According to incomplete statistics from Nansen, from the beginning of 2021 to February 2022, the number of NFT projects has increased by 2,000 times, and new PFPs appear every day, but the market performance is not healthy.
1 out of 3 projects had little to no trading activity, and 1/3 had breakouts. The homogenization problem of NFT is serious. Every startup must have a whitelist process, and WL lottery activities are flooding on Twitter. The usage scenarios of most NFTs are the same and nothing new.
first level title
NFT+ virtual gallery, PFP as exhibits
text
A corner of the ONCYBER virtual pavilion
ONCYBER represents NFT galleries with relatively pure functions, most of which are 3D/VR/virtual pavilions. Users can get an immersive experience. Curators can convey their own technological and artistic aesthetics to the audience.
text
isotile social renderings
text
SuperRare user NFT profile
The gallery is the most direct usage scenario for image NFTs. In real life, there are galleries in every city, and exhibitions are held from time to time. Galleries can be said to be a common way for human beings to express aesthetic views and thoughts.
first level title
NFT+ metaverse, PFP as avatar and equipment
Decentraland is a very typical NFT metaverse. Through keyboard and mouse operations, users can run in the vast virtual space, enjoy the landscape from various perspectives, and visit buildings with different appearances and functions.
NFT is mainly used to carry land, wearable equipment, items, etc. in Decentraland. Here, you can deeply appreciate the composability of NFT as an asset on the chain.
text
Front view of Decentraland Axie Infinity
text
World of Women at The Sandbox NFT Institute
Based on this composability, more and more PFP projects have reached cooperation with Metaverse. They buy land and real estate in the metaverse, and hold various activities.
NFT is no longer a static asset in the Metaverse. Players, brands, and project parties have created UGC based on NFT, giving NFT and Metaverse new gameplay.
Async Art and Maker Virtual Pavilion
Another feature of the NFT Metaverse is the integration of chain games and DeFi elements. Among the 31 NFT metaverses counted by Beep News, half of them involve chain game gameplay, and 5 involve DeFi gameplay.
Take Aavegotchi, for example. Flagship game The Gotchiverse is a P2 E NFT RPG. Users swim in the metaverse, harvest Alchemica, build equipment, and fight with liquidators, which is a typical chain game gameplay.
At the same time, the Aavegotchi ecosystem supports token staking and NFT leasing, and will launch a DEX called GAX in the future to trade game tokens. These all reflect the attributes of DeFi.
It can be seen that the NFT metaverse provides a place for chain games and supports more complex interactions between players. And DeFi can promote the circulation and value-added of NFT assets in the Metaverse.
In addition, Beep News observed that most of the NFT Metaverse is a hybrid, with NFT transactions, blockchain games, and DeFi functions. Land auctions and leases have become the start-up plan for many projects.
first level title
NFT-Fi, PFP embedded in DeFi Lego
NFT-Fi is currently the most operable PFP application scenario. Through statistics, Beep News found that the subdivision functions of NFT-Fi mainly include four categories:
1. The lease of NFT assets, including the lease of metaverse real estate, equipment, and the right to use NFT avatars.
Double is a representative of the NFT leasing project, and the App already supports the leasing of Decentraland plots and real estate. By selecting the lease term, price, category, geographical location, and size, users can filter out the virtual land and real estate they need.
Virtual Lot, Property Lease Interface in Double
Second, the transaction, pledge, and farming of NFT or NFT fragments.
Fractional and NFT20 are representatives of NFT fragmentation attempts. For example, a user pledged 22 Cyberkongz NFTs on NFT20 and minted 2200 KONZG20 tokens. Each KONGZ20 represents 1/2200 ownership of the NFT. These KONGZ20 can also be traded and farmed on Uniswap.
NFT fragmentation case on NFT20
In order to solve the problem that NFT cannot be reorganized due to the loss or inability to buy back NFT fragments, Fractional also proposed the Buyout Auction mode.
Third, obtain loans by pledging NFT.
Representative projects include Arcade and Strip Finance. Take Loan Bundle 19 on Arcade, for example. User A mortgages BAYC #4743, publishes a loan demand of 180 WETH, and provides an APR of 18.25%, and the loan period is 90 days.
Suppose User B is satisfied with this offer and offers User A a loan. Then after 90 days, if A can return the principal of 180 WETH and pay the interest of 8.1 WETH as scheduled, he can get back BAYC #4743. Otherwise, BAYC #4743 will be assigned to User B.
NFT-based loan demand on Arcade
Due to price fluctuations, the NFT loan market often sees the underlying assets being liquidated. Platforms like X Carnival have also specially set up a trading market for clearing NFT, which is convenient for users to pick up and miss.
Fourth, crowdfunding to purchase NFT and provide loans for the purchase of NFT.
Bridgesprit supports small groups of users to bid on NFTs. The PINE project supports providing loans to users first, allowing users to raise funds to purchase NFT. After the user pays off the loan, the NFT is released into their wallet.
In the encrypted world, there are no perfect solutions to NFT pricing, price fluctuations, liquidity fragmentation and other issues, which has led to the delay in finding an outlet for the financialization of NFT. However, we have seen many attempts. In the future, these difficult problems may be solved with hundreds or even dozens of lines of code.
In the real world, the participation of physical assets (non-homogeneous assets) in the financial market is not inferior to that of cash and stocks (homogeneous assets). In the encrypted world, we should also believe in the potential of NFT-Fi.
NFT + Proof of Stake, PFP as Club Pass and Web3 Social Entrance
A project in the crypto world that has fully exploited the functionality of NFT club passes is Bored Ape Yacht Club.
By airdropping mutant ape serum, BAKC, and APE to BAYC holders, and providing BAYC holders with the right to purchase boring ape T-shirts, Apefest and real yacht party participation rights, etc., BAYC has built a vibrant community and has become an NFT The most reputable item in the market.
Community spawns BAYC-based comics, sitcoms, streetwear, wine gameplay
In the Web3 social scene, projects such as POAP only issue NFT badges to active users on specific chains, so NFT has become a good user classification label.
Summarize
Summarize
If the development of NFT only relies on storytelling and hopes to resonate with certain social groups, its value will not be sustainable.
NFT as an exhibit in the virtual gallery, NFT as an avatar equipment item in the metaverse, NFT as an element embedded in DeFi, and NFT as a proof of equity may be four important paths for the further development of the PFP project.
