We have seen the rise of Ethereum, Layer 2s and Solana NFTs, but we have not heard much about Binance NFTs. So what are they, and is there something being built under the hood?

This article digs into the Binance NFT ecosystem to uncover the engine churning behind the scenes.

• Background

  • Background on Binance

  • What is an NFT?

• Binance NFT

  • Mission

  • History of Binance NFTs

  • Analytics

  • Comparison of Marketplaces

  • Notable collections

  • Differentiating Factor

• Future Trajectory

• Closing Remarks (TL;DR)

Before we dive into Binance NFTs, it’s important to set the background of Binance so as to have some context on the potential for the wider ecosystem.

i) Timeline

• Binance was founded in Feb ‘17 by CEO Changpeng Zhao (CZ), who has strong experience in high frequency trading and crypto wallet development from:

  • Having founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers.

  • Having joined Blockchain.info in 2013 as the third member of the cryptocurrency wallet team.

• July ‘17 Binance launched the BNB token.

• Sep ‘19 Binance launched its own stablecoin, BUSD.

• In March ‘20, Binance acquired CoinMarketCap. Rumors are that the acquisition cost $400 million.

• In Feb ‘22, Binance took a $200 million stake in Forbes.

So we can see the company has acquired significant stakes in communication outlets with liquidity from funding obtained from its token launch and revenue from high trading volume on its exchanges.

Its founder has strong experience in high frequency trading and crypto wallet development. Is it a coincidence that CZ has invested $500m in Twitter, and Elon has halted production of the prior crypto wallet development?

Let’s have a look at the scale of the conglomerate.

ii) Company Valuation

In Jan ‘18 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion. Its BNB price was roughly $8 on Jan 1, ‘18.

As of Nov 22, ‘22 the Binance market cap is $41 billion.

Binance is a behemoth in the crypto market. While its size is significant, it is dwarfed by many of the traditional tech giants such as Apple, Google and Tesla:

iii) Crypto Exchange Benchmark

Binance is the largest crypto currency exchange by market capitalization and volume. It had close to 10x the volume compared to FTX, just before FTX collapsed.

Its now performing at 7x the daily volume of Coinbase.

Coinbase has a market capitalization of $10 billion as at November 22, 2022. That’s a quarter of the Binance market cap.

Now that we’ve looked at Binance in the context of the wider crypto ecosystem, let’s dig into NFTs.

NFTs have huge potential and a diverse range of possible use cases. But the biggest industry predicted to benefit is the gaming industry.

Many Venture Capital funds are poised to back the NFT gaming sector. Some useful articles for background reference:

• What is an NFT?

• Venture Capital Funding in the NFT Sector.

It’s estimated that there has been $7.4 billion funding from VCs in the NFT space as at Q1 2022.

• Gaming (39%)

• Collectibles (20%)

• Entertainment (10%)

• Marketplaces (10%)

• Metaverse (3%)

• Art (2%)

• Infrastructure (1%)

So how does this link to Binance NFTs?

Binance envisions its NFT segment of the business to “build the gaming metaverse.” With Steam having delisted all blockchain games, Binance built a new home for NFT games and gamers via their Initial Game Offering (IGO).  Most gaming collectibles are low-value high-volume digital assets, such as in-game skins.

Binance has dominated the fungible crypto sector with a wide variety of token offerings, low trading fees, and an easy to use platform. Given their success, why not follow the same approach for NFTs?

• Offer a seamless transition into crypto and NFTs at scale to encourage adoption.

• Create a launchpad for games. Coin it IGO (Initial Gaming Offering).

• Maintain low trading fees on the platform to encourage fluid trading and liquidity.

Execute this well and Binance NFTs could capitalize on the gaming niche in the NFT market. Let’s take a look at the history and performance of Binance NFTs.

• Binance NFT marketplace and Mystery Boxes launched in June ‘21.

• Multi-chain support was added in Oct ‘21 (Ethereum + BNB), including the ability to store NFTs from decentralized wallets to the Binance NFT custody wallet.

Binance NFTs launched in the middle of the 2021 NFT boom. But air dropping a significant number of low-value assets to its users didn’t appeal to those who were already trading Ethereum NFTs.

There hasn’t been too much in the way of infrastructure development or striking innovation announced specifically for NFTs within the Binance ecosystem. There have been numerous high-profile partnerships to raise awareness, but sticky products are lacking in the space.

In the information age, consumer attention is pulled in multiple directions, so if a product fails to captivate an audience, then people move on.

In gaming this is even more prevalent. Overlaying a web2 gaming lens, we know 70% of Indie games on Steam failed to make enough money to justify a second product.

Binance has the funding, so it's reasonable to assume that their IGO platform will launch some successful, self-sustaining games.

Let’s take a look at the volume on these gaming NFT collections to date.

There has been approximately $3.5m of trading volume on Binance in the past 30 days. This is approximately 1% of the Opensea ($311m) and 5% of Magic Eden ($64m) trading volume. To caveat, these figures have not been adjusted for wash trading.

Binance NFT performance comes in at 15/16th spot with Element and Mobox:

According to Dapp Radar, Mobox holds the top spot for volume on Binance over the past 30 days, with $1.7m USD, which constitutes 50% of the total Binance NFT market share. This is a total of 3k traders with an average NFT price of $50.

Element came second place, with $0.7m of Binance NFT volume (the remaining $0.7m for Element is on Ethereum, Polygon and Avalanche).

Comparatively, Solana has maintained a reasonable amount of  volume across a greater number of collections. Partly driven by recent hyped projects, like Y00ts revealing and the Instagram integration.

Ethereum, and its L2s, continue to dominate chain volume with VC-backed collections reaching astronomical valuations, and generative art collections pumping from speculative investors and art collectors, respectively.

So while there is some volume within the Binance NFT ecosystem, it is a fraction of the volume seen on Ethereum and Solana. Nonetheless, getting up-skilled on the ecosystem before the volume comes in is how to get ahead of the curve.

Seeing the potential for Binance to inject some of its brain trust into building and executing an effective market is within CZ’s capabilities,especially given the company’s financial position.

As an observation, Mobox 30 day volume makes up a third of the Axie Infinity gaming volume over the same period. Axie has faced many recent challenges with sustaining its ecosystem, but it's arguably been successful in achieving adoption on a large scale, which it can then build from. If Mobox is a third of the way, then it has a reasonable number of users to build from, too; whether and how the team executes on this will come down to Binance’s capabilities and the market’s receptivity to their offerings.

1) IGO Collections

IGOs (Initial Game Offering) are NFTs from gaming projects available exclusively on Binance NFT.

The assets can launch either via auction, fixed price, or mystery boxes. IGOs are purely for gaming and all drop content will consist of in-game assets such as early-access passes, weapons and items, exclusive Binance cosmetics, and skins. As a comparison, games exclusive to Binance would be akin to Halo or Gears of War on XBOX, back in the console days.

Example games being launched include Heroes of Mavia, which is a play-to-earn MMO Strategy game developed by Skrice Studios.

The Command & Conquer style game takes place in a fantasy-themed island called Mavia, where players build bases on plots of land and battle neighboring bases and armies to earn in-game resources, such as Mavia’s P2E cryptocurrency RUBY.

2) Mobox

Mobox is an NFT-powered gaming platform/ecosystem that combines yield farming and NFT farming.

The platform adopts both F2P and P2E mechanics. Ultimately, Mobox strives to bring more engaging usage scenarios for NFT and DeFi technology by introducing a virtual world called MOMOverse. The project boasts the following unverified statistics:

While these statistics differ slightly from Dapp Radar, they give a reasonable estimate of the scale of these high volume low value Metaverse NFTs.

The $MOBOX was launched on April 6, ‘21 and is valued at a $50m market capitalization. 20% of the supply is allocated to the team, 8% to strategic partnerships, and 21% to marketing, with the following token unlock schedule:

These tokens can be staked for in-game liquidity with BNB. The withdrawal fees are tiered depending on how long the token is staked:

There are several games that have been built on the Mobox platform using its incubator, for instance:

• Block Brawler is a strategy RPG where a player can battle against a computer (PVE).

• Token Master allows you to play and advance your NFT character MOMO to earn rewards.

• Trade Action is a F2P game where a player can be paid out in MBOX tokens if he manages to get onto the leaderboard.

3) My Neighbour Alice

This game takes inspiration from Animal Crossing and Minecraft and is a Chromia and Ethereum-based gaming platform.

The project has been in development for years, with its token$ALICE pricing the market cap at around $54m USD. Binance launched the token on its platform in March ‘21, and since then there has been some contentious community criticism over project delays or vague roadmap timelines.

It is worth noting that Crypto Twitter can be an impatient place with many NFT holders being unaware of the amount of work required to launch a fully functional game.

4) Element

Element’s mission is to build the largest economy in the virtual world of the Metaverse, and advocate for property rights in the virtual world.

5) Baby Swap

A baby metaverse decentralized finance protocol that prides itself in going beyond being an AMM, NFT and game launchpad (IGO).

6) Pancake Squad & Bunnies

Pancake Squad and Bunnies are Pancake Swap’s native NFT collections. Bunnies are earned by completing tasks and winning competitions. Pancake Swap is one of the most popular DEX on Binance Smart Chain with over $4.5 billion in total value locked.

Other NFTs

Binance appear to have taken the traditional marketing / influencer route in getting people’s attention. For instance, celebrities like Christiano Ronaldo and Alan Walker have collaborated with Binance NFTs to launch celebrity editions of digital collectibles for fans.

The blockchain gaming on the IGO and wider Binance platform is relatively nascent. The difference in the quality of gaming from your typical web2 games is significant, with a large gap to bridge before players will migrate to web3 games. But this is not to say it won’t happen as technology advances, user interfaces and experiences improve.

So what are the differentiating factors for Binance NFTs?

So what is the advantage of trading NFTs on the BNB marketplace?

Similar to their fungible token trading platform, they offer extremely low fees on NFT trading at only 1%, which tends to outperform most other marketplaces. It’s a similar strategy Binance used to get market share from Coinbase back in the 2017 ICO bubble.

Binance already has 30 million customers using their fungible token platform. These customers can use the same fungible crypto wallet to buy and sell NFTs on the Binance marketplace. Similar to the recent Reddit vault, this enables a web2.5 style wallet that could on-board the masses.

To put this into perspective, there were only 52k daily ‘Unique Active Wallets’ (UAW) trading NFTs on Opensea at the height of the NFT bull market in Jan ‘22.

There have only ever been 90k BNB NFTs traded from any single collection (Pancake Bunnies). That’s 0.3% exposure of the existing Binance customer base.

All Binance users can use their existing accounts and Binance wallets to trade on Binance NFT Marketplace—with no extra steps required. This approach to digital assets/ collectibles from Reddit created 3 million new unique wallets.

Sorare is also adopting this approach that enables the option to create a self custody wallet or use a typical web2 wallet, with the ability to move the NFT to a third part self custody wallet when desired. It uses RAMP, Moonpay or an Ethereum wallet connecting option to add funds:

These approaches to acquiring new customers will appeal to the larger untapped audience not yet in web3.

i) Concerns over Centralization

Binance is a centralized crypto exchange that launched its own token, BNB, on its own smart chain (Binance Smart Chain or “BSC”). It prides itself on low fees and rapid transaction times, which largely comes at the cost of decentralization or security. There are concerns over the security of the chain given the lack of decentralization. There have been instances where the chain has been halted due to an exploit, which suggests they are able to control all the nodes in the network and hence become a risk to security.

ii) Regulation

Binance has been the subject of several regulatory inquiries. Whereas rival exchanges FTX and Coinbase adopt a more regulatory friendly approach to compliance, particularly within the US. The current position could change with respect to tokens being deemed securities or views on how Binance structures its global operations that could adversely impact the Binance NFT ecosystem.

iii) Execution Risk

Binance is a large company, bordering on a conglomerate now that it has expanded beyond crypto by making significant investments in media companies. There are potentially more lucrative elements of the business that resources have been allocated to, although this could change. Until the NFT portion of the business is given sufficient resources and human capital, then it will lag behind those specialist marketplaces or blockchains that put NFTs at the forefront of its mission.

iv) Not Your Keys Not Your Crypto

We’ve touched on the centralization aspect of crypto and its risks. If Binance were to go under, could the Binance Smart Chain continue independently? If not, then there is an existential threat to Binance NFTs.

v) Key Competition

Binance has identified a niche in the NFT market with gaming and the metaverse. There are, however, other specialist marketplaces that also use this as its focus:

• Gamestop Marketplace

• $Magic Ecosystem (Arbitrum)

• Solana Gaming

• Metaverse ecosystems such as Otherside, Meta and Sandbox

These are to name a few, but unless sufficient resources are allocated to Binance NFT ecosystem, then it will always lag behind its competitors in terms of innovation and adoption.

vi) Public Perception

NFTs are generally perceived by the public to be a scam. It’s unsurprising when you see the CEOs of large crypto companies on the run, taunting authorities from their Twitter account. Once the relevant infrastructure and consumer protections are implemented, then this stigma could be shaken, although it will take time. Educational content, similar to this OriginsNFT article, will be necessary in educating and driving public awareness.

There isn’t much to go on with correspondence from CZ on NFTs. However, we can see there is speculation in the space around the integration of NFTs within Twitter and the funding from CZ to help Elon’s acquisition of the social media platform.

https://twitter.com/NFT_GOD/status/1586712626100322305?s=20&t=RN7k3UEc_v5XqD7ra_T3Cg

In fact, there is a new Binance index named “Bluebird.” Any connection to the Twitter symbol? It’s a cryptocurrency price index launched in Nov ‘22 that tracks the performance of BNB, DOGE, and MASK. Elon has continued to comment on DOGE including using it as a potential payment option on Twitter.

Could we see Binance BNB, DOGE, and NFT integration into Twitter? Could CZ be using his crypto expertise to build the crypto wallets and functionality for the platform? Speculation at this point, but it’s possible.

• It’s clear Binance NFTs are focused on gaming. It’s unsurprising given many VC funds share the same sentiment with most of their funding going into the NFT gaming ecosystem.

• The Binance Smart Chain is fast and cost efficient, lending itself to gaming which requires low latency.

• The 30 million Binance customers within the fungible token market provides a good target market for onboarding a significant audience into NFTs.

• Most existing Binance NFTs are reasonably nascent games and gameFi projects that wouldn’t necessarily take market share from current web2 games. However, as the platform and chain innovates, markets could capture the attention of a wider audience. There are only currently 30k daily active traders on Ethereum; there is huge potential for onboarding a significant number of participants into the space.

• Binance uses the same wallet for fungible tokens as for NFTs, providing the 30 million users with a familiar interface that should help a seamless transition. As incentives are optimized, this could be a huge catalyst similar to what we have seen with Reddit and Sorare.

• Binance has invested $500m into the Twitter acquisition. It’s not for nothing.

  • CZ’s experience is in high frequency trading and crypto wallet development seems like a logical partnership with huge potential.

  • Twitter is known to be implementing NFTs with its prior attempts of Hexagon NFTs and Tweet Tiles. But empowering content creators with an embedded payment mechanism and rallying a community around an NFT project has huge potential.

Binance NFT marketplace and its games may not stand out in their current form. But the company has the financial position, strong partnerships, and vision to cause a paradigm shift that could result in the onboarding of millions into NFTs.

The Binance NFT ecosystem is one to watch — after all, Reddit turned around with significant volume from its Avatars, much of which came from a community that has been anti-NFTs and -crypto. Binance has a user base of 30 million people who have dabbled in crypto; they are only one rabbit hole away from unearthing the non-fungible alternative ecosystem.

At OriginsNFT we leverage data-driven decision making, educational resources, and proprietary analytics to remain ahead of the curve with respect to blockchain tech and specifically NFTs. To find out more, please visit our website or Twitter.

To purchase a pass, please visit our Opensea page.

We have seen the rise of Ethereum, Layer 2s and Solana NFTs, but we have not heard much about Binance NFTs. So what are they, and is there something being built under the hood?

This article digs into the Binance NFT ecosystem to uncover the engine churning behind the scenes.

• Background

  • Background on Binance

  • What is an NFT?

• Binance NFT

  • Mission

  • History of Binance NFTs

  • Analytics

  • Comparison of Marketplaces

  • Notable collections

  • Differentiating Factor

• Future Trajectory

• Closing Remarks (TL;DR)

Before we dive into Binance NFTs, it’s important to set the background of Binance so as to have some context on the potential for the wider ecosystem.

i) Timeline

• Binance was founded in Feb ‘17 by CEO Changpeng Zhao (CZ), who has strong experience in high frequency trading and crypto wallet development from:

  • Having founded Fusion Systems in 2005 in Shanghai; the company built high-frequency trading systems for stockbrokers.

  • Having joined Blockchain.info in 2013 as the third member of the cryptocurrency wallet team.

• July ‘17 Binance launched the BNB token.

• Sep ‘19 Binance launched its own stablecoin, BUSD.

• In March ‘20, Binance acquired CoinMarketCap. Rumors are that the acquisition cost $400 million.

• In Feb ‘22, Binance took a $200 million stake in Forbes.

So we can see the company has acquired significant stakes in communication outlets with liquidity from funding obtained from its token launch and revenue from high trading volume on its exchanges.

Its founder has strong experience in high frequency trading and crypto wallet development. Is it a coincidence that CZ has invested $500m in Twitter, and Elon has halted production of the prior crypto wallet development?

Let’s have a look at the scale of the conglomerate.

ii) Company Valuation

In Jan ‘18 it was the largest cryptocurrency exchange with a market capitalization of $1.3 billion. Its BNB price was roughly $8 on Jan 1, ‘18.

As of Nov 22, ‘22 the Binance market cap is $41 billion.

Binance is a behemoth in the crypto market. While its size is significant, it is dwarfed by many of the traditional tech giants such as Apple, Google and Tesla:

iii) Crypto Exchange Benchmark

Binance is the largest crypto currency exchange by market capitalization and volume. It had close to 10x the volume compared to FTX, just before FTX collapsed.

Its now performing at 7x the daily volume of Coinbase.

Coinbase has a market capitalization of $10 billion as at November 22, 2022. That’s a quarter of the Binance market cap.

Now that we’ve looked at Binance in the context of the wider crypto ecosystem, let’s dig into NFTs.

NFTs have huge potential and a diverse range of possible use cases. But the biggest industry predicted to benefit is the gaming industry.

Many Venture Capital funds are poised to back the NFT gaming sector. Some useful articles for background reference:

• What is an NFT?

• Venture Capital Funding in the NFT Sector.

It’s estimated that there has been $7.4 billion funding from VCs in the NFT space as at Q1 2022.

• Gaming (39%)

• Collectibles (20%)

• Entertainment (10%)

• Marketplaces (10%)

• Metaverse (3%)

• Art (2%)

• Infrastructure (1%)

So how does this link to Binance NFTs?

Binance envisions its NFT segment of the business to “build the gaming metaverse.” With Steam having delisted all blockchain games, Binance built a new home for NFT games and gamers via their Initial Game Offering (IGO).  Most gaming collectibles are low-value high-volume digital assets, such as in-game skins.

Binance has dominated the fungible crypto sector with a wide variety of token offerings, low trading fees, and an easy to use platform. Given their success, why not follow the same approach for NFTs?

• Offer a seamless transition into crypto and NFTs at scale to encourage adoption.

• Create a launchpad for games. Coin it IGO (Initial Gaming Offering).

• Maintain low trading fees on the platform to encourage fluid trading and liquidity.

Execute this well and Binance NFTs could capitalize on the gaming niche in the NFT market. Let’s take a look at the history and performance of Binance NFTs.

• Binance NFT marketplace and Mystery Boxes launched in June ‘21.

• Multi-chain support was added in Oct ‘21 (Ethereum + BNB), including the ability to store NFTs from decentralized wallets to the Binance NFT custody wallet.

Binance NFTs launched in the middle of the 2021 NFT boom. But air dropping a significant number of low-value assets to its users didn’t appeal to those who were already trading Ethereum NFTs.

There hasn’t been too much in the way of infrastructure development or striking innovation announced specifically for NFTs within the Binance ecosystem. There have been numerous high-profile partnerships to raise awareness, but sticky products are lacking in the space.

In the information age, consumer attention is pulled in multiple directions, so if a product fails to captivate an audience, then people move on.

In gaming this is even more prevalent. Overlaying a web2 gaming lens, we know 70% of Indie games on Steam failed to make enough money to justify a second product.

Binance has the funding, so it's reasonable to assume that their IGO platform will launch some successful, self-sustaining games.

Let’s take a look at the volume on these gaming NFT collections to date.

There has been approximately $3.5m of trading volume on Binance in the past 30 days. This is approximately 1% of the Opensea ($311m) and 5% of Magic Eden ($64m) trading volume. To caveat, these figures have not been adjusted for wash trading.

Binance NFT performance comes in at 15/16th spot with Element and Mobox:

According to Dapp Radar, Mobox holds the top spot for volume on Binance over the past 30 days, with $1.7m USD, which constitutes 50% of the total Binance NFT market share. This is a total of 3k traders with an average NFT price of $50.

Element came second place, with $0.7m of Binance NFT volume (the remaining $0.7m for Element is on Ethereum, Polygon and Avalanche).

Comparatively, Solana has maintained a reasonable amount of  volume across a greater number of collections. Partly driven by recent hyped projects, like Y00ts revealing and the Instagram integration.

Ethereum, and its L2s, continue to dominate chain volume with VC-backed collections reaching astronomical valuations, and generative art collections pumping from speculative investors and art collectors, respectively.

So while there is some volume within the Binance NFT ecosystem, it is a fraction of the volume seen on Ethereum and Solana. Nonetheless, getting up-skilled on the ecosystem before the volume comes in is how to get ahead of the curve.

Seeing the potential for Binance to inject some of its brain trust into building and executing an effective market is within CZ’s capabilities,especially given the company’s financial position.

As an observation, Mobox 30 day volume makes up a third of the Axie Infinity gaming volume over the same period. Axie has faced many recent challenges with sustaining its ecosystem, but it's arguably been successful in achieving adoption on a large scale, which it can then build from. If Mobox is a third of the way, then it has a reasonable number of users to build from, too; whether and how the team executes on this will come down to Binance’s capabilities and the market’s receptivity to their offerings.

1) IGO Collections

IGOs (Initial Game Offering) are NFTs from gaming projects available exclusively on Binance NFT.

The assets can launch either via auction, fixed price, or mystery boxes. IGOs are purely for gaming and all drop content will consist of in-game assets such as early-access passes, weapons and items, exclusive Binance cosmetics, and skins. As a comparison, games exclusive to Binance would be akin to Halo or Gears of War on XBOX, back in the console days.

Example games being launched include Heroes of Mavia, which is a play-to-earn MMO Strategy game developed by Skrice Studios.

The Command & Conquer style game takes place in a fantasy-themed island called Mavia, where players build bases on plots of land and battle neighboring bases and armies to earn in-game resources, such as Mavia’s P2E cryptocurrency RUBY.

2) Mobox

Mobox is an NFT-powered gaming platform/ecosystem that combines yield farming and NFT farming.

The platform adopts both F2P and P2E mechanics. Ultimately, Mobox strives to bring more engaging usage scenarios for NFT and DeFi technology by introducing a virtual world called MOMOverse. The project boasts the following unverified statistics:

While these statistics differ slightly from Dapp Radar, they give a reasonable estimate of the scale of these high volume low value Metaverse NFTs.

The $MOBOX was launched on April 6, ‘21 and is valued at a $50m market capitalization. 20% of the supply is allocated to the team, 8% to strategic partnerships, and 21% to marketing, with the following token unlock schedule:

These tokens can be staked for in-game liquidity with BNB. The withdrawal fees are tiered depending on how long the token is staked:

There are several games that have been built on the Mobox platform using its incubator, for instance:

• Block Brawler is a strategy RPG where a player can battle against a computer (PVE).

• Token Master allows you to play and advance your NFT character MOMO to earn rewards.

• Trade Action is a F2P game where a player can be paid out in MBOX tokens if he manages to get onto the leaderboard.

3) My Neighbour Alice

This game takes inspiration from Animal Crossing and Minecraft and is a Chromia and Ethereum-based gaming platform.

The project has been in development for years, with its token$ALICE pricing the market cap at around $54m USD. Binance launched the token on its platform in March ‘21, and since then there has been some contentious community criticism over project delays or vague roadmap timelines.

It is worth noting that Crypto Twitter can be an impatient place with many NFT holders being unaware of the amount of work required to launch a fully functional game.

4) Element

Element’s mission is to build the largest economy in the virtual world of the Metaverse, and advocate for property rights in the virtual world.

5) Baby Swap

A baby metaverse decentralized finance protocol that prides itself in going beyond being an AMM, NFT and game launchpad (IGO).

6) Pancake Squad & Bunnies

Pancake Squad and Bunnies are Pancake Swap’s native NFT collections. Bunnies are earned by completing tasks and winning competitions. Pancake Swap is one of the most popular DEX on Binance Smart Chain with over $4.5 billion in total value locked.

Other NFTs

Binance appear to have taken the traditional marketing / influencer route in getting people’s attention. For instance, celebrities like Christiano Ronaldo and Alan Walker have collaborated with Binance NFTs to launch celebrity editions of digital collectibles for fans.

The blockchain gaming on the IGO and wider Binance platform is relatively nascent. The difference in the quality of gaming from your typical web2 games is significant, with a large gap to bridge before players will migrate to web3 games. But this is not to say it won’t happen as technology advances, user interfaces and experiences improve.

So what are the differentiating factors for Binance NFTs?

So what is the advantage of trading NFTs on the BNB marketplace?

Similar to their fungible token trading platform, they offer extremely low fees on NFT trading at only 1%, which tends to outperform most other marketplaces. It’s a similar strategy Binance used to get market share from Coinbase back in the 2017 ICO bubble.

Binance already has 30 million customers using their fungible token platform. These customers can use the same fungible crypto wallet to buy and sell NFTs on the Binance marketplace. Similar to the recent Reddit vault, this enables a web2.5 style wallet that could on-board the masses.

To put this into perspective, there were only 52k daily ‘Unique Active Wallets’ (UAW) trading NFTs on Opensea at the height of the NFT bull market in Jan ‘22.

There have only ever been 90k BNB NFTs traded from any single collection (Pancake Bunnies). That’s 0.3% exposure of the existing Binance customer base.

All Binance users can use their existing accounts and Binance wallets to trade on Binance NFT Marketplace—with no extra steps required. This approach to digital assets/ collectibles from Reddit created 3 million new unique wallets.

Sorare is also adopting this approach that enables the option to create a self custody wallet or use a typical web2 wallet, with the ability to move the NFT to a third part self custody wallet when desired. It uses RAMP, Moonpay or an Ethereum wallet connecting option to add funds:

These approaches to acquiring new customers will appeal to the larger untapped audience not yet in web3.

i) Concerns over Centralization

Binance is a centralized crypto exchange that launched its own token, BNB, on its own smart chain (Binance Smart Chain or “BSC”). It prides itself on low fees and rapid transaction times, which largely comes at the cost of decentralization or security. There are concerns over the security of the chain given the lack of decentralization. There have been instances where the chain has been halted due to an exploit, which suggests they are able to control all the nodes in the network and hence become a risk to security.

ii) Regulation

Binance has been the subject of several regulatory inquiries. Whereas rival exchanges FTX and Coinbase adopt a more regulatory friendly approach to compliance, particularly within the US. The current position could change with respect to tokens being deemed securities or views on how Binance structures its global operations that could adversely impact the Binance NFT ecosystem.

iii) Execution Risk

Binance is a large company, bordering on a conglomerate now that it has expanded beyond crypto by making significant investments in media companies. There are potentially more lucrative elements of the business that resources have been allocated to, although this could change. Until the NFT portion of the business is given sufficient resources and human capital, then it will lag behind those specialist marketplaces or blockchains that put NFTs at the forefront of its mission.

iv) Not Your Keys Not Your Crypto

We’ve touched on the centralization aspect of crypto and its risks. If Binance were to go under, could the Binance Smart Chain continue independently? If not, then there is an existential threat to Binance NFTs.

v) Key Competition

Binance has identified a niche in the NFT market with gaming and the metaverse. There are, however, other specialist marketplaces that also use this as its focus:

• Gamestop Marketplace

• $Magic Ecosystem (Arbitrum)

• Solana Gaming

• Metaverse ecosystems such as Otherside, Meta and Sandbox

These are to name a few, but unless sufficient resources are allocated to Binance NFT ecosystem, then it will always lag behind its competitors in terms of innovation and adoption.

vi) Public Perception

NFTs are generally perceived by the public to be a scam. It’s unsurprising when you see the CEOs of large crypto companies on the run, taunting authorities from their Twitter account. Once the relevant infrastructure and consumer protections are implemented, then this stigma could be shaken, although it will take time. Educational content, similar to this OriginsNFT article, will be necessary in educating and driving public awareness.

There isn’t much to go on with correspondence from CZ on NFTs. However, we can see there is speculation in the space around the integration of NFTs within Twitter and the funding from CZ to help Elon’s acquisition of the social media platform.

https://twitter.com/NFT_GOD/status/1586712626100322305?s=20&t=RN7k3UEc_v5XqD7ra_T3Cg

In fact, there is a new Binance index named “Bluebird.” Any connection to the Twitter symbol? It’s a cryptocurrency price index launched in Nov ‘22 that tracks the performance of BNB, DOGE, and MASK. Elon has continued to comment on DOGE including using it as a potential payment option on Twitter.

Could we see Binance BNB, DOGE, and NFT integration into Twitter? Could CZ be using his crypto expertise to build the crypto wallets and functionality for the platform? Speculation at this point, but it’s possible.

• It’s clear Binance NFTs are focused on gaming. It’s unsurprising given many VC funds share the same sentiment with most of their funding going into the NFT gaming ecosystem.

• The Binance Smart Chain is fast and cost efficient, lending itself to gaming which requires low latency.

• The 30 million Binance customers within the fungible token market provides a good target market for onboarding a significant audience into NFTs.

• Most existing Binance NFTs are reasonably nascent games and gameFi projects that wouldn’t necessarily take market share from current web2 games. However, as the platform and chain innovates, markets could capture the attention of a wider audience. There are only currently 30k daily active traders on Ethereum; there is huge potential for onboarding a significant number of participants into the space.

• Binance uses the same wallet for fungible tokens as for NFTs, providing the 30 million users with a familiar interface that should help a seamless transition. As incentives are optimized, this could be a huge catalyst similar to what we have seen with Reddit and Sorare.

• Binance has invested $500m into the Twitter acquisition. It’s not for nothing.

  • CZ’s experience is in high frequency trading and crypto wallet development seems like a logical partnership with huge potential.

  • Twitter is known to be implementing NFTs with its prior attempts of Hexagon NFTs and Tweet Tiles. But empowering content creators with an embedded payment mechanism and rallying a community around an NFT project has huge potential.

Binance NFT marketplace and its games may not stand out in their current form. But the company has the financial position, strong partnerships, and vision to cause a paradigm shift that could result in the onboarding of millions into NFTs.

The Binance NFT ecosystem is one to watch — after all, Reddit turned around with significant volume from its Avatars, much of which came from a community that has been anti-NFTs and -crypto. Binance has a user base of 30 million people who have dabbled in crypto; they are only one rabbit hole away from unearthing the non-fungible alternative ecosystem.

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