Are DeFi NFTs The Future Of NFTs?
Are DeFi NFTs The Future Of NFTs?
You probably know what an NFT is by now, if not, check out our previous articles here. We’ve explained the hype, the history leading up to them, and where to get them – you’ll like it!
Looking at the NFT landscape is interesting when you consider that we’re in the earliest days of this technology. We are seeing all the famous NFT types deployed to use quite effectively. A recent headline of the famous popstar, Doja Cat, caught our attention. A 1/1 Doja Cat music NFT sold for more than $188 000.00. The CryptoPunks recently crossed $1 billion in sales.
But where are the DeFi NFTs?
Since DeFi experienced an 82x growth rate from 2021, we should be seeing more DeFi NFT related headlines out there by now, right? I mean the magic is all in the numbers and the numbers are in its favor.
DeFi Is Important To NFTs
DeFi products are growing in both complexity and size which has made them very personalized. We have seen DeFi products make a seamless transition to NFTs because of the level of personalization that NFTs allow.
Whilst NFTs are making headlines for the media-related use cases right now, the sleeping giant is the DeFi-specific NFTs. Considering the fact that an NFT can virtually become anything of use to you, they have presented the crypto-world with fresh methods of creating democratized financial tools that are autonomous – and we’re loving it.
A famous NFT feature in the DeFi space is the power that NFTs are giving the users of DAOs (Decentralized Autonomous Organizations). These NFT types now come attached with voting abilities to make sure users can influence the organizations at a crowd-driven level. It’s creating a new sense of belonging in communities where thousands of users have shared decision-making power in a personalized financial tool. Who thought you would need an NFT to vote? Imagine visiting your local election site and being told that the only way to cast a ballot is by possessing an NFT that gives you the right to vote.
Colour Me Useful
The use-cases of NFTs are a great selling point. We’ve seen pages full of different use-cases and we’ve fallen in love with them. But the millions of use-cases have begun to mean nothing in the face of practicality. Simple and user-friendly practicality.
DeFi NFTs stand out because they package different services and functions into a single project. A good example is how the DAOLaunch DVC-NFT allows users the ability to vote, create a trading portfolio on their NFT, and then borrow and lend the DVC-NFT to gain profits on the market. Yes – that’s the new face of hybrid DeFi NFTs, and it’s phenomenal.
Take Axie-Infinity’s genius product for example. It’s more than a play-to-earn cryptocurrency game where players can earn tokens and breed cute collectible animals called Axies. The underlying ideology is that Axie links NFTs and DeFi by joining scarce NFTs with liquidity pools for in-game items. It’s a unique reference to DeFi coming together with NFTs in what is now the biggest cash-generating NFT platform in the world.
The Big Believers
The Bank of America released a research report about crypto, and their view on DeFi and NFTs is interesting. The first page of the report ceremoniously labels DeFi and NFTs as the most innovative area in blockchain and highlights the shift of Venture Capital into the space, stating that more than $17 billion was invested in the space in H1/2021, dwarfing the previous year’s $5 billion. Crypto die-hards and early supporters were never waiting for a bank to validate the power of this technology, nor were they waiting to read stats that they tirelessly helped to bring to being. It is good, though, to see one of the world’s biggest banks giving a candid and well-detailed nod at both DeFi and NFTs.
As the USA’s Federal Reserve gears toward exploring a digital dollar, the weight thrown behind crypto in its bull run seems to affect DeFi the most. The big players using NFTs as a tool to make their DeFi products easier to navigate are steadily growing. One of the main hindrances to the involvement of multinationals launching great DeFi/NFT products is the SEC’s investigation of DeFi applications and companies to determine if and how they should bring them into the current regulatory framework. That still hasn’t stopped the thousands of iterations that crypto projects have taken their products through. Big players or not, the growth still gears toward decentralization with fresh breaths of disruption every second day.
Are we going to see more games building their platforms on liquid protocols and effectively becoming DeFi products? Or, are we going to see more DeFi products create more NFT user functionalities in the form of utility-heavy NFTs. It’s a bit too early to tell exactly where the curve will sway for sure, but one thing we know is that DeFi-NFTs are incoming – and they’re going to occupy daily headlines soon.
Stay tuned for more thought pieces and updates:
Artwork from https://gellefra.art – OpenSea