Coinbase wants in on the NFT boom.
Users will be allowed to buy, sell and create NFT, or so-called non-fungible tokens, through Coinbase.
“Just as Coinbase helped millions of people access Bitcoin for the first time in an easy and trusted way — we want to do the same for the NFTs,” Coinbase Vice President of Product Sanchan Saxena said.
The crypto giant’s foray into NFTs represents a challenge to Mark Cuban-backed OpenSea, the current largest marketplace for NFTs. OpenSea recorded $3 billion in transactions during September 2021 alone and has recorded $1.3 billion so far in October, according to Dune Analytics.
Coinbase stock jumped slightly on the news but was still down 3.2 percent for the day as of Tuesday afternoon. The company’s stock often correlates with the price of Bitcoin, which had fallen 3.1 percent on Tuesday.
Non-fungible tokens, known as NFTs, are one-of-a-kind, verifiable digital assets that can’t be replicated. In the simplest of terms, they’re basically like limited-edition baseball cards or collectors’ items.
A blockchain-based digital artwork has sold in March at Christie’s for a history-making $69 million, putting its creator “among the top three most valuable living artists,” according to the auction house. Digital artist Mike Winkelmann, aka Beeple, made international headlines in March when it was announced that his work, “Everydays: The First 5000 Days,” would be showing at the London-based auction house.
OpenSea makes money by charging a 2.5 percent cut of sales made through its platform. Coinbase did not detail what fees it would charge on NFTs.
Proponents of NFTs say they let artists cash in on digital versions of their work.
Critics say the NFT market is a bubble that’s rife with potential for abuse and fraud — such as an incident in September when an OpenSea employee admitted to using insider knowledge to make money.
OpenSea said the unnamed employee bought particular NFTs knowing that they were about to be displayed on the platform’s homepage, boosting their value.
Coinbase told the Financial Times it’s taken steps to make sure similar incidents don’t happen on its own NFT marketplace.
“[Our] insider trading policies are designed so that no one associated with the company can trade crypto assets (including NFTs) with information that is not public,” the company said.
Coinbase’s NFT marketplace is set to launch sometime before the end of the year — and potential users can now sign up for a waitlist.