Pledge Protocol: Redefine the Financial Market with NFTs
What is Financial NFT?
NFTs or Non-Fungible Tokens are flexible digital assets that represent real-world objects, which can be bought and sold through an online medium, with the mode of transaction often being a cryptocurrency. These versatile digital certificates can be used as a tool instead of a symbol, especially in the world of finance.
Most people believe NFTS are all about digital art and collectibles, but actually the NFT era has just began, The founding team of Pledge believes the real niche for NFT usage will be Financial NFTs.
It is true that NFTs have taken the world of art by storm. For example, the now-infamous Beeple art piece was sold at Christie’s for a whopping $69 million!
Certainly, the versatile digital certificates called NFTs have become an increasingly popular means for buying and selling digital art over the last few years. The reality is that since NFTs are rooted in the blockchain, they make ownership of objects easily transferable, verifiable and interoperable. Those same qualities, however, make NFTs perfect for the world of finance — from insurance to bonds to tokenized assets and more. Pledge is bringing this vision to life through its own collateral-agnostic loan marketplace backed by blockchain technology.
Financial NFTs: The Future of NFTs
NFTs, combined with the qualities of decentralized finance (DeFi), can bring about a revolution, to create unique financial services. Already, there are several interesting use cases for NFT-DeFi combinations, with huge implications for current challenges, outlined below.
Decentralized Interest Rate Swap
Primarily used in real estate dealings, an interest swap or “refinancing,” is a less common practice compared to fixed rates or floating loans. These derivative contracts between two parties exchange fixed-rate interest payments for floating-rate interesting payments over a set time period.
However, several pertinent issues engulf the interest rate swap market, such as monopoly institutions controlling access to the market, huge fees levied by banks, lack of access to individuals, need for multiple registrations and licenses, market manipulation, and so on.
The solution? Using decentralization to create a stable, secure, and transparent marketplace that is accessible to all, and that has no room for lobbying or manipulation. Pledge’s initiative of DeFi Interest Rate Swap, allowing the use of NFTs as collaterals to power the ecosystem, is all set to bridge the gap between fixed and floating interest rate products without middlemen’s involvement or hassles.
Decentralized Bond Market
Similar problems abound in the bond market, such as the existence of too many intermediaries, variable and escalating costs, almost complete opacity, and manipulation of the market by certain lobbyists. A Decentralized Bond Market, focused on transparency and security that is guaranteed by the blockchain network, and combining that with the flexibility and uniqueness of NFTs can bring about the transparency and security assured by the blockchain network and the flexibility and uniqueness of NFTs, can bring about multiple benefits to bond markets in the future.
NFT bonds could help establish reliable digital currencies for banks, besides being much cheaper and safer compared to traditional money for transactions due to the utilization of the smart contracts, creating a decentralized trustless mechanism for both sides of the market. At the same time, banks could enjoy access to alternative forms of financing to digitize traditional asset vehicles. Reduction of intermediaries, high-level of interoperability, and uniform access to the market would be just some of the perks.This is the ultimate goal Pledge wishes to achieve with the opening up of fixed-rate decentralized lending.
A Revolutionary Platform for a Revolutionary Invention
Pledge’s mission is to provide longer-term financing in the crypto world. As a “crypto-asset lending platform for all”, we chiefly serve crypto-asset holders, helping them diversify their portfolio with non-crypto assets, such as real estate.
By deploying Financial NFTs to generate and represent authority, obligations and maturity for a specific set of bonds, Pledge’s comprehensive crypto-lending platform is breathing life into the vision of a decentralized bond market that can gradually guide the technology towards daily economic activities, despite geographic, economic and social barriers.
Cross Borders, Cross Industries, Cross Platforms
Pledge is on its way to shape a decentralized bond market through the introduction and implementation of Financial NFTs that represent authority. By minting the ERC-1155 standard NFTs, we are able to create one of the kinds of financial NFT assets to identify the traditional bond market. Where each token is unique by nature, and they are represented by ownership, obligations and yields of financial instruments.Volatile markets are prone to huge risks, and this is one of the major areas that Pledge aims to reform. Now various users can lend, borrow and spend without worrying about the hassles that come with floating rates over crypto liquidation.
Unlike traditional AMMs, Pledge uses Indimentional Automatic Market Makers (IAMMs) that allow simultaneous staking between pools for sustained liquidity across platforms. Pledge is built on the Binance Smart Chain (BSC) and powered by PLGR tokens that allow seamless interaction among all stakeholders.
Putting an end to Market Volatility
Ensuring appropriate forecasting and risk management for digital transactions, Pledge is replacing unpredictable and volatile markets with the reliability and transparency of blockchain. The platform’s next-generation fixed-rate lending protocol is set to put an end to unstable markets that leave customers enshrouded in uncertainty.
Spearheading a Sustainable Shift
That the DeFi sector is in dire need of sustainable and stable solutions cannot be questioned at all. Combing DeFi’s freedom from third party involvement and the security of NFTs allows Pledge to bring consistency and stability to even non-crypto assets, such as real estate, for investors.The creation of its agnostic marketplace has helped Pledge move closer to this vision.
What the Future Holds
The catch is that the tokenization of digital art is just one out of the many prospects that NFT can have in the times to come.NFTs don’t have to just be about digital pictures of rocks, kittens, and whales. Tokenization is an under-utilized tool that can revolutionize the financial world, not just the digital one. Because NFTs act as a secure record of who owns what, essentially creating digital real estate, it can bring unprecedented security to real-world real estate without the need for governments or banks. Because their creation and value can be algorithmically managed, they can stabilize the bond market to provide safe investments for everyone. Pledge isn’t just another crypto financial system, it aims to make crypto the financial system for the world.
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