Once upon a time, in a strange and complex binary kingdom, there lived a king and a queen who were giving the power back to the people. The rulers of the legacy system ignored them at first, then they laughed at them, and then…
Could that be a bedtime story in the not so distant future?
Unicorns, strange fantastic creatures, emoji memes, armors, weapons – this is what the evolution of the legacy financial system looks like today. A fairy tale, a fantasy you say..? Not in DeFiverse. From suits to hoodies, from childhood remenescence to the world of finance. CryptoKitties – a digital collectable was a great example of how value can be created out of a community effect. It doesn’t matter if you like it or not, understand it or not, where there is a market and people are willing to pay for it, value will discover itself. At the peak of the hype, some of these feline Non-Fungible Tokens (NFTs) were selling for over $110,000.
NFTs are unique tokens that are built on the Ethereum network. NFTs are like rare, one-of-a-kind collectables. Every single token is unique and can represent things like artwork, crypto collectables, and video game items. Just like rare post stamps or baseball cards are being sold in auctions, there is a market for digital collectables, and it’s growing fast. The recent spike of the DeFi market was certainly one of the key elements for the NFT market to gain such momentum. NFTs trades are usually done through Metamask – a crypto wallet and a gateway to many blockchain apps. It can be installed as a Google Chrome extension and is fairly easy to use, once you learn how to. Metamask is the main gateway to DeFi products and services. With interest growing in DeFi, naturally Metamask has boosted the number of its users.
DeFi meets NFTs
Since NFTs are attracting more and more attention, the value of digital art and collectables is growing as well. If it has monetary value, can it be used as collateral? The vast majority of DeFi lending protocols are collateralized. It is just a matter of time until we will see CryptoKitties, or any other NFTs being locked in DeFi protocols. A piece of art, digital land, or even tokenized real estate will allow you to borrow money against it. It is certainly exciting to watch who will take the lead in this race, as it’s a very profitable one.
DeFi Insiders MSH are a group of experts working in the heart of the movement. This is a live reflection of what is happening on a day to day basis. Nothing written in this article constitutes financial advice and does not reflect either the views of City AM or those of Crypto AM.