Nonfungible tokens, which are digital assets that represent real-world objects such as videos, collectibles, music, art and in-game items, are arguably the most discussed crypto topic of 2021. While everyone, from artists and celebrities to athletes and major companies, wants a piece of the growing market right now, Huobi has a long-term strategy to become a leader in the space.
“What we see in the market today is only a fraction of what’s actually possible with NFTs,” Lily Zhang, chief financial officer of Huobi Group, said to Reuters.
Investing in NFT projects
In May, Huobi announced the launch of its venture arm which will deploy $100 million into early-stage blockchain and decentralized finance projects over a three-year period. Of the total amount, a $10 million fund will be set aside exclusively for NFT projects. The NFT fund will invest in NFT collectibles and emerging NFT projects such as marketplaces, mining or crypto gamification.
“NFTs are the future of art and collectibles, but they’re also giving creators such as musicians and artists a new way to engage with fans and introducing blockchain to the mainstream audience,” said Ciara Sun, vice president of global business at Huobi, adding, “As an immutable way to prove authenticity and ownership of digital files, we’ll see use cases increase across gaming, media, enterprise and more in the near future.”
Huobi says the goal of the NFT fund and the venture arm is to not only financially support promising projects but also merge them into the greater Huobi ecosystem, where they can be accessed by a global audience.
Building an NFT marketplace
While the NFT market is growing globally, few platforms and marketplaces cater to the Asia-Pacific region. China alone accounts for more than 20% of the global art market, according to the most recent Art Basel and UBS Global Art Market report.
To address this gap and provide NFT trading services built for a global scale, Huobi helped launch iBox, an NFT marketplace that caters to Asia’s luxury art audiences. As the first nonfungible trading marketplace from Huobi’s incubator program Huobi X Center, iBox works with influencers, artists and celebrities as well as widely-recognized brands and intellectual property to launch exclusive NFT collectibles on its platform.
Increasing token diversity in the NFT market
Currently, 13 tokens are listed on Huobi’s NFT market and more are being added on a regular basis. MATIC, the Ethereum token that powers the Polygon network, topped Huobi’s NFT market during Q2 of this year. Its trading volume even reached $789 million in a 24-hour period on May 19.
– MATIC’s 24-hour trading volume from May 19 to 31, 2021. Source: Huobi
In addition to well-established tokens such as MATIC, Huobi has also listed Huobi NFT, RenderToken (RNDR) and Wax (WAXP), all of which have seen high 24-hour trading volume numbers since their respective launches on Huobi’s NFT market.
– NFT’s 24-hour trading volume from May 20 to June 10, 2021. Source: Huobi
While there is a wide range of NFTs on the market, every NFT project listed on Huobi is carefully selected from a large pool of candidates to ensure the best quality possible. Some of the topic projects chosen so far include MATIC, the native token of Polygon; MANA, a token used for LAND purchases as well as virtual goods and services in Decentraland; and Flow, the native token of Flow, the ecosystem created by Dapper Labs which is also the company behind the CryptoKitties blockchain game and NBA Top Shot.
“We have witnessed rapid growth for our international [NFT] market,” said Sun, adding, “Like all of the projects chosen for our various programs, all potential NFT projects that will be listed on a Huobi exchange go through an extensive vetting process.”
Engaging with the NFT community
According to marketplace data, the global NFT market has already reached $2.5 billion in sales this year, up from $13.7 million in the first half of 2020. While Huobi recognizes the potential in the NFT space, it also acknowledges that the industry is nascent and NFTs, like other cryptos, have to be recognized and accepted by mainstream audiences.
To propel adoption and increase the liquidity of its NFT market, Huobi is actively engaging with its community and NFT enthusiasts on a series of campaigns, the latest of which is called “NFT Prophet.”
According to the rules, users are tasked with selecting and trading the NFT trading pair they think will see the most gains the following day. There are seven rounds in total and participants whose predicted token ranks top two will be able to share 49,000 Tether (USDT). All participants in the campaign would share a prize pool of 15,000 USDT as well.
“We hope in the future, users choose Huobi not only because of our excellent liquidity or strong risk control system but also because we have a rich selection of NFT tokens ideal for investing,” shared Sun, adding, “As we continue to build on our strategy to capture a significant market share of the global NFT market, we expect more initiatives to be announced in the near future.”