The challenge of NFT utility
One of the key challenges yet to be addressed by the existing market solutions for NFTs is utility. The explosive growth of NFTs is mired by the lack of long-term solutions, generating the risk that a significant portion of NFTs minted and sold today could be essentially worthless within 36 months. Scanning the roadmaps and whitepapers of large NFT projects, there’s a notable absence of how the project plans to deliver value long-term. While this doesn’t conclusively confirm the lack of consideration to long-term utility, this absence should be viewed as a significant red flag to users.
Unsustainable growth is driven by a mixture of speculation and hype — and institutional players in music, film and sports are more than happy to ride the wave to earn short-term pay-outs. Yet the challenge remains that without utility, buyers cannot yet leverage their NFTs after purchasing them.
ZooDAO’s Solution
The market is primed for a paradigm shift and third-party solutions to the utility challenge. This is where ZooDAO comes in. With our NFT-agnostic, accessible platform, NFT owners can leverage their NFTs participate in battle, and more importantly be rewarded with yield through the battle mechanism and with NFT staking.
Transforming NFTs into a long-term sustainable model with ZooDAO responds directly to the desire for a utility-driven future of NFTs, with all NFT projects brought along for the ride.
An existing solution for an emerging challenge: $DAI
Generating continuous, long-term value for NFTs is dependent not only on the method by which value is generated (i.e. staking), but also on the outputs of that method. It’s essential that the yield generated for users have a recognized value, be widely accepted in the market and provide long-term stability to protect the value of users assets.
Enter $DAI, the industry-leading stablecoin.
While quietly operating in the background of many projects, the enormous value of $DAI is realized in the absence of volatility. Maintaining a free-float peg to the US Dollar, $DAI delivers a price-stable currency without barriers, backed by decentralized governance mechanisms.
Allowing users to generate yield on their NFTs in $DAI is the ultimate long-term solution to generating utility and value. No matter the market conditions, the yield generated from staking an NFT in ZooDAO’s platform will continue to hold its value. $DAI provides a distinct advantage to users by securing returns on their assets in a token which is widely accepted, may be re-invested or indeed re-staked.
ZooDAO + $DAI
$DAI plays a major role throughout the entirety of ZooDAO’s NFT Battles, first as a method for users to vote on an NFT, and as the reward for participation. Integrating $DAI also provides a level of security to the dApp by protecting the insurance and gas pools against volatility, ensuring that both of these critical support mechanisms are predictably available to support ZooDAO’s users.
$DAI was also been chosen as the most suitable token for the ZooDAO Balancer LBP. For more information on the LBP, see this article.
About $DAI
$DAI is collateral-backed currency whose value is pegged to the US Dollar and kept stable through a framework of aligned financial incentives.
The $DAI token lives on the Ethereum blockchain; its stability is unmediated by any central party, and its solvency does not rely on any trusted counterparties. All circulating $DAI are generated from Maker Vaults and are backed by a surplus of collateral assets.
$DAI is used in the same manner as any other cryptocurrency: It can be freely sent to others, used as payments for goods and services, be held as a hedge against market volatility, and much more.
The decentralized world has offered the ZooDAO team an enormous amount of support in building our platform to meet our vision of greater purpose for NFTs. We would like to acknowledge the support of the Maker Growth team in assisting us in integrating $DAI, providing us input and advice and for advocating for greater NFT utility. We seek to pay this favour forward, and invite devs from other projects seeking to build utility for NFTs to get in touch with us to share best practices and advice in integrating $DAI.
