DeFi Use Cases of NFTs!

Most NFT enthusiasts are familiar with the financial benefits that win-win games bring. Some of these benefits include collecting the game's native tokens to unlock new NFT assets. It is also possible to stake NFTs to earn interest. This is thanks to the cooperation between DeFi and NFTs. However, there are many other ways NFTs can be used in the DeFi sector.

Simply put, these are NFTs that have the ability to hold other assets. A nested NFT can hold both fungible tokens (ERC-20) and non-fungible tokens (ERC-721). As a result, we can think of them as a basket of various Blockchain assets and tokens. This flexibility opens up new financial uses. For example, you can build a crypto portfolio using a single NFT. Charged Particles works with the concept of nested NFTs. It also allows the creation of NFTs with new financial features. Artists can release content gradually thanks to the time-locking function. It is also possible to design joint NFT projects that split revenues between wallets. NFT holders are allowed to create portfolios. It also adds a social element to the mix. Users can copy each other's portfolios to track the same investment performance. The protocol shares royalties with the owners each time their portfolios are copied.

Loan Collateralization

Decentralized lending is a huge space in crypto circles. Market leaders like Aave and Compound provide loans in exchange for depositing cryptocurrency as collateral. While not widespread, some DeFi protocols accept NFTs as collateral. A good example is Stater. On this peer-to-peer open-source lending platform, a borrow package can be created from NFTs in a crypto wallet. It is possible to use a single NFT as collateral. However, if multiple assets are used, the chances of getting a loan in ETH increase by increasing the total value of the collateral. Lenders choose one of these borrowing packages to provide liquidity for loans. If the borrower does not repay the collateral in full, the lender claims ownership of it. Another platform that implements a similar concept is NFTfi. The platform offers NFT-backed loans distributed in wETH and DAI currencies. Recently, an exciting incident with NFT collateral occurred on the NFT lending platform Metastreet, where a borrower received an $8 million loan by lending 101 CryptoPunks NFTs.

Fractal NFT

Combining DeFi concepts with NFTs strengthens the decentralization of NFT marketplaces. Fractal NFTs play a central role in achieving this as they enhance the mechanisms for buying and bidding. The splitting of a single NFT into multiple parts is called a Fractal NFT. This process is particularly meaningful for high-value NFTs that are not suitable for most investors. For example, fractals make it possible to own a work of fine art. Fractal NFTs cannot be split in the ERC-721 format that most NFTs use. Through smart contracts, it is possible to create multiple ERC-20 tokens and link them to one ERC-721 token that represents the entire NFT. As a result, each ERC-20 holder will own a piece of it. The best-known platform for fractal NFT trading is Fractional, where NFT holders can mint NFT vaults and receive ERC-20 tokens representing 100 percent NFT ownership in return. Holders can utilize these ERC-20 tokens in DeFi applications to earn rewards without selling the NFT. It is also possible to sell fractions on the platform. Interested buyers must make bids equal to or higher than the reserve price to obtain the entire fraction.   Source: nfxhaber.com Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!