Multi-chain NFT Marketplace
A current dilemma that plagues the NFT market is choosing a network to purchase and trade NFTs. This is not the same as choosing a marketplace. It is, instead, choosing the chain where the NFTs reside on. While Ethereum was a key pioneer in the NFT scene due to their release of the ERC-721 token standard, the instability of the gas price on the network combined with a relatively slow block time by modern standards has made several users explore alternative blockchains to mint their NFTs and a popular alternative is the Binance Smart Chain or BSC.
The five-second block time of the BSC is approximately twice as fast as that of ETH and the gas fees on the network are significantly lower, leading to faster, cheaper and more efficient ways to interact with NFTs. However, this gives rise to another problem. As the BSC and ETH blockchains are independent of each other, NFTs on ETH cannot be bought on the BSC and vice versa.
One possible solution to this is a multi-chain approach. With this, a user can purchase and trade NFTs on both the BSC and ETH blockchains. As this approach opens more doors, users could gain access to NFTs on other chains like Polygon, Fantom and HECO without having to leave the comfort of BSC.
An innovation that NFTs bring to the table is the ability to do fractional trading. This is where partial ownership of an NFT is made possible through smart contracts, enabling the trading of ‘shares’ as part of an NFT. Fractional trading is common in the world of centralized finance to allow large company shares to be distributed between multiple owners such as small-time investors who do not have the capital to invest in buying thousand-dollar stocks. This also enabled the benefits and dividends of holding the underlying asset to be split between its holders.
In DeFi space without cryptocurrency, smart contracts are also able to lock up NFTs to enable them for fractional trading, letting smaller players hold a share of thousand-dollar NFTs that would otherwise be difficult or nearly impossible to buy. Such shares can be held or resold in the future. It enables users who don’t have a lot of capital to also participate in the NFT market.
The above mentioned multi-chain approach will allow for fractional ownership not just on the blockchain the NFT is hosted on but will also enable fractional ownership with owners spanning multiple blockchains. For instance, an ETH-NFT with fractional shares being held by users on both the ETH and BSC blockchains.