Utility Tokens in NFT Marketplaces: Worth Your Money?

Among the several categorizations we have in the crypto world, fungibility is a key differentiator. Tokens in the crypto world are classified as fungible or non-fungible. Fungible tokens function similarly to our regular currencies:

  • Regardless of the serial number on a dollar bill, one dollar is always one dollar.
  • Any one-dollar bill can be substituted for a one-dollar bill.
  • Similarly, most cryptocurrencies are fungible.

Non-fungible tokens (NFT), on the other hand, are one-of-a-kind and cannot be replaced by any other token. It’s not difficult to see where this concept can be taken from a commercial standpoint. We can use them to represent art, collectibles, music, or even maintain the authenticity of everyday items. NFTs are appealing because:

  • Their uniqueness and ownership can be verified,
  • They can be used across multiple applications developed by different companies, and
  • They can be easily traded through secondary markets.

These features open the door to new use cases and business models. NFTs, like art, are a promising investment with significant value.

How NFTs Work

NFT Growth in Q1 2021

It is simpler to think of NFTs as physical collector’s items only in the digital space. Instead of purchasing a physical painting, the buyer can obtain a digital file with exclusive ownership rights.

Unique data within NFTs allows for easier ownership verification and token transfer among owners. For example, artists sign their artwork by including a signature in the metadata of an NFT, demonstrating an assurance of ownership data integrity.

The Modern NFT Marketplace

Individuals who make art are known as creators. Tokenizing their art first creates a unique NFT, which they can then sell on the marketplace, either through a platform or directly to the buyer. In order to sell their NFTs on online platforms, creators must typically make representations about them. The creators may be required to demonstrate that:

  • They are the creators of the work, and
  • The work is unique.

Buyers need these representations to ensure that their NFT is legitimate and rare, as rarity is one of the most valuable characteristics of these assets.

Why do we need NFT Marketplaces?

Many are interested in discovering the best NFT marketplaces, eager to learn how they can begin an NFT collection. Let’s look at what goes into making NFTs available for selling and buying — a service delivered by NFT marketplaces:

  • To pay for transactions on your selected blockchain platform, you’ll need a digital wallet to store NFTs and cryptocurrency.
  • Purchase cryptocurrencies, such as Ether, or the currency supported by your chosen NFT provider.
  • Credit cards can be used to purchase cryptocurrency on various platforms.
  • Users could transfer cryptocurrency from exchanges to wallets of their choice.

NFT marketplaces play a critical role in connecting buyers and sellers of these tokens. In some cases, NFT marketplaces may also provide additional tools for quickly creating NFTs. Artists can sell their NFT artworks through specialized marketplaces. Buyers could search the marketplace for NFTs and then bid on the item of their choice.

As a result, any NFT developer or enthusiast should check out a list of the best NFT marketplaces to ensure that they are getting the best deals on the artwork, collectibles, and other digital assets.

How NFT Marketplaces Have Enabled NFT Growth

With new revenue streams, creators can find new ways to offer something unique and rare to their supporters, as the majority of NFTs are now digital. Popular examples of NFTs besides Beeple’s $69 million NFT include Jack Dorsey’s first tweet and the animation ‘Nyan Cat.’

GameStar.Exchange delivers a gamer-focused NFT P2P trading market. Artists or game developers can publish auction information for collections, and collectors can advertise needs and sell corresponding work. Mining incentives are awarded for all creations and transactions made by artists and collectors on the platform. Based on Polkadot, the platform supports multi-chain transactions on BTC/ETH/BSC, enabling a truly democratized marketplace for NFTs.

Utility Tokens

Utility tokens provide access to a specific service or platform. Their utility could be that tokens can be used on a platform to redeem a special service or to receive preferential treatment when purchasing services. They also reward loyal users and discourage fraud, as a result of enabling a calibrated, moderated ecosystem for the NFT marketplace.

The majority of tokens issued in the context of IDOs are utility tokens. Platforms primarily use them to generate interest in their products and for application and value creation in services provided by blockchain ecosystems.

GameStar.Exchange’s token — GMS, for example, enables a 25% discount on all trading fees on the platform, while simultaneously delivering crucial liquidity for the platform’s operators and investors so they can continue to deliver a positive customer experience.

Utility Tokens in NFT Marketplaces

In other words — if NFT marketplaces do well, utility tokens will do well as well.

Bottom line — utility tokens in your portfolio — like GameStar.Exchange’s GMS token — are an obvious chance.

The NFT market is booming, and amazingly high prices are being paid for NFT artwork. These prices, combined with the promise of new technology, raise ambiguity on how the industry will navigate concerns for artists and buyers. Mature marketplaces are likely to show us the way as they take into consideration licenses, terms, and conditions associated with NFT art transactions, pioneering the industry to new heights.