The boom of crypto has caused tons of investment options for people. After all, there are over 4,000 types of cryptocurrencies in existence so far in 2021, most of which are either worthless or are bound to fail soon.
Since its boom, these non-fungible tokens have become underutilized, more often than not, lying idle in wallets until they are resold. NFTs, generally speaking, are on their way to mass adoption. However, their perceived value remains disconnected from their practical value.
NFTs describe unique cryptographic tokens which are considered valuable because of their security and scarcity. No two NFTs are the same. Together with the decentralized financial products, NFTs can lead to the creation of unique financial services.
Potential use cases for this sort of technological innovation consists of investments, NTF-backed loans, liquidity mining, or in-game currencies. There are truly unlimited concepts for combining NFTs and decentralized finance (DeFi), much like people discussed the possibilities a few years ago when it came to cryptocurrencies and blockchain use cases. With NFTs, we will just have to wait and see what cool projects will appear soon.
Some of the projects working in this field are:
- Drops NFT: Drops is a platform that “brings DeFi-style infrastructure to NFTs, adding much-needed utility to idle NFT assets”, according to the website. There, users should be able to leverage their NFTs to get loans and make real yield, significantly minimizing the opportunity cost of holding on to them in the long-term.
- PolkaRare: It is a web3 economy to create, trade, and discover NFTs. PolkaFoundry leverages the scalability and interoperability of Polkadot. It makes it easy for DeFi apps to manage identities, store files, and access Oracle data. $PRARE is the native token of PolkaRare used for governance, staking rewards, medium of exchange, NFT farming, and so on.
- NFTify: It is a simple p2p marketplace for collaterized NFT loans. It “allows small businesses to create their own NFT store without coding, helps NFT authors issue NFT easily and detect fake/similar content for copyright protection purposes, provides NFT collectors with a platform to transact at a much lower cost”.
- SolvFinance: Solv, with vNFT (Versatile NFT, a novel ERC721 enhancement standard), will enable diverse programmable financial instruments with sophistication to circulate in the on-chain financial ecosystem. It invented the token standard for Financial NFTs, and is aiming to be the multi-lateral issuing and trading infrastructure for financial papers on-chain.
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PawnSpace: It is a decentralized NFT collateralized lending protocol, that allows you to put your NFTs as collateral for borrowing loans.
NFT is going to go bigger in the future because of the nature of the token as well as the potential it has when it comes to DeFi investments. With the world moving closer to becoming full of digital-native objects, NFTs are also predicted to resolve the question of ownership, for once and for all.
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source https://www.reddit.com/r/btc/comments/ou7zme/does_the_future_of_nft_lie_in_financial_nfts/
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