Ripple has fired up a $250 million fund to support the development of non-fungible tokens (NFTs) on its platform, the company said in a blog post Wednesday.
The Creator Fund will engage with creators, brands and marketplaces to find new use-cases for NFTs on Ripple’s XRP network, which may help it compete more fiercely with the ethereum blockchain – the main network for NFTs.
NFTs, which are essentially digital collectors’ items that represent real-world assets like artwork, have been widely adopted by fashion houses, artists and creators and touted by celebrities and star athletes. Already, there are 20 million NFTs on the OpenSea platform, the largest marketplace for the tokens.
“Ultimately, we believe NFTs embody the promise of tokenization and represent a tipping point for its embrace by the mainstream. Through the Creator Fund and the XRPL (the XRP network), we’re excited to unleash new utility for NFTs and accelerate the broader shift to tokenization,” Ripple said in its post.
NFTs are unique and cannot be exchanged like-for-like. To buy or trade them, people often have to employ a cryptocurrency – such as the ethereum network’s ether token – which in turn has fed demand for digital coins this year.
Ripple’s XRP network is an open-source, decentralized platform that many people use for the speed and low cost of sending payments across its network. The blockchain also already hosts NFTs.
The network’s XRP token has gained in popularity this year, along with the rest of the crypto market. It’s risen by around 290% over the year, compared with a 50% gain in bitcoin in that time, according to Bitfinex data.
“Many creators are still hesitant to engage with NFTs because of technical concerns about NFT platforms, or for fear that their NFTs won’t gain traction. Developers can also be turned off by clunky user experiences, high transaction fees and environmental impact concerns with minting on many other platforms,” Ripple said.