Crypto derivatives exchange FTX has started charging US$10 for people to mint their non-fungible tokens (NFTs) on its new NFT marketplace after it was flooded by images of fish shortly after launch, according to FTX CEO Sam Bankman-Fried.
FTX’s new NFT marketplace allows users in the United States and internationally to mint, buy and sell NFTs across the Ethereum and Solana blockchains. “Make your own NFTs,” Bankman-Fried said in a Sept. 6 tweet announcing the launch.
The new marketplace quickly caught on and was inundated, inexplicably, by users posting fish images — leading FTX to impose a US$500 fee to submit NFTs.
“Due to the massive number of submissions, too many of which were just a picture of a fish, we are now charging a one-time $500 fee to submit NFTs,” tweeted the FTX CEO. “Hopefully this will reduce spam.”
The one-time fee was reduced to a US$10 per NFT charge hours later after feedback that the US$500 fee could price out struggling artists from participating. “Now, it costs a flat $10 per NFT to mint them, no up-front cost. We’re refunding all the $500’s paid,” Bankman-Fried tweeted. “Hopefully this reduces (fish-related) spam while also making it affordable.”
Building out the NFT ecosystem
FTX, which is based in Hong Kong, joins a growing number of cryptocurrency exchanges that have launched a marketplace for NFTs amid explosive growth. Last week, OKEx announced the launch of its NFT marketplace and in June, Binance, the largest cryptocurrency exchange by market value, launched its NFT marketplace, joining the ranks of Hong Kong-based Crypto.com, India-based Binance-owned WazirX, and Japan-based Coincheck.
In an interview with Forkast.News, Bankman-Fried said that FTX, as a centralized exchange, saw an opportunity to provide people with the infrastructure to list and trade their NFTs on Ethereum and Solana.
Allowing anyone to list their content instead of the curated approach adopted by some other platforms was intentional, Bankman-Fried said.
“I really like the idea of it being completely open for anyone to list whatever they want,” Bankman-Fried said. However, FTX very quickly realized that some limits would need to be put in place as the platform received over a thousand NFT submissions, filled with random fish pictures, within an hour of launch.
It is unclear why the platform was flooded by fish, but it was clear that this could quickly become millions of NFTs in a short period of time that could, in turn, stretch the infrastructure and overburden the site, said Bankman-Fried, adding the spam pictures included drawings of little fish using Microsoft Paint as well as images of fish copied from Google.
“We don’t want to be in the business of deciding what looks good and what doesn’t, and we don’t want it to be like, ‘We’ll just take our favorite fish and none of the others,’ ” Bankman-Fried said. “And so what we decided was like, ‘Look, like there’s a public good here, we’ll try and put a little bit of monetary road bump.’ ”
“I don’t want this to be a place where it’s just us choosing what content to put on the platform. We’re going to be partnering with some people to bring hopefully some cool NFTs to the platform and I am excited about those,” Bankman-Fried added. “But beyond that, I’m really excited for users to be able to have freedom with it. This sort of freedom that we’ve seen with OpenSea to create what they want, to list what they want, and then for buyers to choose what they want.”
OpenSea, an Ethereum-based NFT marketplace, has been dominating NFT transactions. Last month, OpenSea’s transaction volume surged to an all-time high of over US$4.3 billion, according to Dune Analytics. “One of the things we’ve done is made sure to make it compatible with OpenSea,” Bankman-Fried said. “We want to build out this ecosystem to create more options for people and more connectivity rather than trying to create sort of one siloed platform to go head to head with the other one.”
In terms of cross-chain connectivity, Bankman-Fried said an NFT minted on the FTX platform will have an Ethereum and Solana version and enable users to transport their NFTs between the two blockchains depending on the marketplace that they wanted to participate in.
For example, users can deposit a Solana chain NFT to FTX and then withdraw it to the Ethereum chain, which means that there would be an equivalent wrapper on Ethereum for that NFT and the Solana version would be locked up. Deposits and withdrawals will be available in the coming weeks and users will then be able to deposit NFTs from other platforms.
NFTs with staying power
Bankman-Fried said he’s “really surprised at the amount of excitement that we’ve seen for NFTs, not just from the crypto ecosystem, but from everywhere.” While there has been some speculation around NFTs, he did not think many were buying just to flip it for a profit.
“I’m not as sure as I used to be that the sector as a whole is going to undergo a correction,” Bankman-Fried said. However, he expects some NFTs that have been bid up too high to see some price correction.
NFTs with staying power would be those that are the first in the space, something that cannot be easily replicated, Bankman-Fried said. His own test NFT listing on the FTX.US site titled “Testing Testing 123 #1” today sold for US$270,000.
Bankman-Fried said he was generally much more excited about NFTs that have some sort of real-world tie-in, such as ticketing or redeemability for physical objects. NFTs related to the slew of sports sponsorships that FTX has been signing could also be in the pipeline. “We’re looking into it,” Bankman-Fried said. “I do expect that we’re going to have something there.”
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