Broadening the imagination space of on-chain auction — Discovering Burnt Finance — the decentralized auction protocol based on Solana
After laying a solid foundation in the financial area, crypto assets are starting to challenge the elites in the art industry.
A group of NFT lovers called Burnt Banksy proposed an idea to burn authentic Banksy artworks and turn the process into an NFT. This revolutionary idea has attracted the attention and resonated with some of the team members of Injective Protocol.
On March 8th, a famous piece of artwork called Mornos created by the street artist Banksy was burnt by its owner, and a live show of the whole process was posted on Youtube, which has obtained over 150 thousand views. This event has rapidly become the most famous news in the NFT field and drew the attention of people in the contemporary world of art.
Today CryptoJ is inviting Burnt Banksy, the founder of Burnt Finance to explore with us how Burnt Finance is redefining the mode of the auction, and how it can play out all sorts of assets through the Solana ecosystem to give us a better understanding of the development of NFT.
Question1: Welcome our guest Burnt Banksy to CryptoJ! First of all, please introduce a little bit about Burnt Finance. What was its emerging background and what will be its future vision?
Burnt Banksy: I first came into the limelight when we worked together to burn an authentic Banksy painting and turned it into an NFT. The act itself catapulted both us and our platform to the top of the NFT world in particular. We currently hold the record selling average NFT price on OpenSea for example which beat out other famous artists such as Beeple. This performance was covered by international media such as Forbes, BBC, Bloomberg, and many more.
During this process of both minting and creating the Banksy NFT we ran into a number of issues. This included the slow transaction times, high gas fees, and also the bidding manipulation that occurs on current auction platforms.
So my team and I began to work together to build Burnt Finance which is an entirely decentralized protocol built on Solana that is able to support entirely decentralized auctions. On Burnt we are able to achieve over 50,000 transactions per second while the cost per transaction is less than $0.001 cents. Users can create any asset of their choice such as synthetics, NFTs, and even new digital assets.
The platform will accommodate most major auction types ranging from English to Dutch and everything in between.
Burnt Finance was incubated by Injective and is backed by leading funds such as Alameda, Multicoin, Defiance, and many more.
Question2: Burnt Finance has gone through a rapid development process since its establishment, which can never occur without the effort of the team members. Could you please do a brief introduction to the team members, as well as some of the interesting stories behind the project?
Burnt Banksy: Due to the nature of this project and in order to retain the method behind crypto we are building this project under the name Burnt Banksy. We attended schools such as Harvard, Stanford, and NYU Stern. Together the team has over 25+ years of business and crypto experience.
After carrying out our NFT auction for the Banksy piece, we quickly came to realize that there was much more to be done in order to take NFTs and decentralized finance as a whole mainstream. We are building Burnt Finance in order to introduce a new paradigm within the auction space in which we retain high levels of decentralization while also offering lightning-fast speeds and negligible transaction fees. All of this is done while the technical barriers to entry are abstracted away via a highly intuitive front-end user interface.
Question3: Burnt Finance has always been attracting preferences from numerous investment institutes. Could you please share with us the financing process for the moment?
Burnt Banksy: Burnt Finance has rapidly garnered widespread acclaim and raised $3 million in a funding round led by Alameda Research, Multicoin Capital, Definance, Vessel Capital, Mechanism Capital, Hashkey, Spartan Group, and others.
Our incubation by Injective has propelled us to new heights as we were able to bring together some of the brightest minds in the crypto space into our project.
Question4: Talking about the auction, many people will be reminded of the NFT markets, which are gaining wilder application scenarios now, such as digital arts, domain names, collectibles, etc. How do you consider the current status of the NFT market?
Burnt Banksy: I think NFTs encompasses a rapidly growing market. The first phase of the NFT rise began with Crypto Kitties a few years ago. The industry has continued to grow over the past few months. In this February, NFT trading volumes have reached $382M, which is more than the entire amount spent on NFTs in 2020 as a whole.
The existence of NFT itself is a challenge to traditional art. It disrupts the traditional art procedure and challenges the traditional art elite. However, NFT opens up the floor for normal art collectors to a broader range of artworks. It also brings more opportunities to creators of all kinds instead of being exclusive to high-end artists.
Question5: In the traditional area, the auction institutes such as Christie’s and Sotheby’s have established a rather mature auction system. What are the differences Burnt Finance has compared with them?
Burnt Banksy: Traditional auction houses such as Sotheby’s and Christie’s present immense physical, economic, and social barriers to entry. First, the art itself must pass through a central clearinghouse and be approved by a centralized authority before an auction can be started. These opportunities are typically reserved for extraordinarily famous artists on the creator side and ultra-high-net-worth individuals on the bidder side.
We built Burnt Finance in order to bring about a platform that is both decentralized and easy to access for everyone. Burnt Finance offers all users unrestricted access to host a variety of auctions ranging from English to Dutch. Additionally, users will be able to mint a diverse set of synthetic assets as well as NFTs.
Question6: In the decentralized area, we have also come up with numerous auction platforms such as Bounce and Opensea. So what are the differentiated advantages and features Burnt Finance has compared with them?
Burnt Banksy: Some of the auction houses that claim to be decentralized are actually largely centralized in nature. Most of these platforms operate on the Ethereum blockchain which unfortunately means that they suffer from exorbitantly high gas fees and slow transaction times.
Most creators and buyers alike are kept out since the high fees often negate any potential avenue for users to enter. In many ways, the current auction protocols today exacerbate the issues prevalent in the world of centralized auction houses rather than helping to solve them.
Burnt can process 50,000 transactions per second within a 400 millisecond block time which allows for a truly fast bidding process and reduces opportunities for bid manipulation.
Transaction fees hover around $0.00005 for bidding or the minting of new assets. Burnt allows for the creation of English, Dutch, Bonding curves, and a plethora of other auction formats. This allows new artists and users to create new assets with ease.
Question7: What are the assets supported on Burnt Finance for auction? What are the differences between those assets?
Burnt Banksy: Burnt allows users to take auctions into their own hands, enabling the minting and trading of any asset in an entirely permissionless ecosystem. The platform can support auctions for synthetics, NFTs, digital assets, and much more.
A diverse array of synthetic assets can be minted on Burnt Finance which is termed Burnt Assets (bAssets). bAssets can include synthetic versions of real-world stocks, commodities, indices, etc. Given Solana’s exceptional transaction times and negligible fees, the minting of new bAssets is entirely seamless.
2.Non-Fungible Tokens (NFTs)
Burnt Finance offers the ability to mint a wide array of NFTs, which can be created from any media of the user’s choice (images, videos, GIFs, etc). The process is simple given Burnt Finance’s interface. The creator can select the name of the NFT and dictate specific properties such as the item description. Lastly, the user can select the desired future royalty.
3. New Digital Assets
Users can mint new digital assets on the Solana blockchain through the Burnt Finance interface. Given the existence of Wormhole (the bridge connecting Solana to Ethereum), anyone can easily bring over their Ethereum-based assets to Solana.
Question 8: How will you attract users and famous artists on Burnt Finance to mint, trade, and auction for all kinds of assets? Are you planning to give extra incentives to the artists?
Burnt Banksy: We will be implementing transaction mining to early users on the platform. 2 reasons for this. First to incentivize users to transact on the platform and second is to ensure the protocol is decentralized. Those who act most on the platform will have more say as there is more incentive for the platform to grow.
Question 9: Following the previous question, why does Burnt Finance choose to join the Solana ecosystem rather than the other public chains? What position does Burnt Finance hold in the Solana ecosystem?
Burnt Banksy: First of all, Solana is able to support entirely decentralized auctions and as a fully decentralized auction protocol. That’s what we are looking for. Secondly, built on Solana allows easier user interface and engagement, which means users can easily mint new synthetics or NFTs in just a few clicks. Security and reliability are our top priority. Solana has been audited by a Fortune 500-preferred security firm in order to offer iron-clad immutability for global scale and it is utilized by a number of prominent projects and currently helps secure billions of dollars. We chose Solana to enhance our primary goals.
Solana allows us to process 50,000 transactions/ second within a 400ms block time, allowing for a truly fast bidding process that significantly reduces the opportunity for bid manipulation. Average transaction fees are ~$0.00005, which removes friction deriving from gas fees.
Additionally, the Solana ecosystem has been instrumental in our progress and growth. We have received the Solana grant and the resources provided are second to none. Additionally, Solana’s wormhole bridge allows us to bridge over Ethereum assets to further expand our reach.
We plan to begin with Solana, but in long-term development, we have the plan of supporting multi-chain. As Solana is already integrating on Ethereum, we will use it as a bridge. In the future, we will support other layer-1.
Question 10: For value capturing, what is the tokenomics of Burnt Finance, and how do you stimulate the users to hold your tokens in the long run? What are some application scenarios of your token?
Burnt Banksy: Burnt Finance is powered by the BURNT token. Use cases for the BURNT token include but are not limited to the following:
Protocol Governance: In order to promote decentralized community governance for the network, BURNT would allow holders to propose and vote on governance proposals to determine features and/or parameters of the Burnt Finance platform (this includes protocol upgrades, profile verification, and synthetic asset creation).
Collateral for Synthetic Assets: As the native platform currency, Burnt tokens can be used as collateral for minting synthetic Burnt Assets (bAssets) on the Burnt Finance platform. These secondary synthetic assets would in turn be transferable and tradeable.
Fee Reduction: Users who purchase NFTs on the platform using BURNT are entitled to enjoy reduced transaction fees from (1% to 0.1%). The price will be determined by the AMM pool on Solana.
Participation Incentives: In order to promote adoption of the platform, a portion of the token supply within a given epoch (period of time) will be distributed to early users who engage on the Burnt Finance platform for various activities, such as minting synthetics or NFTs, or buying or selling NFTs.
BURNT tokens are used to incentivize node operators of Burnt Finance. Moving forward we plan to host a token sale so that our community can take part in the Burnt Finance platform. Token sale details will be announced soon. We will also be carrying out some special NFT drops and other special events for our community moving forward. We release everything new every few days and will be releasing the first iterations of our product in the coming months. The best way to remain updated is through our official Twitter and Discord Channels which you can see here: https://linktr.ee/Burnt.finance
Question 11: What are the following plans of Burnt Finance? Will you establish any governance token? Any new product being launched? Will you cooperate with the projects for greater development?
Burnt Banksy:（not mentioning public sale for now）
We will be carrying out some special NFT drops for our community. The best way to remain updated is through our official Twitter and Discord Channels which you can see here: https://linktr.ee/Burnt.finance
Some of our investors include CEOs and execs from top-tier projects such as Matic (Polygon), Terra, Marlin, Fantom, and Injective. These projects plan to host special NFT drops on Burnt Finance’s platform.
In addition, we have already worked with Alec Monopoly, Pussy riot, the naked philanthropist, bored Elon, etc. Each of them has several hundred thousand if not millions of followers which can bring in more retail traction upon launch.
We will also be carrying out major NFT events and promotions not found anywhere else in the entire crypto ecosystem. This includes launching art into space and also building art galleries where our works will be shown. We fully believe that Burnt Finance will be the first NFT platform to help take crypto and thereby NFTs mainstream.
Question 12: Apart from Solana, will Burnt Finance support any other public chains in the future?
Burnt Banksy: In order to promote adoption of the platform, a portion of the token supply within a given epoch (period of time) will be distributed to early users who engage on the Burnt Finance platform for various activities, such as minting synthetics or NFTs, or buying or selling NFTs.