Shares of Chinese live-streaming platform operator Scienjoy Holding (SJ) traded more than 14% higher as of 11:22 a.m. EDT Monday following the launch of nonfungible tokens (NFTs) on its platform.
Earlier this month, Scienjoy partnered with Snipp, which helps companies run their loyalty and rewards programs, to develop several major initiatives including NFTs.
NFTs are digital files such as art, video, audio, and other files stored on blockchain, which is the digital ledger technology that powers cryptocurrencies. Some NFTs have already sold for millions of dollars.
Broadcasters of Scienjoy will now be able to mint their own NFTs on the platform, and allow users to purchase them through a bidding process with reward points earned.
The ultimate idea is to position NFTs as unique prizes in order to reward users and get them more engaged in the platform.
It is not uncommon these days for companies to see a nice boost off of NFT news. The new asset class has a lot of potential, but is still risky and could be very volatile for years to come, making companies that rely on NFTs volatile as well.
I think the idea from Scienjoy certainly has potential, but I would take a much more in-depth look at the company to see how strong its core fundamentals are before investing.