DeFi NFTS are the Next Big Thing


New generation DeFi models combined with NFT technology like can overcome the shortcomings of traditional finance and become adopted globally.

DeFi is no stranger to the crypto community and is forecasted to be the next trend of the cryptocurrency market.

According to Coingecko, the total decentralized finance market cap is already $116 billion, but a new innovation in the NFT market is could launch this value into the stratosphere.

DeFi Meets NFTs

The success of future crypto products will depend on their ability to engage both decentralized finance and non-fungible token users.

Since around the time of DeFi summer, NFTs have also gained an increasing share of Ethereum’s network activity, now spaning a range of active market segments, such as avatars, art generation, sports collectibles, virtual land and play-to-earn games.

The growth of NFT applications and rising on-chain activity makes them difficult to dismiss as an emergent asset class.

Source: CoinTelegraph and Nansen

Based on this chart we can see there is a large overlap between NFT collectors and power DEX traders. The more active a user is trading in DeFi, the more likely they are an NFT collector.

Source: CoinTelegraph and Nansen

DeFi needs NFTs and NFTs need DeFi

Asset ownership is deeply personal. Uniswap has already adopted this mindset by allowing users to customize automated market maker designs.

Led by protocols such as NFT20 and NFTX, NFTs are gaining financial utility by fractionalization and representation as tokens linked to DEX-based liquidity pools. Users can now gain exposure to digital art collections without buying individual pieces. The fusion of NFTs and DeFi is disrupting the very definition of non-fungible. 

Axie’s pools manage to successfully bridge DeFi and NFT subgroups over a seven day period. Source: CoinTelegraph and Nansen

“We believe that NFTs are the new financial technology. The potential of NFTs and the ERC-721 standard in DeFi are endless. The crypto-sphere moves fast. Before anyone knows it, NFTs will be implemented in every new DeFi project”. — DeFiFarms developer

DeFi Projects Having Success with NFTs

Axie-Infinity: possibly the biggest revenue-generating blockchain product, Axie combines a play-to-earn game based on scarce NFTs with liquidity pools for in-game items .

DeFi Farms: a decentralized finance project to use the ERC-721 standard token for yield farming on Binance Smart Chain

Source: DefiFarms

The success of future crypto products will depend on their ability to engage both NFT and DeFi users.


Sources:

https://cointelegraph.com/news/this-time-it-s-different-when-defi-meets-nfts

https://defifarmsnfts.medium.com/the-future-of-defi-11c4d1c95ee9

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