02 Nov Build Your NFT in the Non-Crypto ChinaverseBack to Insights
NFT stands for “Non-Fungible Token”, a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded.
With the rise of Metaverse, 2021 can be considered the year of NFT and this phenomenon continues into 2022.
NFTs introduce the notion of scarcity into the digital world by granting the specific identification of a piece of work by blockchain technology. The wave appeals to multiple industries, including video games, art, fashion & luxury, finance, and many more…
Yet, NFT in China follows a different logic from the rest of the world. In April, China’s financial associations proposed that NFTs must not be used for securitization or transacted in cryptocurrencies. That is to say, at the current stage, NFT in China is decoupled from its purest form. NFT trading with cryptocurrencies on global, public blockchains, freely and anonymously would not be allowed in the country. This forces participants to:
Rethink & rename NFT offerings
The Chinese government strengthened the supervision of NFT platforms, forcing tech companies to rethink and rename their offerings (to digital collectibles).
Keep offerings innovative
As these tokens can’t be traded, it makes citizens collectors – not investors – which puts pressure on content creators to keep their offerings innovative in the long-term.
Chinese tech giants are actively releasing their own NFT products
Major NFT marketplace in China
Alibaba Jing Tan
Available in APP / Alipay Miniprogram
A marketplace for artwork collection, it supports the 3D display of digital collectibles.
Available at APP
On August 16th, 2022, Tencent stopped releasing new NFTs to users. But the owners of existing collectibles will still be able to hold, display or request a refund for their possessions.
Available in APP & H5
It is the first decentralized digital asset trading platform in China that adopts the Ethereum public blockchain and the first marketplace that supports the secondary trading of digital collectibles.
Available in Xiaohongshu Mini Program
In R-Space, both creators and consumers can meet and trade digital collectibles. Through AR capability and 3D technology, R-Space has become an experimental playground to inspire the communities to express themselves with a new level of creativity and experience.
How to build your NFT in China?
Up to now, the future of NFT in China is not yet to be settled. Tech giants are testing the water by mainly offering non-tradable digital collectibles. However, for brands, the value of NFT goes beyond investment profit.
NFTs can serve for authenticity & IP protection, branding & PR, or even creating new business models to generate revenues. More importantly, the consumer craze about NFT and metaverse is still out there.
To seize the opportunity, at EY Fabernovel, we offer you 2 solutions to build your NFT in China:
NFT Solution 1 #NFT MARKETPLACE
Build NFTs on an existing NFT marketplace platform such as NFT China and then direct the traffic from your digital platform to the marketplace.
All transactions of NFTs will take place on the existing marketplace. In this case, you will not have access to any personal data from each transaction.
You will only need to create a redirection page on your digital platforms and apply for releasing your NFTs on that marketplace. Depending on different marketplaces, there will be a minting fee for the NFT creation (NFT China charges 300 RMB per NFT) and a transaction fee (NFT China charges 33 RMB per transaction).
This is the simplest and safest option to build an NFT, as you bear no risk of being compliant with China’s regulations on NFT. However, the user flow is not under your control. It is likely to lose users after they jump out of your digital platform.
NFT Solution 2 #OWN YOUR MARKETPLACE
Tailor-make your own NFT marketplace.
You have full control over the NFT marketplace. To acquire transaction data, your digital platforms needs to hold a unique user identifier and to connect with a blockchain service to record the transaction. For example, Xiaohongshu’s R-Space is based on Tencent’s ZXChain.
Creating an NFT marketplace allows you to control the whole experience, and keep customers engaged within your ecosystem. Nevertheless, you will be legally responsible for the marketplace and need to keep an eye on the NFT regulations in China.
Building your own marketplace won’t happen overnight, but could be a very pioneering solution among the brands in the market.
To further explore the Metaverse,
Contact us at: email@example.com
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- Build Your NFT in the Non-Crypto Chinaverse