DeFi and NFTs are Synthesizing to Create the Next Blockchain Paradigm
DeFi (Decentralized Finance) and NFTs (Non-Fungible Tokens) originally came to the forefront of the blockchain industry as different sectors with their unique use case. Following the DeFi craze in the summer of 2020, users began to realize how both could be combined to unlock untapped potential, creating a powerful synergistic effect.
DeFi acts as the catalyst for generating high-yield reward and financial opportunities, the likes of which we’ve never seen before in the TradFi (traditional finance) realm. NFTs unleash new opportunities for artists and creators to showcase and distribute their work online, creating a seamless and borderless experience.
The way in which these two spaces have merged is a phenomenon that’s changed the blockchain and crypto worlds forever, stealing the spotlight in 2021 and destined for even greater potential down the road.
How exactly can NFTs be used and mobilized within the DeFi realm?
Ever since their meteoric rise in 2021, NFTs can become an integral part of DeFi, giving their unique properties as digital representations of proof of ownership. NFTs now allow for digital assets and services to become commercial and broaden their use case for applicability and monetization.
Although the majority of NFTs are being minted and exchanged on the Ethereum blockchain, they’re now being utilized across many other popular chains, extending their reach to eclipse the entire crypto market. This broadening of scope gives users more options to mint and transact these non-fungible assets, while also leveraging greater scalability and faster speeds given the current inefficiencies of Ethereum’s network.
Point blank, NFTs are a big deal. When they first emerged on the scene, they caught some eyes but didn’t receive the hype they necessarily deserved. However, once DeFi took center stage, NFTs soon followed suit.
Currently, marketplaces are what determine the value of NFTs, where participants buy and sell these assets through bidding. However, through DeFi, a new way to assess and determine the value of NFTs is emerging — lending.
In the TradFi (traditional finance) realm, banks have the ultimate say in calculating the amount of collateralization. DeFi flips the script in this regard, allowing lenders to determine the collateralization amount for NFTs.
But how would this work in practice? Borrowers can communicate the desired loan amount they require, in addition to the NFT they want to use as collateral for the transaction. In turn, the lender will determine the total value of the loan and collateralize NFT based on their own pre-determined metrics. Once the lender agrees to the terms, the loan is initiated — it’s completely decentralized and leaves the power in the hands of market participants.
NFTfi, a marketplace for NFT collateralized loans, offers users the ability to either put their own digital creations up as collateral for loans or to provide loans to other platform users. These small, short-term loans offer investors an opportunity to earn high-yield returns, providing a win-win situation on both fronts.
Digital Ownership & Rights
It’s without question that NFTs have solidified the concept of digital asset ownership for creators, securing their rights to their pieces and profits.
Fractional ownership also plays an important role in this space — each NFT can have its own shares, so investors and traders can purchase a portion of an NFT without full exposure to the asset. This is one of the benefits of cryptocurrency in general, given its incredible divisibility, and is being explored in more depth within the NFT realm.
Ownership is inherently important with any type of asset — it means you, and only you, are the true owner. Leveraging the fundamental components of blockchain technology, NFTs make verifiable proof of ownership easily accessible and secure.
Given the popularity of NFTs, investors across the globe are demanding alternative ways to receive increased exposure to these lucrative assets outside of physically purchasing these non-fungible items themselves.
Nowadays, there are various platforms and tokens that offer investors assets giving them broader exposure to the NFT market through indices, which are baskets of funds that track their respective NFT-based assets.
The NFT Index platform also has a token called $NFTI that serves as one of the most popular indices on the market and has soared in price since its inception. Through this token, investors can get the exposure they need to the broader NFT market without risking their assets in one particular cryptocurrency — the index does this by tracking each token’s circulating supply and total liquidity.
LOCGame: Introducing a New Era in NFTs
LOCGame (Legends of Crypto) is a new and exciting blockchain-based NFT game where players can engage in collecting and battling with their favorite crypto influencer and meme characters, represented through non-fungible assets. Collecting NFTs now comes with an added bonus!
Never before have NFTs been taken to this level — we’ve developed a fun, immersive, and high-rewards platform to attract crypto enthusiasts. With exemplary artwork, powerful gameplay, and rewards-based systems, the LOCGame platform provides an all-in-one experience like no other.
The pay-for-play game model allows users to earn our native $LOCG token while already playing, meaning you’re always earning passive income when participating. Whenever you are purchasing our unique NFT cards and decks within the marketplace, you also earn kickback in $LOCG — staking the $LOCG provides users with yet another form of passive income.
With these incredible DeFi perks, and knowing that our cards and decks are completely verifiable and owned by their purchasers, you can feel confident that our comprehensive platform is the go-to place to immerse yourself in the NFT world.
Synergy in Legends of Crypto
The key point to draw from the synergy of DeFi and NFTs is that new financial use cases are now available for these unique digital pieces of artwork. Creators and investors everywhere can leverage these benefits to embark on new financial endeavors, ranging from simple passive income streams to various forms of credit.
DeFi helps elevate and unlock the true value of NFTs — better yet, this is just the beginning for LOCGame and the entire non-fungible metaverse.
The only question remaining is, are you ready to become a Legend of Crypto?