Understanding NFTs: A Look at the NFT Ecosystem in 2022 by@gabrielmanga

Understanding NFTs: A Look at the NFT Ecosystem in 2022

Non-fungible tokens (NFTs) are gaining popularity as the crypto industry continues to grow. Tokenization of assets, including works of art, in-game items, collectibles, and even music, is now possible thanks to their development. These tokens are stored on the blockchain, meaning that the record of ownership cannot be altered, and no new NFTs can be created by copying and pasting existing ones. The market value of these tokens, like the cryptocurrency on which they are based, can be volatile.
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Gabriel Mangalindan

Into tech, AI, startups and blockchain

Non-fungible tokens (NFTs) are gaining popularity as the crypto industry continues to grow. Let's look at what NFTs are, why they are traded, and also get a basic understanding of the NFTs market.

What Exactly Is A Non-Fungible Token?

Non-fungible tokens, or NFTs for short, are a specific kind of token designed to represent ownership of one-of-a-kind items. Tokenization of assets, including works of art, in-game items, collectibles, and even music, is now possible thanks to their development.

These tokens are stored on the blockchain, meaning that the record of ownership cannot be altered, and no new NFTs can be created by copying and pasting existing ones. This indicates that at any one time, there can be no more than one official owner of them.

The phrase "non-fungible" can describe a range of things, such as the land you live on, precious metals such as diamonds, or even your laptop. These are all examples of non-fungible things. You cannot use anything else in their place since these things have unique qualities that other items cannot replicate.

When it comes to fungible items, they can be traded because their value, not their specific traits, determine their marketability. For example, one dollar can be exchanged for another dollar, one Bitcoin can be exchanged for another Bitcoin or one Bitcoin worth of another cryptocurrency. This is fungibility.

What Are NFT Marketplaces?

A non-fungible token marketplace (NFT marketplace) is an online area where NFTs can be stored, exhibited, sold, and, in certain situations, minted (created). These online marketplaces serve a similar purpose to online stores such as Amazon.

Even though each NFT has its own distinct traits, there is still a market for collecting NFTs. Ethereum is the preferred blockchain when it comes to NFTs. On marketplaces like OpenSea, users can mint NFTs and buy, sell, and trade them from various collections. For example, people can auction off their newly issued NFTs and let others compete for them.

Remember that when listing and minting NFTs on marketplace platforms, you will need to pay a blockchain network charge. Therefore, choose prudently before investing in a blockchain-based system because prices vary greatly. For example, the Ethereum NFT ecosystem is currently the largest, but network fees can be high when there is a lot of demand. 

A leading NFT and crypto marketplace is launching a token sale. Chains.com, a cryptocurrency and NFT exchange platform, is launching the public sale of its native $CHA token on July 27th. The platform has already raised more than $2 million and is conducting its token sale in compliance with Rule 506c of the United States Securities and Exchange Commission (SEC).

The platform has 500,000 registered users in over 100 countries and saw over 60 thousand users apply to its CHA token whitelist during the presale phase. Over 800 businesses have applied for participation in the company’s Sunrise Program, geared towards Marketplace early adopters. 

Founded and backed by cryptocurrency industry pioneers, the company is part of NVIDIA Inception, Amazon’s AWS Activate, and Microsoft Founders startup programs. Chains’s multi-product platform offers a stack of solutions designed to help earn, trade, invest and spend cryptocurrency without having to understand the underlying technologies. Chains’s proprietary token is deployed to multiple blockchains: TRONBSCEthereum and Polygon.

The $CHA token serves the following functions within the Chains ecosystem, which include:

  • Flat reduction of transaction fees during payment: fees paid in $CHA will provide users with a 33% discount on the full fee price. 
  • Compounding fee reduction based on the amount of $CHA staked: users that hold $CHA balances on Chains.com will be eligible for fee discounts across all Chains products.
  • Subsidies when utilizing $CHA as a payment method: all payments executed in $CHA on the marketplace will be partially subsidized by the revenue pool. The subsidy will be done in the form of a rebate at the end of the month.
  • Business Prism Analytics account access: Prism is a powerful analytics product launching in Q4 2022. Chains’s users will be able to track: cryptocurrencies, fiat currencies, equities, and commodities based on the preferred underlying asset.
  • Launchpad whitelist access: Chains Launchpad is a built-from-scratch token sale platform that supports native and external payment gateways, vesting mechanisms, and multiple blockchains. Staking $CHA will be used as a mandatory presale/sale access mechanism.

Following a combination of adverse macro conditions that triggered a series of high-profile bankruptcies and the recent market crash, cryptocurrency users and investors are looking for tokens and projects with stronger and more transparent fundamentals. For that purpose, Chains is built as a safe platform for users to experience true identity-based finance, or in short, MeFi. 

What Is The Goal of NFT Trading?

Speculation is the main driving force in NFT trading, with many trades trying to replicate the success of early investors in projects like BAYC and Okay Bears. However, profiting from an NFT trade is not guaranteed, especially when you take into account the non-fungibility of the NFT. Since NFTs are non-fungible, you need to find a buyer who desires the exact traits that your NFT holds, which means you'll have to wait longer if you intend to sell.

For some, NFT collections resemble a type of gambling. The market value of NFTs, like the cryptocurrency on which they are based, can be volatile. Rather than the concrete facts included in a publicly traded corporation's annual report, the information you obtain online may be more of a rumor.

Because of the increasing number of investors entering the NFT market, non-fungible tokens will likely see more mainstream adoption as the market grows.

Conclusion

I hope this article gives you an understanding of how NFTs and the NFT market work. The NFT market is a dynamic and fast-moving space. In a few years, we have seen NFTs go from digital art collectibles to crypto gaming and the music industry. I can't wait to see what lengths we reach in the future.

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