Author: Five Fireball Leader / Source: Vernacular Blockchain
Author | Five Fireball Leaders
Produced | Vernacular Blockchain (ID: helloBTC)
2020, Defi Summer.
In 2021, NFTs will shine.
In 2022, Defi will be completely extinguished, and NFT seems to have begun to die after experiencing a surge in the past few months.
202X, Defi + NFT?
It is actually difficult for us to say the exact time point, maybe 2023, or even longer, and it may come in the second half of 2022. At present, dozens of projects have launched explorations in this area. Although none of them have dominated the market at present, and there are few with high market value, the emerging track should be like this . The only thing that cannot be denied is that NFT Defi will be an inevitable trend.
This article will take stock of the current sub-categories of the track category, as well as relatively representative projects.
01
ERC20ization
This is the simplest and crudest idea: Isn’t NFT liquidity bad? Let’s turn him into an FT, won’t it be over? !
Become FT is divided into two variants:
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Transform into Dafa – NFTX
NFTX is probably the easiest to understand in this track. You deposit NFT, and I will give you a VToken (Erc20). This VToken can be sold directly to ETH on Sushiswap (with liquidity providers), and will also redeem your original NFT in the future. Or the credentials of the same series of random NFTs in the pool.
In fact, the loan generation mentioned later is a bit similar, but the implementation method is different, and it is somewhat fragmented, because on Sushi you can buy and sell part of the Erc20 Vtoken, you can’t buy monkeys or Punks, there are long-term prospects For these two projects, you can go to Sushi to buy monkeys or part of Punk Vtoken, and you can also enjoy the value-added of these two NFTs.
What is even more commendable is that composability is much easier because of ERC20ization. Some time ago, NFTX and FutureSwap cooperated to launch blue-chip NFT-based perpetual options.
At present, the NFTX mode is one of the most intuitive and promising subdivision tracks of NFT+Defi.
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Fragmentation – Franctional.art
Although NFTX is good, it is mainly aimed at floor NFTs, because if you take a high-priced rare NFT in and exchange it for Erc20 with the same floor price, wouldn’t it be a big loss~
Just like Punk, no one will throw alien punk into the pool to exchange VToken unless there is a separate alien punk pool.
Projects like Franctional are especially suitable for this kind of single, special high-priced model. Come in and agree on how many pieces (Erc20) I will split for you, and then throw them on Dex, which not only plays a role in pricing, but also releases liquidity . What’s even more rare is that you can also gather some diehards to be a community, and conduct airdrops based on the holding of fragments, or like NFTX, you are optimistic about certain projects for a long time, but you can’t afford the whole, so it’s OK to buy some fragments for investment. .
02
Peer-to-peer lending – representing projects NFTFI, Arcade
In the ERC20 era, peer-to-peer borrowing is an elimination mechanism.
Because peer-to-peer is more like an OTC matching platform, it requires a high degree of matching on both sides, and the settings of various parameters are very complicated. It can be said that it is completely unfriendly to ordinary users, and the liquidity is also very poor.
Etherlend was almost cool when it was a peer-to-peer model, and later changed to a peer-to-peer model + changed its name to AAVE, and it skyrocketed.
However, NFTs may not be the same. NFTs have many features that FTs do not have.
In the simplest terms, Punks and monkeys cannot form a pool, and alien punks and ordinary punks cannot form a pool. The many unique rare features and pricing mechanisms of NFTs lead to many restrictions on the pool, and the liquidation in the event of a drop in the bottom price of the pool. , and it is difficult to guarantee that players can get back their original NFT. After all, this is not the fall of ETH. Which ETH you redeem in MakerDAO is the same.
Of course, what’s more important is that the current reserve price is clear, and NFTs with good liquidity can be counted in one hand. Most of the NFT liquidity is even difficult to price to get a pool. .
03
Peer-to-Pool Borrowing – Representing Project JPEGD, Bend Dao
This is the future of NFT Defi that many people have high hopes for.
There is no other reason. Compound and AAVE hold up half the sky of Defi. Of course, people hope that there will be one or two similar platforms, similar models, and similar achievements in the field of NFT borrowing.
The gameplay of peer-to-peer pool borrowing is basically the same, limited by the current NFT blue-chip and liquidity constraints, basically everyone is doing the borrowing of several projects such as Punk, Monkey, Azuki, Dooodle, and other NFT projects, basically Not eligible to open the pool…
Of course, there are differences. For example, JPEGD owns a PUSD, and there is a pool on Curve. After your NFT is deposited, it will give you PUSD. They also have an insurance mechanism to ensure that users can redeem themselves in the future. The NFT is also quite innovative.
BendDao steals Curve’s Ve model, which directly raises the level of governance . If the project really becomes the leader in the NFT borrowing field in the future and more NFT blue chips emerge in the future, will BendWar appear? This is still a bit of a wait-and-see.
04
Pricing – representing projects Chainlink, Abacus
The hard part of NFT Defiization is – how to price NFT?
At present, most projects are very simple and rude to use an oracle like Chainlink to get the floor price directly from Opensea.
But there are actually many ways of pricing.
For example, NFTX, if the liquidity of ERC20 is sufficient, it is completely possible to set the reserve price of the pool through the exchange game.
Franctional.Art can set the price of a single complete NFT through the exchange game of fragments.
There are also pricing projects like Abacus, which have also invented two unique pricing methods . One is an industry evaluation similar to CCTV’s “Treasure Hunt”, and the other is an extremely complex option + Dutch auction model, both of which are only suitable for a single NFT. Here Due to the limited space, I will not start talking about it. Those who are interested can search for information on their own.
In addition, there are various mechanisms such as weighted average price and AI algorithm pricing, all of which are being explored .
05
Summarize
NFT Defi is still in a very, very early era.
After all, NFT itself has only been popular for a year. It is still in the early stage, and there are only a few blue chips.
This also leads to a situation where there are more wolves and less meat . There are dozens of NFT Defi projects, and almost all of them are focusing on blue chips, while there are only 5 or 6 blue chips, and each address is around 4,5,000. , that is to say, the number of people who hold these blue chips is at most 20,000 or 30,000. In addition, the addresses of several blue-chip owners overlap and some players have multiple addresses. The real holders of these 5 or 6 blue-chips are estimated to be Just 1-2 million.
Although NFT option contracts or fragmentation should be able to be extended to non-holder users, as mentioned above, these ERC20-based, borrowing and other mainstream NFT projects are basically competing for these 20,000 “big players”. ” In other words, even if you are the number one on the track, the current ceiling is the number of users. Compared with Uniswap, the number of users like AAVE is completely different from the same order of magnitude.
Defiization of NFT may depend more on the development of NFT itself rather than the development of NFT+DEfi . After all, the arts in the field of NFT are declining, and no one cares. Music has never been popular, and the only thing that is really popular is that A few small pictures + the pie of the metaverse drawn for you behind the small pictures.
When everything is NFT, NFT Defi will naturally grow into a towering tree.
2023, 2024? We will wait and see!
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