China’s NFT market: Who are the major players, and what makes them different?

China’s NFT market: Who are the major players, and what makes them different?

Since digital artist Beeple sold his work Everydays: the First 5000 Days (a digital collage image) for $69 million last March, the market around trading digital art, a popular type of NFT, has reached a fever pitch all over the world.

A non-fungible token, or NFT, is a blockchain-based record that represents unique items that are non-interchangeable. You’ve probably heard about some of the most common forms of NFT, such as digital art, photographs, music, video, in-game items, and other forms of media, but NFTs can really be used to show ownership of just about anything.

Since the first NFT work by artist Kevin McCoy appeared in 2014, the market stayed quiet for a few years before it started taking off in the past two years. Popular NFT trading platform OpenSea launched in 2018, steadily introducing more people to trading digital arts. Last year, the market saw an increase in popularity, with trade volume hitting $23 billion, according to Forbes .

In China, the NFT digital art market is also bustling with new players and projects. That may come as a surprise for people familiar with China’s strict approach to cryptocurrency , having fully banned crypto trading and mining last year. However, the country has also embraced controlled versions of blockchain technology , such as the digital yuan, encouraging its growth in various sectors. So far, China has allowed NFTs but banned people from speculating and trading them.

NFTs are viewed more as a derivative of blockchain technology rather than a tradable asset in China. Tech majors, like Alibaba, Tencent, and JD, have built their own platforms where users can buy and collect NFTs, but are prohibited from trading or reselling their purchases. Most Chinese tech giants don’t even use the term NFT, hoping to stay on regulators’ good side and avoid association with the global crypto market. Instead, they use the term “digital collectible.”

This article dives into some of the most notable Chinese NFT platforms to give a picture of China’s NFT marketplace, its characteristics, and the differences between the market for NFTs in China and the rest of the world. Key players in the Chinese NFT space

Most Chinese NFT platforms are built on consortium blockchains or Blockchain-as-a-Service (Bass) infrastructure, giving companies and organizations authority to govern the platform. This is in direct contrast to popular global NFT platforms, which are built on public blockchains, meaning that they are permissionless, allow anyone to join, and are decentralized in nature, such as Ethereum or Solana.

The most significant difference between NFT projects in China and the international market lies in this concept of decentralization, where decision-making power is taken from one centralized entity and given to member-owned communities, known as Decentralized Autonomous Organizations (DAOs). While there’s continued debate about the actual degree of decentralization of projects within the international community, with many projects working towards full decentralization, China’s NFT market strictly follows the country’s laws and regulations, and its projects are overwhelmingly centralized. BSN: BSN-DDC

China’s state-backed blockchain infrastructure Blockchain Services Network (BSN) released on Jan. 24 its own NFT infrastructure called BSN-DDC , short for Blockchain Services Network Distributed Digital Certificate.

BSN-DDC provides companies with blockchain infrastructure to build their own NFT platforms that comply with Chinese regulations.

The infrastructure has integrated 10 public blockchains, including Algorand, Cosmos, Ethereum, Polkadot, Tezos, and Nervos. These integrated versions of public blockchain work differently from their original versions: they set restrictions on who can govern the blockchain, identify all participants, and use fiat currency for payments instead of cryptocurrency. Ant Group: JingTan (Topnod)

Alibaba’s fintech affiliate Ant Group launched its digital collectible platform AntChain Fan Points last June, which was renamed Topnod (Jingtan in Chinese) last December. The platform runs on a consortium blockchain built by AntChain, Ant’s blockchain arm.

Users are not allowed to resell digital collectibles bought on Topnod, and can only gift them to authenticated users after holding them for more than 180 days.

Collections on the platform often have a price range of RMB 20-30 (about $3 to $5) and a limited collectible count of 8,000 to 10,000. The platform uses its own payment system on Alipay, one of mainland China’s two main cashless payment companies. All users need to complete real-name identity verification and transact with fiat currency.

The platform boasts a fast and cheap transaction speed. “Topnod was able to provide a technical capability to process 100,000 digital collectible transactions per second during a Spring Festival digital campaign in 2022. This leads the consortium blockchain industry,” a Topnod spokesperson said.

Topnod works […]

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