One estimate shows that NFT marketplaces and collections grew from $106M in 2020 to $44B+ in 2021. Despite such massive growth, one of the main pushbacks in adoption is the high transaction fees, gas fees, slow speeds since most marketplaces are built on Ethereum, which is known to be to have some scalability problems that result in these pain points. Solana is a high-performance blockchain that handles scale more efficiently as its capable of handling tens of thousands of transactions per second, while Ethereum is limited to ~13. Burnt Finance is a Solana-based NFT marketplace that allows users to create NFTs and collections and buy/sell/trade NFTs using auctions without any fees. With the company’s Inferno Mainnet, users can mint NFTs with just a few clicks with a gas fee of just $.01 and no transaction or listing fees. Burnt Finance to also launch lending and borrowing solutions, gaming-focused assets, and fractionalization for NFTs in the future.
AlleyWatch caught up with Burnt Finance Founder Burnt Banksy (alias) to learn more about how his experience burning a Banksy and attempting to create an NFT for its served as the inspiration for the business the company’s strategic plans, latest round of funding, which brings the total funding raised to $14M, and much, much more…
Who were your investors and how much did you raise?
We just closed a $8M Series A fundraise. The round was led by Animoca Brands, famous for backing leading blockchain games, including the metaverse platform Sandbox. Other investors included Multicoin Capital, Alameda Research, DeFiance, Valor Capital Group, Figment, Spartan Capital, Tribe Capital, Play Ventures, HashKey, Mechanism Capital, DeFi Alliance, Fantom Foundation, and Terra Foundation.
Tell us about the product or service that Burnt Finance offers.
Burnt Finance is a fully decentralized NFT platform built on the Solana blockchain. Users are able to (1) create NFTs and collections (2) buy, sell, and trade NFTs through various auction formats (English, Dutch, Buy Now) all for zero fees, and (3) in the future, will be able to lend and borrow NFTs.
What inspired the start of Burnt Finance?
Burnt Finance was started when I decided to burn an authentic Banksy piece, and mint an NFT of the process – which sold for ~229 ETH. During the process of creating the Banksy NFT, we ran into several issues. These included the slow transaction times, high gas fees, and bidding manipulation that often occurs on current NFT auction platforms. So I and the team began to work on Burnt Finance, which is an entirely decentralized protocol built on Solana that can support entirely decentralized auctions. This means no single entity controls bidding or winning.
On Burnt, we’re able to achieve over 50,000 transactions per second while keeping the cost per transaction less than $0.01. Users can create any asset of their choice including NFTs and other new digital assets. Burnt Finance accommodates a variety of auction types ranging from English to Dutch and everything in between.
How is Burnt Finance different?
The most well-known NFT marketplaces today are inherently centralized – they intervene with users’ experiences by having the ability to remove listed NFTs based on verifying their own centralized database (where they store NFTs) and having an application process to launch collections (where they have the final say on who can and cannot list their NFTs). In addition, these marketplaces charge transaction fees (2-3%).
Through full-decentralization, Burnt Finance provides an entirely permissionless and frictionless way for creators to list their NFT or launch a collection and for users to buy, sell, and trade NFTs all at zero fees. Over time, we will be adding DeFi products as well and will become an NFT ecosystem, becoming much more than just another ‘NFT marketplace’.
What market does Burnt Finance target and how big is it?
Burnt targets the Solana ecosystem and is soon expanding to other EVM (Ethereum Virtual Machine) compatible chains and Terra, a blockchain built around stablecoins. It is estimated that there are about 1.25 million users on Solana and more are learning about NFTs every day, quickly gaining market share from Ethereum-based NFTs.
What’s your business model?
Our current business model is centered around providing a zero-fee NFT ecosystem for our users to create, buy, sell, and trade. We believe NFTs will be a trojan horse for users to move over toward DeFi. Over time, our DeFi offerings (e.g. lending) will be the eventual way we monetize.
Our current business model is centered around providing a zero-fee NFT ecosystem for our users to create, buy, sell, and trade. We believe NFTs will be a trojan horse for users to move over toward DeFi. Over time, our DeFi offerings (e.g. lending) will be the eventual way we monetize.
How has the business changed since we spoke after your Seed round in
November?
Since November, we’ve scaled out the team which is now around 15 people, and have worked on expanding outside of the Solana ecosystem to other blockchains. We’re also developing a host of other DeFi products (e.g. lending)
What was the funding process like?
This new Series A raise was prompted by a need to build our team and ensure we had enough funds to power our expansion into new chains and product features. As we released a private beta version of the product, we facilitated over $100M in testnet trading volume over a week. That being said, we realized that scaling was our number one priority.
What are the biggest challenges that you faced while raising capital?
Honestly, our biggest issue was deciding what partners would be the best fit as we expanded. A lot of the round consisted of prior investors who we have been working with for months now. As we looked to the future, we looked to players like Animoca and Terra to help complete our vision for Burnt, expanding into GameFi and being multichain.
What factors about your business led your investors to write the check?
Beyond having a clear vision for the project, the product really spoke for itself. Also, our team’s passion and experience were crucial for those conversations and we’re grateful that it shined through.
What are the milestones you plan to achieve in the next six months?
Up next, we’re rolling out new DeFi and GameFi initiatives such as Lending and pushing hard to expand into the Terra ecosystem and other EVM-compatible blockchains to give our users a broad offering. Additionally, we are creating a launchpad for users to easily create thousands of collections in less than 10 minutes.
What advice can you offer companies in New York that do not have a fresh
injection of capital in the bank?
Ship Ship Ship. Internally we even started doing our testing in production. A solid product is really the foundation to any success; both for fundraising and getting users. In the tough times, never forget what you’re here for and remember WAGMI (we’re all gonna make it).
Where do you see the company going now over the near term?
Over time, we want to become an all-encompassing hub for NFTs by integrating DeFi functionality which includes NFT lending, liquidity mining with staking incentives (essentially locking in assets for interest), fractionalization (being able to buy part of a high worth NFT), and GameFi (play to earn type products). The idea is to make Burnt a vibrant ecosystem where NFTs gain additional utility and functionality to help unlock new forms of NFT liquidity and Web3 features across multiple chains.
What’s your favorite outdoor dining restaurant in NYC
ilili has some of the best Lebanese food and it’s really close to our office.
