How NFTs and DeFi combine to disrupt the non-fungible space

0

NFTs and DeFi are two of the biggest trends the investment world has seen this year. While non-fungible tokens (NFTs) have created a whole new digital marketplace for art investors, decentralized funding (DeFi) has given investors an entirely new landscape for using currencies without traditional restrictions.

While NFTs have achieved groundbreaking momentum due to their unique approach to digital collecting – investors now have the opportunity to digitally own exclusive one-off pieces of their favorite artist’s artwork – cryptocurrency has liberated those living in countries with anti-democratic governments that allow banks to have the full control over the transactions. It only makes sense that the two could eventually join forces to further disrupt the rapidly evolving investment space.

The enormous potential of NFTs is unstoppable. The new form of digital collectibles can range from gifs from sports memorabilia to photos by respected visual artists to photos of Shiba Inus. Notable NFTs of 2021 include Beeple’s artwork that sold for $ 69 million, the DogeCoin meme, which rose in value from $ 4 million to $ 220 million in one day just this week, when the meme was split into 17 billion pieces, and the famous artist Max Denison -Penders live painting thrown into a volcano shortly after it was captured.

Usually banks take deposits and lend money to account holders. DeFi uses a code to secure a contract so that borrowers can borrow at much lower interest rates, while those who deposit get more bang for their buck. This is made possible by taking the middleman, the bank, out of the picture.

The DeFi sector has grown exponentially over the past year and appears to be poised for steady growth in the years to come. With the advent of meme coins, stable coins and altcoins, it is a time when tokens are replacing traditional forms of finance.

As with all emerging industries, the DeFi and NFT areas are advancing rapidly. So it’s no wonder that the two will merge at some point.

While NFTs are an asset, DeFi can mobilize their value through secondary platforms. DeFi allows a lender to determine the value of the NFT’s collateral. Unlike traditional banks, which decide on the level of collateral, DeFi platforms allow the lender to make that decision. The loan is not paid out until the owner has set a price, market value and calculations.

With the recent surge in DeFi technology to help lend and fund NFTs, it’s no wonder Momento was born, a platform dedicated to hosting memorable NFTs. One of the key parts of the Momento project is its commitment to NFT staking.

With the sale of NFTs accelerating faster than ever, it is easy to see how the area would evolve to need a platform free from the control of banks and centralized finance.

Share.

Comments are closed.