Read my original article at Voice.
In Part 1 of this series (The world of NFTs: Part 1 — The Present), we talked about how NFTs have become very popular in the gaming, digital art industries. We also talked about how Binance is leveraging Enjin NFTs to build a strong community. In this series, we will talk about some more interesting use cases. We will also discuss what the future will hold for NFTs.
1. Sports: Blockchain is penetrating sports with some unique solutions in fan engagement.
a. Chiliz: Chiliz provides sports entities with blockchain-based fan engagement tokens. The Socios platform backed by Chiliz issues official Fan Token of famous clubs. These fan tokens give users the right to vote in club matters and access to exclusive content and access to matchday tickets. The recently sold $BAR Tokens has gained huge popularity.
b. Sorare: Sorare is a blockchain-based fantasy soccer platform. Player cards are sold as digital collectibles. Users can participate in competitions with such cards and also sell them in the marketplace.
Source: Sorare
2. Domains: If you follow the crypto-twitter of famous people most of them have a ‘.eth’ domain name. These are crypto addresses sitting on top of the actual alphanumeric addresses. Long addresses have always been a problem and it is possible now to set up simple addresses for your wallet account.
a. Unstoppable Domains: Unstoppable domains provide ‘.crypto’ and ‘.zil’ domains. It also gives the user ability to create their basic websites. Users can link their domains to these websites. A standard domain generally costs between $40-$80. No renewal is required
b. Ethereum Name Service: Ethereum Name service provides ‘.eth’ domains. These domains need to be registered and renewed. The price is directly proportional to the number of alphabets in the domain name. A 3 digit domain name may cost anything between 1.5–2 ETH.
3. Decentralized Finance: NFT till now was valued due to rarity and specific use cases. We are now entering an era of solutions that combines the power of NFTs with that of DeFi.
a. NFT as Collateral -Aavegotchi: Aavegotchis are crypto-collectibles backed by the ERC721 standard. Aavegotchi’s value is derived from three factors — collateral stake, traits, and wearables. Each Aavegotchi ERC721 NFT manages an escrow contract address that holds Aave-backed ERC20 collateral, or “aToken” (aDAI, aUSDT, aLINK, aLEND, and aSNX). aTokens generate yield via Aave’s LendingPool, which increases the number of aTokens held in the wallet. Thus, the amount of aTokens held in the Aavegotchi’s escrow address grows over time.
Source: Aavegotchi Lite paper
b. NFT as rewards for LP Mining -Don’t Buy Meme: Donybymeme is a hugely popular project which has successfully merged NFTs with DeFi. It works a bit differently from Aavegotchi. Users need to buy MEME Tokens and stake either MEME directly or ETH-MEME LP tokens. In return users will receive limited edition NFTs
c. Insurance: Insurances can be tokenized. Tokenized iyearnfinance insurance policies are currently being sold in Rarible. These policies protect users from smart contract vulnerabilities. They can be transferred, bought, and sold in secondary markets.
d. Mortgages: Work is going on tokenizing Real Estates. Once the same is brought to the market and provided favorable regulatory compliances, DeFi will open up for mortgages.
NFTs are being explored in other areas also. These include event ticketing, raising funds, use as a social currency, release music, and video NFTs, etc. There is an inherent problem with Ethereum congestion which has resulted in gaming not kicking off fully. However, as Layer 2 solutions are being increasingly popular this problem will be resolved soon. Watch out for this space!
I would appreciate it if you leave your point of view in the below section for further discussions.
References: SSRN, Opensea Blog, DCL Blogger Twitter, Nonfungible.com
Read More: The World Of NFTs: Part 1 — The Present
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