How NFTs and DeFi are Combining to Disrupt the Non-Fungible Space
September 16 2021 - 09:02AM
NEWSBTC
NFTs and DeFi are two of the biggest trends the investment world
has seen this year. While non-fungible tokens (NFTs) have given
rise to a whole new digital marketplace for art investors,
decentralized finance (DeFi) has provided investors with a brand
new landscape for using currencies free of conventional
limitations. While NFTs have gained groundbreaking momentum for
their unique approach to digital collecting—investors now have the
opportunity to own exclusive one-off pieces of art from their
favourite artist digitally—cryptocurrency has liberated those
living in countries with anti-democratic governments that allow
banks to have complete control over transactions. It only makes
sense that the two could eventually combine to even further disrupt
the rapidly evolving investing space. There’s no stopping the vast
array of potential that NFTs hold. The new form of digital
collectibles can span the spectrum from gifs of sports memorabilia,
to photos of esteemed visual artists, to photos of Shiba Inus.
Noteworthy NFTs of 2021 include Beeple’s artwork that sold for $69
million, the DogeCoin meme that just this week flew in value from
$4 million to $220 million in the space of one day as the meme was
split into 17 billion pieces, and famous artist Max
Denison-Pender’s live painting that was thrown into a volcano
shortly after its photo was taken. Typically, banks receive
deposits and lend money to account holders. DeFi uses code to
secure a contract so borrowers are able to borrow at much lower
rates, while those depositing are able to also get more bang for
their buck. This is made possible by removing the middleman, the
bank, out of the picture. The DeFi sector has grown exponentially
over the past year and seems set for steady growth in years to
come. With the rise of meme coins, stable coins, altcoins, it’s a
time where tokens are taking over from traditional forms of
finance. As with all burgeoning industries, the DeFi and NFT spaces
are progressing rapidly. So it comes as no surprise that the two
would eventually merge together. While NFTs are an asset, DeFi can
mobilize their value through secondary platforms. With DeFi, a
lender can determine the value of the collateral of the NFT. Unlike
traditional banks who decide how much the collateral is, DeFi
platforms allow the lender to make this decision. The loan is only
distributed once the owner decides on a price, market value, and
calculations. With the recent soar in DeFi technology that supports
loaning and financing of NFTs, it’s no wonder that Momento was
born, a platform dedicated to hosting memorable NFTs. One of the
most crucial components of Momento’s project is its commitment to
NFT staking. With the sales of NFTs accelerating faster than ever
before, it’s easy to see how the space would evolve into needing a
platform that was free from the control of banks and centralized
finance.
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