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What would make the NFT turn around?

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NFT is trying to break the ceiling of DeFi market growth.

Original title: "Aesthetic Fatigue" difficult to get out of the circle? How to fight NFT turnaround"

Source: PANews

DeFi's play comes to a screeching halt as the market looks to NFT to pick up the pieces, and NFT (non-homogeneous tokens), once famous for crypto cats, is trying to break the ceiling of DeFi's market growth. However, this not new concept does not seem to be DeFi's "survival" medicine. How will NFT "build back" make its c-bit debut?

The DeFi+NFT market's one-two punch got off to a quick start

Over the past two years, the NFT market has seen steady growth, with the emergence of collectibles, games, digital art, domain names and other applications, as well as a number of large companies and well-known IPs testing the waters.

On Oct. 8, The 21st Block 21 in the Painting of a Mind series sold at Christie's in New York for $131,250, the highest NFT auction price and beating the expected $12,000 to $18,000 price range.

Morgan Creek co-founder Anthony Pompliano has previously posted that he and Jason Williams will be investing heavily in digital art in the coming months and years. Digital art is superior to traditional art in almost every respect: it is easy to transmit, can be programmed to change all the time, is not vulnerable, and can be verified for authenticity and transparency of origin. Although digital art is now worth less than $10m, compared with more than $60bn for traditional art, the market value of digital art will continue to grow.

As the NFT's value is being discovered, it is quietly showing signs of growth, but it may not be ready to take off again. Meanwhile, DeFi, which has been in the limelight, is starting to see a cooling trend and needs fresh blood to open up the market further. However, the collision between NFT and DeFi unexpectedly brought new development vitality and possibilities to each other, and many "NFT+DeFi" projects quickly became the hottest "web celebrity" at present.

On the whole, currently NFT+DeFi project can be divided into three categories: the first is DeFi project, which introduces the concept of NFT, such as MEME, Dego, etc. UNI in front, Dego behind, once "air drop fever" reignited. Recently, the modular design of DeFi project DEGO's air-drop campaign went viral in a very short time and became a hot topic in the circle overnight. To acquire DEGO drops, users need to follow DEGO on Twitter and on the user account, bind to the user name, and enter the ERC-20 address (for a Gas fee). High - level NFTS such as diamonds and kryptonite have been sold off the market for hundreds of thousands of dollars, and DEGO prices have continued to rise, which has had an eye-grabbing effect. Since the NFT airdrop received is of random quality, there are not a few participants in the "one knife for a dozen handling fee".

The second type is to mortgage NFT for DeFi mining, such as WHALE and Cargo. Take WHALE as an example. WHALE is a project initiated by WhaleShark, a famous man in the FIELD of NFT collection. The creator can pledge valuable NFT works as collateral to obtain WHALE tokens. For the first three months, the WhaleShark community rewarded 10 WHALE creators with 2,000 whales a month. Nonfungible team of WhaleShark Vault, according to the latest audit Vault is now a total of 59 3212 NFT assets of the project, the total value of about $940000. The price of WHALE tokens has soared, rising 14.2 per cent in the past month on the back of a liquidity mining scheme.

The third type of NFT platform introduces trading - mining or liquidity mining - such as the recently popular Rarible, an NFT trading platform launched this year that allows users to coin or trade digital collectibles. In just two months since Rarible announced its governance tokens and launched a liquidity mine, it has surpassed Opensea, an established NFT trading platform, in terms of volume and sales of more than $5 million in September.

In the encryption market, these three categories are very popular, and there is a lot of room for appreciation. CoinGecko data showed that nearly 7 days, the NFT plate was generally rising. However, OKEx Research principal William thinks such high returns are unsustainable. He points out that the recent boom in NFT+DeFi, represented by MEME and WHALE, is due to the high returns from liquidity mining, not NFT or DeFi itself. But sooner or later, as with many projects that prosper but eventually go quiet, the bubble will burst.

Although THE development prospects of NFT+DeFi are quite limited, the fire of MEME, DEGO and other projects has also brought a new concept GameFi to the cryptography market. "At present, the mainstream of DeFi is still the TradeFi around trading. In the future, DeFi may enter the GameFi which is more gamified. In the future, DeFi's monetary policy may become more gamified, and users' money will become the equipment used by DeFi games." ... and forever, "Andre Cronje, founder of Yearn Finance, tweeted not long ago.

Wallet, the development tendency for the wheat product owner told PANews land far away, "in my opinion, GameFi concept before there is ironic DeFi gaming this things, emerging application of massive liquidity dig the standard have become like a copy of the DeFi, DeFi players into the game player. The player on the front end, contracts, audit endorsement DeFi judgment involved, then DeFi is the front end of the game UI, style elegant delicate game can always attract a large number of players, DeFi contracts is the difficulty of the game design and a copy of the design, Choice Pool1 still choose Pool2, lossy and lossless belongs to the design of the game. The audit endorsement and security agencies like giant product must belong to the competitive products, become a judge players to choose a dimension and belongs to a game can critical determinant to the fire. Can start all over again, and play different master GameFi once stepping into the pit of hell difficulty copy will never lost the equipment (assets). Players one god put full circulation in the copy one by one, the novice players as difficult land clearing time gains may be not enough Gas fee, Game and blockchain are very cruel."

Fluid mining has become "aesthetic fatigue" and NFT requires high production and new creativity

In DeFi's world, the blocks are like Lego blocks, round or square, which can be combined into a variety of financial products and services, and this kind of block thinking has a great reference for NFT.

At present, the DeFi is with homogeneous BTC, ETH tokens (Fungible Token) as the underlying assets, and NFT as assets, based on the block chain also applies. Once NFT's infrastructure is perfected, possibilities will be spelled out like DeFi Lego. At the same time, DeFi liquidity Mining not only solves the age-old problem of NFT liquidity, but also provides more trading channels for NFT. Of course, NFT introduces scarce assets for DeFi.

However, while NFT+DeFi brings new possibilities, some problems are emerging. As an example of Rarible mentioned earlier, in July, Rarible announced the launch of Governance token RARI, which allows users to mint, buy and sell digital collections without any coding skills. RARI allows the most active founders and collectors on Rarible to vote and participate in the management and review of any platform upgrade, but RARI does not sell on the platform and can only do so by actively participating in the platform, a process the team calls "market liquidity mining." Soon after, Rarible saw explosive growth and became the largest platform for NFT digital collections. According to Opensea-IO, Rarible has reached 2392.5 transactions in the past 7 days and 19210ETH in total. Although Rarible has experienced a sharp drop of 7.6% in the past 7 days, it still ranks first.

But is Rarible really a late comer? "Rarible volume is all washed out, don't" head "it." DappReview CEO NiuFengXuan said. Indeed, Rarible co-founder Alexander Salnikov admits that about 40% of Rarible's $750,000 NFT trades in August involved some kind of wash trading.

Purging is a form of market manipulation in which traders create the illusion of high liquidity in the market by buying and selling the same digital asset at the same time. Trading volumes are known to be the best measure of market sentiment and an important indicator of an exchange's true strength, making the distortions caused by a purge over the past few years all too common.

In addition, the governance problem is also very serious. In fact, in many cases, it is difficult for the system to accurately judge users' evil motives and behaviors, so it is difficult to design a perfect governance mechanism to make the linked data become verifiable real data. For example, Niu Fengxuan, a senior NFT player mentioned above, was once blocked by Rarible and had no way to complain, which meant that these people were deprived of the right to vote in governance.

"Inspired by dig and high yield of liquidity distortions. When there is no high revenue incentive, cleaning trade, reciprocity and mutual benefit, trade problems will be readily solved. Before that, to solve these problems, trading platform can only by raising the screening and users to improve the poundage, such as works of art in general will not be traded for many times in the short term, the user can then identify mutual benefit, by collecting cleaning blacklist trading address and also can inhibit the deal." Faced with problems, William told PANews.

So can the DeFi+NFT fire get any hotter? Distant lu believes that DeFi concept is dig and rout of liquidity, as investment and speculative indistinguishable, DeFi and liquidity mining application as a whole, liquidity mining mode gradually by the user familiar routines, micro innovation unsustainable market needs a new direction, whether liquidity mining or NFT + DeFi, nature is DeFi based gameplay and dig out the market liquidity, the liquidity of disloyalty to dig and aesthetic fatigue, liquidity on the project market most players lose loyalty. Participation in THE NFT+DeFi interaction should also be more playable, expecting more production and creative NFTFi to emerge in the market. GameFi or DeFi in the current market has properties greater than NFT.

At the same time, he adds, NFT+DeFi doesn't feel that fresh, and the heat is a partial application rather than the entire NFT circuit. NFT+DeFi is an attempt in the alternative direction of DeFi. The starting point of the project and the solution to some of the problems in the industry do not exist, which is what makes them different from DeFi. DeFi mirrors the real financial system into the blockchain. NFT+DeFi adds some new twists but nothing to be solved. It can be used as a fresh copy. "

At this stage, NFT+DeFi does bring NFT to the forefront again, but whether the combination is an experiment in innovation or a game of reaping remains to be seen.

What is the "gold content" of inflation? The NFT is still a little hot

With the strong momentum of DeFi, NFT has injected fresh vitality into games, art and other fields, and many investors have made a good return. William also pointed out that NFT has the potential in the field of digital art, which solves the difficult problem of anti-counterfeiting tracing in the field of traditional art, and lowers the threshold of digital art participation. The cost design of projects such as SuperRare protects the rights and interests of art creators.

However, the "fragrance" only stays on the surface. In fact, the number of users and the amount of money is still far behind DeFi's growth rate, not to mention the entertainment value of most NFT projects at this stage is still far greater than the real value. Over the past seven days, NFT has sold 17,930 units for a total of $2,107,000, according to Nonfungible.com.

Still, the fledgling NFT recently faced soaring Gas prices and network congestion. Sean Papanikolas, founder of NFT Cargo, has pointed out that the NFT industry is at an inflection point. But as Gas prices have soared, scalability has put pressure on new players in the industry. High Gas prices have led some platforms to work on tier 2 solutions, while others are looking at other blockchains and moving away from Ethereum altogether.

In addition to the above problems, Lu Yuanyuan pointed out that the development of NFT is also restricted by many aspects. First, the ethereum Gas problem. Most NFT values are lower than the cost of transferring NFT, which leads to the sleeping of NFT assets and the rise of the use threshold. Second, the NFT valuation in standardized format is not standardized. Different from the standardized Token price, the same NFT market price will be different. Third, the infrastructure is not perfect, the existing NFT standard still has defects, and the underlying tools and analysis tools are not enough; Fourth, the industry competition is not hot enough, fewer users, high production costs, leading to the lack of innovative applications.

In addition, for ordinary investors, the learning and participation threshold of NFT is generally high. More importantly, although NFT applications include games, artworks, domain names, collectibles, virtual assets, real assets, identities and other aspects, at present, the number of its art collection projects occupies the majority of the market, but the scale is still small, and NFT is in urgent need of new products or new fields to make a big cake.

Although THE NFT has a good vision of bringing encrypted assets to the traditional world, it has yet to make its debut. Mr Williams argues that although the NFT market is red-hot, it has been amplified by market speculation. Back to the NFT itself, the non-standardized nature of the NFT makes it difficult for it to become a mass market, just as we cannot expect an art auction market to reach the scale of a traditional financial market. In order to help traditional assets, the primary problem that NFT needs to solve at present is the physical asset chain. At present, there are still some problems in the physical asset chain, which cannot guarantee the integrity, authenticity and effectiveness of the information when the chain is connected.

Perhaps only if NFT builds up a sound infrastructure and goes into the real world on a large scale can it spell out possibilities like Lego and become the next breakout point of the market.