Indian cryptocurrency exchange WazirX’s now-defunct Non-Fungible Token (NFT) marketplace never had any custody or control over users' NFTs, co-founder and CEO Nischal Shetty said. His clarification came a month after a group of users wrote to him, citing technical issues with listing and accessing their NFTs.
Shetty said the confusion had arisen between its marketplace and another NFT marketplace, OpenSea, which was going to let WazirX’s users access and trade their NFTs post the closure of the latter’s NFT platform.
Shetty said the issue now stands resolved, likely offering relief to the users.
WazirX, the largest cryptoexchange in the country, shut down the operations of its NFT marketplace on February 22, 2023, less than two years of its launch, as the platform failed to gain traction.
The situation worsened with high volatility, taxes, and regulatory uncertainties impacting the virtual digital assets (VDAs) space.
The months following the closure saw a group of users facing difficulties in accessing their NFTs. They asked WazirX to transfer ownership of its NFT contracts to the wallet of their community-operated Decentralised Autonomous Organisation (DAO), according to media reports.
Around 18,275 NFTs were stuck in the escrow contract, which led to the tokens losing their value and credibility, the group claimed. The shutting down of the marketplace happened without any notice or prior information to its collector community.
“The WazirX NFT platform was a non-custodial platform, which means you are always in control of your assets, unlike a centralized exchange where the exchange keeps custody of your assets. I'm not sure where the question of not being able to access is coming from, because the platform never took custody of the asset,” Shetty told Moneycontrol.
He added, “There was some confusion on how do you get it (NFT) listed on other platforms and stuff. And those other platforms too had some of their own internal confusion on listing them, which got solved later. So now if you have your NFTs on WazirX platform, you could also have it on OpenSea and other places. Those are solved now. And I think the community is happy about it.”
Shetty believes that there was discontent among users who loved the platform and thought it was an innovation attempt. It was also the first marketplace from India started in 2021, aimed at facilitating the exchange of digital assets and intellectual properties such as art pieces, audio files, videos, even tweets, in addition to other digital goods and services. These were minted on the Binance Smart Chain.
“Unfortunately, with the market conditions and the kind of response we were getting, the platform really dried out in the last several months, which led to the platform getting shut down,” Shetty said.
At the time of the site closure in February, WazirX had said that in the 30 days prior to it, the platform only had 71 unique active wallets, 354 transactions, a volume of about $112.24 and the total platform fee it collected stood at around $6 while the server expenses ran into thousands of dollars.
According to WazirX, all the tokens minted on its platform were held in decentralised wallets that will let users trade and access their NFTs on any other platform running on Binance’s blockchain network.
Additionally, when multiple creators are using a single smart contract to mint NFTs, which will save gas fees, this becomes a shared smart contract. This will help them automatically list on OpenSea, which calls it’s a Shared Storefront.
Shetty left oversight of the day- to-day operations of WazirX earlier in 2022, and continues being involved at a strategic level. Last year, he shifted his base to Dubai and started working on his new L1 blockchain project Shardeum, which is set to go live later this year.
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