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Non-fungible tokens can be minted, sold or bought on custodial or non-custodial NFT exchanges
Today, the crypto space is filled with various NFT platforms, such as mass and niche platforms, self-service or invite-only platforms, gaming NFT platforms, sports or music NFT marketplaces, and more. They operate slightly differently, offer different functions and offer various types of NFTs.Most NFT marketplaces are based on Ethereum blockchain while others belong to the blockchain, such as Binance Smart Chain (BSC), polka dotSolana, and Cosmos, to name a few.
Some marketplaces are managed and some are unmanaged. It’s worth noting that some types of NFTs may not be accepted on some platforms, mostly custodial, as they can choose what comes in and what doesn’t. These platforms are curated and NFT content may be censored. At the same time, the non-custodial market is more open to a variety of NFT types from art NFTs and virtual collectibles to music and fashion NFTs — it all comes down to the user’s ability” imagination.
Escrow marketplaces act as third parties and custodians to sell through professional trustees acting as users. Conditional financial operations. By leveraging these marketplaces, users deposit their funds into the platform for safekeeping before exchanging digital assets. This is the case with the Binance NFT marketplace and the Nifty Gateway platform. On these platforms, interactions with other users are mediated by marketplaces that act as intermediaries.
Non-custodial marketplaces create a private connection directly between users, creators or sellers, and maintain user autonomy and anonymity as KYC checks are not required. Platforms like OpenSea and SuperRare allow users to access others, all connected in a decentralized network, to exchange NFTs without intermediaries.
Other differences between NFT markets are based on various factors, such as whether they support a certain file format, whether it’s the Joint Photographic Experts Group, Graphics Interchange Format, some kind of audio or video format. Other factors include the accessibility of the platform (self-service or invite-only) and the price of minting NFTs, for which users typically have to pay for creating smart contracts through gas fees.
Understanding the key differences between custodial and non-custodial NFTs is designed to help users choose how they want to protect and manage their NFT portfolios.
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