NFTs rule the Metaverse
From fractionalization to renting and lending, NFT financialization services are rapidly emerging to expand the Metaverse economy
The use cases of NFTs have proliferated to cover diverse industries, from fashion to finance to real estate. The creation of the Metaverse economy at the center of which NFTs are crowned as the technology behind all assets in the virtual realm has led to immense growth in the concept and to what many consider an inflated valuation. However, blue-chip or highly-valued NFT holders have been struggling to generate passive liquidity from their assets, which serves as a further disincentive for mainstream adoption and for newcomers to invest in NFTs.
Several NFT financialization pathways have been explored and set in place to increase liquidity and help NFT holders make money without having to surrender their cherished CryptoPunk, Bored Ape, and many others. So hop on to the Zumer express and join us on a journey into the Metaverse wonderland to explore the different methods built to increase NFT financialization.
NFT Fractionalization
The ownership of blue-chip NFTs has long been reserved for the wealthy of the crypto world, as sky-rocketing price valuations have driven away any hope of less economically-privileged enthusiasts taking part in the process. NFT fractionalization has thus been implemented to divide blue-chip assets into a number of shares that can be bought and traded separately. Fractionalization projects such as Fractional and Unicly allow holders to lock their blue-chip NFTs or NFT collections into a smart contract and get 100% shares in the form of ERC-20 tokens that they can later distribute as they please. Fractionalization provides a win-win model for NFT holders who want to generate liquidity without losing their assets and investors who seek ownership of household name collections without having to spend hefty sums. That said, is there any real demand for fractionalized NFTs remains a question to be answered by the market as there are other more convenient tools in the market for buyers who own the blue-chip NFTs such as the BNPL payment option. The latter would give the buyer 100% of the utilities of holding the NFT instead of a portion of it from the fractionalized share.
NFT Rental
The rapid and exponential growth of the Metaverse economy, namely in the gaming and real estate industries, has led to a parallel increase in the number of NFTs being created to serve as a utility token to join guilds and communities and earn passive income. The demand for an NFT rental service to serve the needs of community members who are just looking to avail themselves of the short-time utility of NFTs resulted in the creation of NFT rental platforms such as Double and Rental. Dual-role settings, differentiating user and owner, and distinguishing ownership and utility through designated wallets, are some of the techniques designed to fit the needs of both NFT landlords (owners) and users (e.g. GameFi scholars)
NFT rental has decreased the barrier to entry for enthusiasts seeking to join guilds without having to pay the strapping price of an Axie or a Cool Cat while offering an easy way for holders looking to generate passive income from their idle NFTs.
NFT Lending
NFT Lending has emerged as a pillar use case of NFT financialization necessary to set in motion a robust and dynamic Metaverse economy. Whether you choose NFTfi’s peer-to-peer or Zumer’s peer-to-protocol lending systems, the process will allow citizens of the Metaverse and blue-chip NFT holders to get instant liquidity when collateralizing their assets while providing liquidity providers with a model to earn a fast yield on their tokens and have the opportunity to buy blue-chip NFTs at a major discount in the case of a default.
The positioning of Zumer as the investment bank of the Metaverse will catalyze the economic growth of our increasingly digital world — Metaverse and accelerate the mainstream integration of its services. While venture capital firms are providing equity capital to the Metaverse, Zumer is building the infrastructure needed for the growth of debt capital within the Metaverse. The citizens of the Metaverse will have a trusted partner offering seamless and fast loan generation to finance their projects and derive the liquidity they require for a dream life in the digital realm.
