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The future of NFTs depends on the integration of modern technologies with other systems and the possibility of their application in different industries.
It will be necessary to strengthen the protection of NFT tokens and related services. Users should be aware of best security measures and practices.
By assessing the experience with NFTs over the past few years, we can predict future trends. However, it is impossible to determine with certainty in which direction development will take place.
NFT technology has come a long way in a short time. However, this is just the beginning: we are only seeing the tip of the iceberg. It will take time to understand the essence and capabilities of this type of asset.
We are at a new stage of NFT development
NFT tokens have given us a new understanding of the essence and benefits of digital uniqueness. Fourteen years ago, when Bitcoin first appeared, the concept of cryptographic tokenized non-fungible assets seemed utopian.
In a sense, the future has already arrived. Looking at how quickly the NFT space is evolving, it can hardly be said that non-fungible tokens are a recent development. And we have yet to discover new solutions and applications for this type of asset.
Today, many people associate NFTs with cryptocurrency. Gaming, art, fashion and other creative industries come to mind. But it would be naive to think that the development of technology will be limited to this.
Companies from the Web2 segment are increasingly mastering NFT technology, trying to implement it within the organization and in the industry as a whole. Over time, this trend will only grow. Of course, this experience will not always be successful, but many will try NFTs. Non-fungible tokens are a very promising technology, and now is the time for its active development.
“Integrating our systems with NFT platforms will allow us to achieve amazing results in a short time. This is amazing".
What does it take to further develop NFTs? We must prepare the infrastructure, improve security standards and ensure user protection. It is also important to educate people and suggest new use cases. There is no secret recipe; all the ingredients are known. We can develop NFTs through joint efforts: Web2 companies, digital exchanges, developers and users.
How we got to where we are today
Before we make plans for the future, let's remember the path we have traveled. NFT technology is no more than ten years old, fifteen at most if you take into account the Bitcoin-based colored coins that became the prototype of NFTs.
Most people became aware of non-fungible tokens (NFTs) in 2014 with the introduction of Quantum on the Namecoin blockchain. Its creators, Anil Daesh and Kevin McCoy, called their project “monetized graphics.” Why? The fact is that the term NFT did not yet exist. And to answer this question, we need to go back to the end of 2017 - beginning of 2018, when the game CryptoKitties appeared and the ERC-721 standard was created on Ethereum.
The rest of the story is known to everyone. NFT tokens on Binance came into existence on June 24, 2021, when the Binance NFT marketplace launched. During this time, we have gone from a simple online platform to a multi-chain hub for NFT creators, collectors and brands. Let's list our main achievements.
Collaborations: CR7, Franck Muller, Jimmy Choo, Mike Tyson, Alan Walker and many others.
Features: Liquidity aggregator - integration of marketplaces (like OpenSea, etc.) - and NFTFi staking.
Multichain support: BNB Smart Chain, Ethereum and Polygon.
Now let's talk about the future. Our first point is infrastructure. How can it be improved to ensure a breakthrough in NFT technology?
Priority elements of development
For the successful development of NFTs, it is important to ensure smooth operation and integrated services at all stages. By combining the various capabilities of the NFT ecosystem into one convenient platform with competitive fees, users will reap huge benefits. For example, we can evaluate existing blockchain systems, markets and services and try to understand how best to use them together.
Binance NFT is committed to building the NFT infrastructure for the future. The most important condition for this is the benefits for users that we already provide and will continue to improve:
Ease of use and lack of complex operations.
Easy token conversion for speed and ease of NFT transactions.
Low fees (we charge only 1% for NFT trading).
High liquidity for buyers, sellers and NFT services.
Access to NFT analytics.
Simple mechanisms for buying and selling cryptocurrency for fiat.
Safe products and services that users trust.
All of these benefits and opportunities are important for the future of the NFT industry. However, their implementation depends on the direction in which NFT technology will develop. Today we are introducing two advanced processes: multi-chain and liquidity aggregation. They open up exciting prospects for the development of the NFT environment.
Multichain support
The best thing we can do to increase interconnectedness in the NFT ecosystem is to give users the ability to work on different blockchains. Each network has its own unique community and popular NFT collections.
“To achieve this goal, the Binance NFT platform has implemented multi-chain support.”
By giving users access to different blockchains, we eliminate the need for them to switch between networks, as happens in decentralized systems. You no longer need to copy data to RPC nodes or buy native tokens to pay gas fees.
One example of multichain implementation is support for Bitcoin NFTs. In the near future, Bitcoin ordinals (Bitcoin NFTs) will be available for trading on the Binance NFT marketplace, which will expand the platform’s ecosystem.
Bitcoin ordinals enable the creation of unique and immutable NFT tokens through code updates - Taproot and SegWit. The protocol allows each individual Satoshi (BTC) to be identified and sent along with additional data: images, text, video or other content. During this process, an ordinal “inscription” is added. A Satoshi with an inscription is called an ordinal.
Thanks to Bitcoin NFT support, users receive the following benefits:
Easily buy and trade directly from your Binance accounts without the need to create a separate ordinal wallet.
Exceptional security and stability of Binance.
Marketplace Aggregation
In addition to multichain, users will receive additional benefits from the integration of various platforms. We see that many popular NFT marketplaces are ready for this. For example, Binance NFT users can switch from their Binance account to the OpenSea platform. The main benefits that integration provides:
Centralized access to NFT tokens listed on Binance NFT (Ethereum and BNB Smart Chain) and OpenSea (Ethereum), with low cross-platform transaction fees.
Improved metrics and data visualization of NFT collections and individual NFT pages for more effective price analysis.
Adding data from the OpenSea marketplace to the leaderboards on the Binance NFT statistics page.
Thanks to this integration, users get more choice: collections, accurate information and favorable commissions. In our opinion, this is the direction in which the NFT industry should develop.
The future of NFTs is security and awareness.
Maintaining a Safe Asset Fund for Users (SAFU) is not only one of Binance's top priorities. It is also the mission of the entire ecosystem, its users and developers who want to promote mass adoption of digital assets. And although the cryptocurrency industry is relatively young, many users of fungible tokens have already mastered basic security methods. In the NFT industry, things are still different: many users do not always know the basics of security.
“To successfully develop the NFT ecosystem, it is necessary to make security a key aspect when expanding and integrating with new platforms.”
To improve this most important indicator of our activities, we are constantly improving our protection measures and security policies, focusing on the interests of users. Let's briefly look at the main areas of work that each NFT platform should implement:
Development of effective security methods.
Protection for novice users.
Removing violators from the platform.
Protection of user deposits.
In the case of centralized exchanges, which include Binance NFT, there are some obvious security risks, particularly those associated with newcomers. So, Binance NFT is characterized by the following:
No seed phrases or complex wallet management processes.
Lack of connection with decentralized applications through which fraudsters can steal funds from wallets.
Verifying reported listings is how we protect users from abusers.
Access to product security features including account limits, anti-phishing codes, facial recognition for NFT withdrawals, and two-factor authentication (2FA).
We're proud that Binance's $1 billion SAFU Fund is also available to Binance NFT users. It provides protection for deposits in NFT tokens in case of hacker attacks. Knowing this, users of our ecosystem trust us even more.
“Over time, centralized exchanges like Binance will attract more users and introduce them to the NFT ecosystem.”
Overall, the infrastructure used to access NFT tokens and other Web3 services should become clearer and more user-friendly. This is exactly what we are working on now. This trend applies to the entire crypto industry, not just Binance NFTs, and during this time, all workflows and interfaces have become much simpler.
Training and awareness
Let's move on to the main aspect of security that is not related to technical solutions - knowledge. To feel comfortable and safe in the NFT environment, users need to learn a lot. They need to master the skills of working with Web3 services, as well as learn how to use wallets and identify scammers. The decentralized blockchain ecosystem offers many exciting opportunities that users should explore. However, before moving on to them, it is important to understand the basics. And for this, a centralized NFT platform with reliable security methods is the best choice.
To ensure future safety, we must use clearer and more accessible educational resources on the topic of NFTs. We have Binance Academy and a lot of free material from independent sources, but it's very limited compared to what you can find about fungible tokens.
So how should users be trained to navigate the NFT environment?
Essential educational resources on NFT technology.
Greater reach and active participation in free sources that already exist.
Promoting NFTs as a more complex technology and refuting the popular misconception that it is just a get rich quick scheme using JPEG images.
Educational resources on implementing NFT solutions for companies, developers and industry leaders Web2.
This list can be expanded. But it contains the main theses that should be followed for the development of the NFT industry.
A look into the future of NFTs
Today, we are well aware of the standard uses for NFT tokens: video games, collectibles, digital art, digital space, etc. But how else might this technology manifest itself in the future? To answer this question, it is best to analyze existing use cases and their prospects.
NFTs have been successfully used in entertainment, staking, ticketing, and DeFi. Digital identity using personal NFT tokens also has great potential. Let's look at some of the opportunities that exist today and try to assess their prospects.
NFTFi
At one time, we were accustomed to thinking that NFT tokens were intended strictly for specific purposes. For example, you could trade them, use them in a game, or even use them to collect digital dust in your wallet to sell later.
However, recently NFT tokens have begun to be used in the financial sector. Binance already offers NFT staking with competitive fees and interest rates, and NFT loans will be added soon. The prospects for the development of the NFTFi industry, created at the intersection of decentralized finance and NFTs, are enormous. This is a promising area that is not limited to just NFT technology.
NFT staking
First, let's understand what NFT staking is.
“NFT staking allows the holder or collector of NFT assets to earn additional rewards. By listing NFTs on specialized platforms or entering into smart contracts, the owner can receive new tokens, services and other benefits.”
So, let's take a look at what the Binance NFT marketplace is like and find out what opportunities there are.
In December 2022, Binance introduced its Ape staking product for token holders from the popular Bored Ape Yacht Club collection. Owners of Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) NFT tokens can stake their NFTs on the Binance platform and receive daily rewards in ApeCoin (APE). The mechanism is very simple, but over time, NFT tokens have had many more use cases than immediately after the product was released.
“What conclusion can we draw? There are more opportunities for using NFT tokens. In this case, the implementation was carried out by a decentralized autonomous organization (DAO), but it could just as well have been an external project or even an exchange.”
Binance's proposed Ape staking model is slightly different from the original ApeDAO product and has several unique advantages, namely:
Convenience for users. You can stake tokens directly from your Binance account, if necessary, contact support for help. You can start staking with one click.
No gas fees. There are no fees to start or stop staking if the asset is already in your Binance wallet.
Flexible terms. There is no time limit for staking, and you do not need to have APE tokens to participate.
Rewards every day.
Binance also supports NFT Sandbox staking and is the only platform offering such a service today. Users can stake LAND NFT tokens on the Polygon network and receive daily rewards. The NFT Sandbox staking program offers fixed-term subscriptions, and users can stake NFT LAND tokens without owning SAND tokens. As we have already said, this is a very promising area for staking, and our users can appreciate its possibilities.
The potential of NFT staking is obvious. Tokens added to staking can be used as collateral for loans. You can receive rights to participate in a new airdrop, sale or service. These are just a few simple examples, and later we will find out what awaits us next.
NFT loans
Crypto lending is already a fairly common practice where users provide cryptocurrency as collateral when receiving a loan. This system provides liquidity to relatively illiquid assets being staked. NFT loans are another promising area and positive trend in digital finance.
In the near future, Binance NFT will offer an NFT lending service to its users. We want to create a cutting-edge solution while maintaining the list of features and benefits offered:
Simple and convenient loan application process.
Instant loans with NFTs as collateral - fast liquidity for holders of NFT tokens from flagship collections.
A service with the best Binance security technologies.
Zero gas fees.
Low interest rates.
There is already some experience in the field of decentralized finance using NFT loans. However, we hope that by offering crypto lending through a centralized exchange, we will bring it to the mass level. Such platforms are based on the P2Pool model, which has lower costs compared to peer-to-peer architecture. Additionally, centralized exchanges provide the benefits listed above for NFT lending.
For many users, their first encounter with digital asset services occurs on a centralized exchange. That is why NFTFi based on this model will determine the direction of development of the NFT environment.
NFTs in the entertainment industry
Most likely, NFT tokens will continue to offer us new use cases in the entertainment and fashion sectors. Many stars actively use this technology to communicate with their fans. NFT tokens are also associated with exclusive content, including music recordings, branded merchandise and signed photographs. Let's look at a few examples:
Music. An Alan Walker Origins NFT collection featuring three high-quality music videos from Alan Walker's Origins album.
Luxury brands. Holders of the Franck Muller NFT Mystery get access to exclusive features including Franck Muller watches, Apple Watch screensavers, Metaverse NFT watches, and invitations to private Franck Muller events in Dubai, Miami and Singapore.
Sport. NFT collection of Cristiano Ronaldo CR7, giving holders unique benefits, such as personal virtual congratulations from the football legend, automatic inclusion in the waitlist for all subsequent CR7 collections, a free CR7 mystery box and other bonuses.
These are areas in which NFT technology has already gained a strong position, and further innovation is sure to await us here. Who knows, we might see NFTs that allow us to verify the authenticity of designer items.
“Hopefully, as the practical benefits of NFT tokens are understood, they will be used more actively in these industries.”
NFT tickets
This is another area of application of NFT technology. Traditional systems are notorious for being slow, inflating prices, and not taking the fans' best interests into account. NFT is a digital solution with a simple authentication mechanism and control over unscrupulous ticket resellers.
And although this area has not yet gained mass popularity, we are already seeing the first steps in this direction:
Gift NFT concert tickets for The Weeknd's After Hours Til Dawn tour in collaboration with Binance. This is a digital alternative to physical tickets. NFT tickets do not need to be stored and are not time-bound.
Proof of Attendance based NFT tickets for Primavera Sound Festival 2022 attendees, with additional on-site rewards, some including the chance to win a free ticket to the next festival.
NFT tickets for SS Lazio home matches and exclusive access to the Stadio Olimpico stadium for games of the 2022/23 season, as well as various discounts.
The future will see comprehensive solutions for NFT tickets. These will not just be digital gifts, but full-fledged on-chain tickets. The technology may seem overwhelming, so it is important to create a user-friendly interface to implement it.
The secret to a successful NFT future is simple
The future begins today. By assessing existing use cases and processes, we can determine the general trends in the development of the NFT industry:
Infrastructure integration to connect developers and services.
Create safer use cases and implement best practices to protect users.
Raising awareness of NFT technology and its benefits internationally.
Developing new, cutting-edge applications that provide real benefits to users.
No one can predict exactly what's next for the NFT industry. But we know what is needed for its successful development and dissemination. And I am happy to know that our work with NFTs is progressing in accordance with our plans and trends. This is not only the merit of Binance. We have a large NFT community that helps grow the industry, and there's always a place for you here.
NOTE. This is a general announcement. Products and services mentioned herein may not be available in your region.
Additional Information
NFT Authentication: Fighting Counterfeiting and Fraud
Common NFT Scams and Safety Tips 2022
NFT Security: Protecting Your Digital Collections