we start future-gazing too much, let’s take a look at where we are now. When it comes to NFTs, we’re looking at a roughly ten-year-old technology. Fifteen at a push if you count the proto-NFT Colored Coins project built on Bitcoin.
For what most people would recognize as fully-functional NFTs, 2014’s Quantum on the Namecoin blockchain would probably suffice. Its creators, Anil Dash and Kevin McCoy, referred to their creation as “monetized graphics.” Why? Well, the term NFT hadn’t yet come into existence. We need to go to late 2017 and early 2018 with CryptoKitties and the release of the ERC-721 standard on Ethereum for that.
The story since then is pretty well known. As for Binance’s NFT journey, it all started with the launch of the Binance NFT Marketplace on June 24, 2021. Since then, we’ve expanded from a simple marketplace to a multi-chain hub for NFT creators, collectors, and brands. Below are some things that make us stand out.
Collaborations: CR7, Franck Muller, Jimmy Choo, Mike Tyson, Alan Walker, and many more.
Features: Liquidity Aggregator – integration of marketplaces like OpenSea, with more to come – and NFTFi staking.
Multi-chain functionality: BNB Smart Chain, Ethereum, and Polygon.
Now, on to the future. Let’s cover our first point, infrastructure, and how we can work with it to achieve a brighter NFT future.
Where Our Future Focus Lies
Likely, a key part of our successful NFT future lies in offering seamless, integrated experiences every step of the way. If we can combine various facets of the NFT ecosystem into a user-friendly platform with competitive fees, users will end up winning big. For example, we can take already existing blockchains, markets, and services, then look at how they fit best together.
Here at Binance NFT, our ambition is to build an NFT infrastructure for the future. Key to this is certain user benefits that we already support and continue to improve:
One-click, seamless experience.
Easy token conversions that facilitate quicker and simpler NFT transactions.
Low and affordable fees (for example, our 1% platform service fee for trading NFTs).
Improved liquidity for buyers, sellers, and NFT services.
Access to NFT analytics.
Simple fiat on and off-ramps.
Highly secure products and services that users have confidence in.
All these benefits and improvements are essential to a brighter NFT future. How we achieve them, however, can vary depending on how NFT technology progresses. Two of the newer exciting methods we’re implementing are multi-chain opportunities and liquidity aggregation. Both look extremely promising for the future development of the NFT space.
One of the best things we can do to promote the interconnectedness of the NFT space is to empower users to operate across multiple chains. Each network has its own unique community and popular NFT collections.
“To help bring about this goal, we’ve already implemented multi-chain functionality to the Binance NFT Marketplace.”
By enabling multi-chain functionality, we eliminate the need for our users to swap networks manually as they would have to do with a decentralized solution. No more fiddly RPC nodes to copy in or native tokens to buy to pay gas fees!
One great example of multichain implementation is our Bitcoin NFT support. Binance NFT Marketplace will support trading for Bitcoin Ordinals (NFTs) in the near future, expanding the platform’s ecosystem.
Bitcoin Ordinals allow unique and immutable NFTs to be created via Taproot and SegWit upgrades. Each individual Satoshi that makes up a BTC can be identified and transacted with extra data attached. The additional data can include images, text, videos, or other content added to each satoshi through inscription.
By offering Bitcoin NFTs, we provide users with:
Unparalleled ease in purchasing and trading directly from their Binance accounts — thereby eliminating the need for a separate Ordinals wallet.
The protection of Binance's exceptional security and stability.
Beyond the multichain capacity, we think that various popular NFT marketplaces are ripe for integration, which ultimately benefits users. For one, Binance NFT allows you to access OpenSea using your Binance account. The integration offers some key benefits to users:
One-stop access to NFTs listed on Binance NFT (Ethereum and BNB Smart Chain) and OpenSea (Ethereum) with low fees for cross-platform purchases.
Upgraded metrics and data visualization for NFT collections and individual NFT pages to enhance price analysis.
Integration of OpenSea marketplace data to leaderboards on Binance NFT’s Stats page.
Such integrations allow us to provide users with access to a broader range of collections, accurate information, and lower fees. This, to us, looks like the future that the NFT world should be moving towards.
The NFT Future Looks Secure and Better Educated
Keeping user assets SAFU isn’t just a top priority for Binance. It’s a priority for the ecosystem, its users, and developers who want to grow digital assets’ adoption and utility across the board. While crypto is still a young industry, many users of fungible tokens are already well-versed in safety practices. NFTs, on the other hand, have brought in a new wave of users who aren’t always as savvy when it comes to security.
“For the NFT ecosystem to thrive, we must ensure security is a priority when expanding into new areas and integrating with more platforms.”
To strengthen this key area of operations, we are bent on constantly evolving security and safety measures and policies with users’ interests top of mind. Let’s quickly look at the major lines of work that any NFT platform must take care of:
Developing good security practices.
Protecting inexperienced users.
Removing bad actors from the platform.
Protecting user deposits.
In the case of Binance NFT, working within a framework of a centralized exchange removes some of the “low-hanging fruit” safety issues that are especially relevant for newcomers. Specifically, at Binance NFT:
There are no seed phrases to deal with or tricky wallet management practices.
There’s no connecting to DApps that may drain your wallet.
We help vet reported listings to ensure users don’t become victims of a scam.
You can access security product features, including account limits, anti-phishing codes, facial verification for withdrawing NFTs, and 2FA.
We’re proud to say that the coverage by Binance’s SAFU fund, worth $1 billion, extends to the users of our NFT platform. NFTs deposited in the Binance NFT Marketplace can be covered by the SAFU fund for any losses incurred due to a hack. This helps bring even more peace of mind to NFT users in our ecosystem.
“We may see more users in the future getting a softer entry point to the NFT world via centralized exchanges like Binance.”
Overall, the infrastructure we use to access NFTs and other Web3 services will probably become more intuitive. It’s something we’re working hard on at Binance NFT. This looks to be a general trend in crypto as a whole, where user experience has already improved greatly over time.
Getting education up to speed
Let’s move to a core non-technical ingredient of user safety: education. There’s a lot to learn before one can safely traverse the NFT universe. You need to learn the nuts and bolts of wallet management skills and develop a sharp scam-detecting sense, among many other Web3 skills. The decentralized blockchain ecosystem is fantastic for many reasons, and users should explore it. But, before one can get there, it’s best to learn the ropes – and there is no better place for that than a centralized NFT platform with robust security.
To build a safe future, we need more easily accessible educational opportunities for the NFT world. There are already existing resources like Binance Academy and a wealth of free content from independent sources. However, we’re still quite far away from the coverage that’s offered in the fungible realm.
So, what does the future look like for NFT education?
Mainstream learning opportunities for NFT technology.
Greater uptake and participation in the free resources already available.
Advancing a more mature view of NFTs to combat the “get-rich-quick via JPEG” mentality that is still quite widespread.
Educational opportunities for Web2 companies, developers, and leaders to advance NFT implementation.
The list above isn’t by any means exhaustive. Yet, these points point to the right direction of where the NFT industry should be moving.
Gazing Into the NFT Future
By now, we’re almost all familiar with the typical “creative” use cases for NFTs: video games, collectibles, digital art, digital land, etc. But what else can we expect in the future? The best way to look ahead is to examine the emerging use cases and where they could lead.
Great work is already underway in the entertainment, staking, ticketing, and DeFi sectors. Digital identities represented by personal NFTs also look promising. Let’s briefly look at some of the possibilities on offer now and where they can lead us in the future.
For some time, once you had your NFT, you could only do a limited number of things with it. You could trade it, perhaps. Use it in a game. It could also gather digital dust sitting in your wallet to be sold later.
However, more recently, we’ve seen several new financial uses for NFTs emerge. NFT staking is already available on Binance with competitive costs and interest rates, and NFT loans are to be introduced soon. The width and breadth of what NFT finance (NFTFi) can offer are huge, and it’s an exciting area that isn’t pigeonholed into one single NFT vertical.
First, what do we mean by NFT staking? Let’s quickly define it.
“NFT staking allows a holder/collector to earn extra rewards from NFT assets in their portfolio. By depositing their NFT with a service provider or smart contract, the holder can earn new tokens, services, or other benefits.”
Let’s look at the Binance NFT Marketplace to get a feeling for what’s on offer.
Since December 2022, Binance has offered its Ape Staking product for holders of the widely popular Bored Ape Yacht Club collection. Anyone holding a Bored Ape Yacht Club (BAYC) or Mutant Ape Yacht Club (MAYC) NFT can stake it on Binance to earn daily rewards in ApeCoin (APE). The mechanism is simple, but it’s still a lot more than what you could do with the NFTs upon their release.
“The key point here? Extra utility is being added to NFTs. In this case, we’ve seen a DAO implement the feature, but there’s no reason why it couldn’t be an external project or even an exchange.”
Binance’s Ape Staking model also differs slightly from the original ApeDAO product and offers some unique key benefits. Specifically, it is:
User-friendly. You can stake right from your Binance account with customer support available whenever you need it. You can start staking with just a single click.
Free of gas fees. You won’t need to pay fees to stake or unstake once your asset is in your Binance wallet.
Flexible. There is no fixed term for staking, and you are not required to hold APE to take part.
Competitive rewards that accrue daily.
Binance also offers The Sandbox NFT staking and is currently the only third party to do so. LAND NFTs can be staked on the Polygon network to earn daily rewards. The Sandbox NFT Staking Program offers Flexible Term subscriptions, and users aren’t required to hold SAND tokens to stake their LAND NFTs. Again, it’s an area where we’ve seen staking potential and now offer to our ecosystem of users.
It doesn’t take much imagination to see the potential of NFT staking. Tokens staked as collateral for loans could become more common. You could gain participation rights to a new airdrop, sale, or service. These are just a few simple examples, and we’ll have to see where the future takes us.
Crypto lending is already well-established, with users providing crypto collateral in return for a loan. This system helps to unlock the liquidity of relatively illiquid assets that are staked. NFT loans, too, make for a potentially attractive use case and a welcome development in digital finance.
In the near future, Binance NFT will begin to offer NFT loans to its users. We are looking to build on current offerings and provide a new experience with familiar benefits:
A user-friendly experience when securing a loan.
Instant NFT-collateralized loans to bring instant liquidity to blue-chip NFT holders.
A service that leverages Binance’s overall security.
Zero gas fees.
Low interest rates.
The DeFi space is already seeing experiments with NFT loans. We hope, however, that by offering the product via a centralized exchange, we can help bring crypto loans to the mainstream. Centralized platforms are uniquely placed to run a peer-to-pool model, often providing lower costs than a peer-to-peer one. The CEX model also brings about the benefits outlined above with regard to our NFT loans product.
For many users, the first interaction with new digital asset services occurs through a CEX. That’s why CEX-powered NFTFi will be a hugely important component of the NFT space’s future.
NFTs in the entertainment industry
It seems almost certain that NFTs will continue to find novel use cases in the entertainment and fashion industries. Already, celebrities have leveraged NFTs to better connect with their fans. NFTs have also been tied to exclusive content, including music records, branded items, and signed photos. Let’s look at a few examples:
Music: The “Alan Walker Origins” NFT collection featuring three high-production-value music videos from Alan Walker’s “Origins” album.
Luxury brands: “Mystery by Franck Muller” NFT holders can unlock exclusive utilities, which include physical Franck Muller timepieces, Apple Watch faces, wearable NFT watches for metaverses, and access to Franck Muller’s private events in Dubai, Miami, and Singapore.
Sports: Cristiano Ronaldo’s CR7 NFTs that offer holders exclusive utilities, including virtual greetings from the football legend himself, automatic whitelisting for all future CR7 collections, a free CR7 Mystery Box, and other rewards.
These are the areas where NFTs have already firmly established themselves, so we’re sure to see further innovation here. Perhaps we’ll see NFTs used to track the authenticity of real-world designer items, for example.
“There will hopefully be a greater acceptance of NFTs within these industries as we move away from these tokens being seen as “gimmicks.”
Another use case gaining traction is NFT ticketing. Traditional systems are notorious for being slow, expensive, and often unfair to fans. NFTs offer a digital solution with easy authentication and control over unscrupulous secondary market ticket sellers.
While this application of NFTs hasn’t reached the mainstream yet, we’ve already seen the first steps:
NFT ticket souvenirs for The Weeknd’s After Hours Til Dawn tour in partnership with Binance. These offered a digital, timeless alternative to saving a perishable ticket.
POAP (Proof of Attendance Protocol) NFTs for the attendees of the Primavera Sound 2022 festival. These provided a richer festival experience with perks at the venue and the opportunity for some holders to get a free ticket for the next festival.
NFT tickets for S.S. Lazio matches that provide exclusive Stadio Olimpico access to home games in the 2022/23 season, plus a range of discounts.
In the future, expect to see complete end-to-end NFT ticketing solutions. We won’t just be dealing with souvenirs here, but actual, on-chain tickets. The technology’s supposed complexity can be off-putting, so creating a slick user experience could be key.
The Recipe Is Clear for an Innovative NFT Future
The path to the future starts today. It’s clear from the emerging use cases and efforts that the general trends of the NFT industry’s development are these:
Integrating infrastructure to bring builders and services together.
Building safer applications and advancing best practices to protect users.
Educating the world about NFTs and promoting their reputation globally.
Developing new, innovative use cases that bring real utility to users.
There is no crystal ball that will tell us what the next big NFT application will be. But what we do know is how to pave the way for it and others that will follow. I’m proud that our NFT work at Binance follows the roadmap above. It’s not just us alone doing it, though. There’s a sprawling NFT community that is busy doing the same, and there’s a place in it reserved for you, too.
NOTE: This is a general announcement. Products and services referred to here may not be available in your region.