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Analysis of NFTFi's core mechanism and seven sub-circuits

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Why is NFTFI needed and what needs does it address? What is the current development of NFTFI sub-tracks?

Analysis of NFTFi's Core Mechanics and Seven Sub-Tracks

Article source: DAOrayaki DAO

Abstract

With the 2020 Defi Summer and 2021 NFT Summer behind us, more and more people are looking to NFTFi to bring a new summer to the web3 world by combining NFT and Defi.

Centering on NFTFi, the following two issues are discussed in this paper:

Why is NFTFI needed and what needs does it address?

What is the current development of NFTFI sub-tracks?

This paper will first analyze the birth background and current situation of NFTFi, and then conduct scene sorting from the whole process of user purchase to holding NFT, and analyze the core mechanism of seven sub-tracks: pricing evaluation, trading, BNPL, lending, derivatives, fragmentation and leasing. Then, the point is selected to analyze the pool CDP model loan project JPEG'd.

The background against which NFTFi was born

The birth of NFTFI is closely related to NFT. The NFT market began to gain traction in February 2021, reached its peak in August, and reached its peak in January 2009, when Opensea reached $4.8 billion in transactions that month. However, as the crypto market began to turn downward, the NFT market was inevitably affected, and the volume and value of transactions began to decline rapidly, experiencing a process from boom to bust.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

After the bear market, the liquidity problem of NFT became more apparent, leaving previous players in the NFT market in trouble, and NFT holders were often forced to hodl. However, NFT without wealth growth effect will lead to a signal to the community of the collapse of consensus, thus exacerbating the lack of liquidity, forming a vicious circle.

At present, the core problem of NFT is lack of liquidity, which is caused by the following three reasons:

The environment of web3 has become a bear: the Federal Reserve has raised interest rates before, and then the crypto world frequently explodes. The degree of trust in the crypto world and NFT has declined significantly.

High barriers to entry: Blue chip projects are expensive (like Boring Ape and cryptopunks are too expensive for most users), and common projects require a lot of time to research and worry about running away.

Lack of application scenarios: the utilization rate of NFT assets by holders is very low. Most holders still buy at a low price and sell at a high price. Other enabling scenarios have not been widely penetrated.

In order to improve the liquidity of NFT, broaden the application scenarios and cope with the current situation of high threshold, NFTFI was born. There are many definitions of NFTFi. This paper believes that NFTFi is essentially a combination of NFT and financial attributes, making the flow form of NFT more diversified and efficient, and providing more possibilities for NFT holders to play. Under the ecology of NFTFi, a variety of products have also been derived, including layer1 and layer2 and the NFT Vertical project.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

Current status of the NFTFi track

At present, NFTFi is still in the early stage of development. The market size can be estimated from two aspects, one is the trading volume of NFT market, and the other is the blue-chip valuation of NFT.

a. According to the NFT Market 2021 report published by Nonfungible.com, the NFT market is worth $17.6 billion in 2021, a 210-fold increase from $82 million in 2020. It was 27 percent of the global traditional art market that year ($65 billion). Track size =176*50% (penetration) $8.8 billion

b. Based on the valuation of blue chip NFT, estimate the current track size of NFTFi. In May 2022, the main blue chip NFT value (with reference to floor price and ETH price at 2000 USD) :

BAYC is about $1.72 billion, CryptoPunks is $953 million, Moonbirds is $440 million, Azuki is $273 million, Doddles is $237 million, the total valuation is about $3.587 billion. The Sandbox, Arcade and Decentraland land types were not included as they were not suitable for floor price calculations due to their apparent rarity ranking. Considering the future upside space, the overall market value of blue chip NFT is about 5 billion dollars. Track size =50*80% (penetration) $4 billion

As the current valuation and pricing of NFT is not mature, the market is basically focused on blue chip projects. Floor price NFT, in the current track view using the second way is more reasonable; In the long run, the first approach can be adopted as NFTFI projects broaden from blue chip to include more NFT projects. But generally speaking, the development of NFTFI industry is still in the early stage, and the market size is expected to reach billion dollars. The above calculation can only provide a reference on the order of magnitude. The current market size accounts for about 0.5% of the total market value of cryptocurrency, with low penetration rate and large room for improvement.

NFTFi track events

In order to facilitate readers' understanding, this paper will break down the whole process from buying to holding NFT and divide it into four stages: project evaluation, selection of trading venue, purchase payment, holding four stages, involving pricing evaluation, trading, installment, lending, derivatives, fragmentation and leasing.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

1.NFT pricing & valuation

Pricing and valuation of NFT can be said to be the cornerstone of the whole NFTFi. Pricing is involved in both lending and leasing. A good pricing system is very important for the flow of NFT and can promote the development of the whole NFTFi. The current circuit includes Abacus, NFTBank, Upshot, Banksea and others.

At present, there are mainly two kinds of pricing methods: human pricing (game pricing) and algorithm pricing (prediction machine).

a. In terms of human pricing, the most prominent product is Abacus, which makes good use of game theory. Abacus adopts two pricing models:

Peer incentive pricing: The essence of price is equal to the group's recognition of price

1. Multiple appraisers pledge a certain amount of security and evaluate the price of the NFT. Then the appraiser's price is weighted to arrive at the final price.

2. The appraisal calculates the profit of the appraiser. The closer the bidder is to the appraiser, the higher the profit will be. (The general cut-off line is the difference above 5%)

Abacus spot pricing: Abacus acts as an intermediary in the price game between appraisers and owners

Appraisers act as validators, guessing the value of NFT and putting their money into different valuation levels. In turn, NFT owners are backed by liquidity to use their NFT as collateral.

1. Example: Xiao Hong put his BAYC with market price of 60ETH into the pool in order to get a loan; Next, Xiaogang and Xiaoming each put 20ETH into the pool. At this time, if Xiao Hong decides to close the pool (which can be understood as selling BAYC), the BAYC at this time is 55ETH, then there is a price difference of 15ETH in the pool, and Xiao Gang and Xiao Ming will share 15ETH equally. If the price of BAYC is 30ETH when Xiaohong closes, Xiaogang and Xiaoming will bear the difference loss of 10ETH together. (Allocation according to the proportion of input)

2. Due to the timeliness of the appraiser's and the verifier's operations (and the corresponding restrictions in order to prevent evil), a balanced price, the auction price, will eventually be reached in this game.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

b. Algorithms are essentially prognosticators in terms of pricing. At present, Banksea and upshot are relatively mature schemes for this track, both of which estimate nft price by combining multidimensional data with algorithms, such as opensea market price, etc. In addition to nft historical data, Banksea also cited community, social media data and other data not directly related to enrich the data dimension.

Comparison between game pricing and prediction machine

Game pricing:

a. Advantages: Accurate pricing can release higher liquidity, such as the pledge rate increased from 30% to 70%;

b. Disadvantages: the pricing process is complicated and the game mechanism is not perfect. Inability to value multiple projects in large quantities; Need to prevent bidding price.

Prognosticator:

a. Advantages: real-time quotation, and keep up with the market.

b. Disadvantages: slightly weak accuracy

At present, the predictive machine algorithm pricing has a certain effect. From the perspective of market demand, the algorithm pricing has a broader prospect after the continuous accumulation of nft historical data and further iteration and optimization of the model.

2. NFT Exchange & polymerizer

Exchanges and aggregators are the places where users purchase NFT and are currently the segments with the largest market share, including centralized trading platforms such as opensea and looksRare, aggregators Gem and Genie, and decentralized trading platforms such as sudoswap. As can be seen from the chart below, the main activity of NFTFi's project is still focused on the centralized trading platforms such as opensea and looksRare

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

a. Centralized NFT Exchange: NFT trading is conducted on a third-party platform, which is the most mainstream trading method at present.

b. Aggregator: Through multi-platform price aggregation, on the one hand, better quotation can be provided; on the other hand, one-click scanning can efficiently save gas fee.

c. Decentralized NFT exchange: The representative project is Sudoswap, with logic similar to dex logic.

Sudoswap's AMM mode and liquidity provision are also similar to Uniswap's. In terms of liquidity provision, unilateral NFTorETH can be provided or transaction pairs can be provided to obtain transaction fee income. But since NFT is indivisible, it is different from x*y=k curve. Sudoswap takes three other curves: linear, exponential, and XYK (new). Users can choose for themselves

1. Linear curve: newprice=olderprice+delta*buy_number-delta*sell_number

2. Exponential curve: Logically, multiply by delta when buying and divide by delta when selling.

3.XYK curve was added in September, but it was vaguely written on the official Twitter and white paper, with no clear explanation or discussion.

The advantages and disadvantages of centralized NFT exchange and decentralized NFT exchange are compared. Decentralized NFT exchange (take Sudoswap as an example) :

a. Advantages: market matching and timely pricing, which can help long-tail projects; No royalty, favorable buyers; Low handling fee;

b. Disadvantages: the difference of rarity is lost, and the value of the same series of NFT is similar, which is only suitable for long tail or high homogeneity of NFT; The lack of royalties caused dissatisfaction among creators.

Centralized exchange:

a. Advantages: provide a large number of NFT, users can select a large pool; One NFT, one price

b. Disadvantages: high royalty and handling fee

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

From the current comparison of Sudosap and Opensea daily turnover, basically maintain a status quo of 3% VS 97%, accounting for relatively low. Due to the uniqueness of each token, PFP naturally has the characteristics of low liquidity and subjective pricing, so that the turnover frequency is unlikely to be as high as that of token. The advantage of Sudoswap in enhancing liquidity has not been fully played, which is the gap between Sudoswap and uniswap.

In the long run, Sudoswap matches perfectly with Gamefi's item NFT (single homogeneous, high-frequency trading). In the future, starting from gamefi's ecological cooperation, there may be a new breakthrough. On the other hand, uniswap NFT product leader said in July that uniswap would integrate sudoswap for NFT transactions, which is a good thing for the future of sudoswap.

3. NFT Installment (BNPL)

The core appeal of buy now pay later lies in overdrawing the future consumption power to solve the current fund shortage. This payment scenario extends from web2 to web3 world. In order to meet the consumption habits of Generation Z, web3 builders also begin to apply this payment method to the field of NFT. Including Cyan, Cedar, Teller and other products.

The model of BNPL products is basically similar. Take Cyan, the representative product in BNPL agreement, for example:

A.yan will display their approved blue chip projects as white list projects.

b. The player then initiates a BNPL program on Cyan to purchase the NFT currently on Cyan's whitelist.

c. Next, Cyan provides users with an installment payment plan, including the installment repayment period and interest rate. Under the BNPL model, buyers only need to make a down payment to lock in the price of the NFT for three months. If the price of NFT rises during the process, you can pay it back in advance to earn the difference. However, the interest will not be reduced, and users will still have to pay according to the agreed plan.

d. After the player accepts the proposal, he receives ETH from the Cyan fund pool. When all installment payments have been made, the NFT goes to this address. If late payments are deemed to be in default, NFT will remain in the Cyan pool for liquidation.

e. The profit model of Cyan is mainly through lending service, where users mortgage NFT to obtain loans.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

BNPL is a very attractive scheme for the Z era when consumption power is weak but consumption willingness is strong. The overall game play is relatively monotonous at present, which is basically BNPL+ loan mode. And its lending has a strong demand for pricing valuations, such as Cedar's partnership with SPICYEST, to complement NFT in providing accurate prices. Cyan currently leads the NFT BNPL sub-market, with a variety of competitors playing a similar game, such as Teller's ANPL, Ceda, Pine Loans and Halliday.

4. NFT lending

As a financial infrastructure, lending has a broad development space. The core mechanism of NFT lending is to take NFT as collateral to obtain loans. The core element is risk control, which requires market consensus on the price of NFT. As the current pricing and valuation projects are relatively early, risk control is mainly carried out from two aspects: project type (blue chip) and Loan to Value. Like defi, loan is also an early type of project in NFTFI. Currently, NFT loan projects include: BendDAO, NFTfi, JPEGd, Pine Protocol, Arcade xyz, etc. Current NFT lending can be divided into two main types: point-to-point and point-to-pool.

peer to peer

a. The borrower submits the order to show his or her needs, and then the lender browses all the loan needs on the platform, selects the intended order and discusses the interest rate and term with the borrower before completing the loan.

b. When the loan is paid off as scheduled, the NFT is returned to its original owner; If it cannot be paid off, the NFT belongs to the other party.

Currently NFTfi and Arcade xyz use a peer-to-peer mechanism.

peer to pool

A. The NFT holder can obtain the loan after mortgaging the NFT, which is similar to the Aave and Compound logic in defi. You lend money through excess collateral and you pay interest.

b. Borrowers inject money to earn interest.

Currently BendDAO, JPEGd, and Pine Protocol use a point-to-pool mechanism.

Among them, the design of JPEGd is similar to that of MakerDAO. By pledging NFT, PUSD(over-pledged stablecoins) is cast for circulation and use.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

Point-to-point and point-to-pool comparisons

Peer-to-peer lending:

A. Advantages: a wider range of loans, no need to rely on the prognosticator.

b. Disadvantages: Long trading cycle and low efficiency.

Peer-to-pool lending:

a. Advantages: High efficiency

b. Disadvantages: the rarity of NFT is underestimated; When the market is bad and lenders panic, liquidity dries up, it is easy to create a death cycle.

For example, the bank run phenomenon of BendDAO occurred in August. A large number of nft were facing liquidation, and since the threshold of liquidation was very close to the low price, no one was willing to buy. Users frantically withdrew circulating funds, and ETH deposits plunged from 15,000 ETH to 12.5 ETH. Later, BendDAO initiated an emergency self-rescue vote, shortened the auction time from 48 hours to 4 hours, and lifted the first bid limit of 95% of the reserve price, and gradually began to recover.

According to the data on Dune, 58% of the current NFT lending market is NFTFIs, 32% is Benddaos, and about 10% is other categories. Overall, NFTFi and BendDAO dominate as the leading point-to-point and point-to-pool players.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

Generally speaking, the development of NFT lending is closely related to the overall market of NFT on the one hand, and the development of pricing and valuation projects on the other hand. As the development of pricing and valuation is still in the early stage, the current point-to-point project NFTfi is in a more advanced position. However, with the development of various kinds of prediction machines, point - to - pool also has a lot of imaginative growth room. However, on the whole, due to large price fluctuations and difficult pricing, the market still accounts for a small proportion of NFT loans, and NFT loans want to develop rapidly, which is basically strongly bound to NFT pricing and valuation.

5. NFT derivatives

There are two main types of NFT derivatives: options contracts and prediction markets.

a. Option contracts: Similar to traditional options, an option issuer creates the right to buy or sell an NFT at a certain strike price at a certain time and receives an option fee. The buyer of the option pays a premium to buy or sell the NFT at the strike price before the agreed date. The items include the Nifty Option, Putty, Hook, and OpenLand.

At the same time, perpetual contract project is derived, which is similar to the perpetual contract of FT. There is no fixed delivery date, and the contract price and spot price are anchored by capital fee. When the futures price is higher than a certain value of spot price, the multi-party pays to the short party (or the multi-party commission increases and the short commission decreases). Instead, the short side pays the other side. Projects include: NFTperp, injective.

b. Prediction market: A new way to predict and bet through mint, secondary and renting NFT. For example, in this Qatar World Cup, if you think Germany will win, mint/ secondary purchase/renting German NFT can be used, and the bonus will be distributed according to the winning situation or holding time of NFT. For example, Reality Cards get the distribution bonus by holding the corresponding NFT holding time; OKX, for example, distributes the money based on the number of matches won in the World Cup and the percentage of the prize pool that NFT makes up.

Derivatives belong to a relatively mature type in the traditional financial market. At present, the play of NFT is basically just changing the underlying assets, without any new breakthrough. With NFT derivatives still in the very early stages, NFTperp still in the test net stage, putty trading in double digits, and all types of projects in the early stages, it is difficult to see explosive growth until NFT liquidity and deposit valuation systems are in place. On the contrary, projects like prediction market are a fresh play, a new model brought by NFT. If we make good use of the World Cup, Olympics and other big events, there will be some imagination space for innovation in the future.

6. Fragmentation

Due to the non-homogeneous nature of the NFT, it cannot be segmented like the FT, thus limiting the natural mobility. Fragmentation converts NFT into multiple FT by splitting ownership. Thus improving liquidity. It's kind of like splitting a high denomination stock into multiple shares so that the buyer can buy a portion of the stock. Fractional.art and Unic.ly are represented under the NFT fragmented circuit

After NFT fragmentation, FT can be used to activate more gameplay in Defi, such as trading in uniswap, borrowing in aave, etc. Similarly, users can buy out NFT.

Fractional head project Fractional.art for example, once more than 50% of the token holdings began to set the auction floor price, the NFT into the auction stage, the high price; When the auction stage is not opened, users can buy out the NFT for no less than the reserve price.

Fragmentation highlights and dilemmas

Highlights:

1. As a way to improve liquidity, it can bring about higher capital efficiency (lending, liquidity mining, etc.).

2. Lower barriers to participation

3. Get more exposure

The dilemma:

1. Only apply to high value NFT

2. There is still the age-old problem of pricing

3. Fragmented FT will also face liquidity problems

4. How to distribute all kinds of rights and interests such as air delivery after fragmentation

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

As a fragmented head player, Fractional.art has a great impact on the future development of this subdivision track. The chart above shows fractional's daily transaction volume and new additions to its daily Treasury. In terms of transaction volume, the project was very hot early on, but after 22 years it has continued to cool down. The new increment of daily fund pool began to have new ups and downs in 22, which shows that the appeal of NFT fund creators is still there, but with the cooling of web3 environment and NFT, as well as pricing, equity, FT liquidity and other issues, trading volume did not produce new fluctuations. In general, since fragment projects are only applicable to high value NFT, they will be closely related to the popularity of blue chip NFT projects. As a prominent liquidity provider. Fractional.art could flourish again when the next NFT blue chip boom begins.

Step 7 Rent

Through the leasing of NFT, on the one hand, the owner's idle NFT can generate greater profits; on the other hand, the lessee can acquire the right to use NFT for a period of time without paying a high price. Among them, the development of Gamefi, meta-universe land and equity NFT also boosts the development of NFT leasing

1.gamefi: Since many Gamefis have high barriers to entry, borrowers can rent NFT to get into the game quickly, or get in-game rewards. For example, in the hot days of Axie, the price of entrance ticket for three elves is very expensive, and if you use rental, you can quickly enter the game.

2. Metacome Land: As an increasing number of offline brands have moved to Metacome, there are requests to rent space on Decentraland for layout/art exhibitions. (Similar to real world rental space)

3. Equity NFT: Rental NFT enables tenants to obtain corresponding benefits of each project community at a low cost.

From the tenant's point of view, there are two types of NFT leases: mortgage leases and unsecured leases.

Mortgage lease: NFT can be rented only after providing collateral (e.g. ETH, BTC). Representative project: reNFT, using peer-to-peer leasing.

Leasing without collateral: Double Protocol proposes ERC-4907, designs doNFT, represents NFT with effective duration, and ensures maturity time. For projects that cannot upgrade the contract (so that the NFT has two roles), a way to package the NFT (wNFT) is also provided, with a logic similar to wETH, where the user does not receive the actual NFT, but the packaged NFT. It has the same features as, and is supported by, the original NFT. When the rental time is up, the packaged NFT, such as IQ Protocol, is destroyed.

However, because of the high price of mortgage leases, on the other hand, there is a risk that the borrower will not repay the NFT. The financial risk of leasing without collateral is lower and safer. With the launch of the final version of ERC-4907 in June this year, leasing projects have basically shifted to the direction of unsecured lease, and currently reEFT is also unsecured lease.

Key project analysis: JPEG'd lending

Project introduction

JPEG'd is a novel decentralized lending protocol that launched on April 27, 2022. A point-to-pool loan agreement allows the holder of an NFT to use the NFT as collateral for a loan.

Compared with other peer-to-pool lending protocols such as BendDAO, JPEG'd adopts a similar approach to MakerDAO, by mortgaging the original stablecoin of the protocol for subsequent use. From the first online only support cryptopunks as mortgage, to now support including cryptopunks, BAYC, Azuki, Doodles and many other blue chip NFT.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

Core content and highlights of the project

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

In this paper, the whole process of NFT lending is sorted out step by step, as shown in the figure above. From the use process of NFT lending, JPEG'd has novel design and highlights in many aspects.

a. User mortgaged NFT to exchange PUSd (stablecoin with excess mortgage)

b. In terms of currency lending, the interest rate on JPEG'd PUSD is 2% a year, the lowest in the market, compared with around 14% for BendDAO. JPEG'd has a significant advantage in terms of interest rates, with up to 32% of the value of the collateral allowed to be withdrawn, and liquidation if above.

c. Prior to liquidation, JPEG'd offers a novel link -- insurance. Users can choose 1% of the amount of the mortgage to buy insurance, and if liquidated, they can recover the NFT by paying an additional 25% liquidation penalty after paying off the debt + interest. The term is 72 hours. If the payment is not made, the insurance lapses.

Project token economics

JPEG is a governance token that does not have much economic value, with a total supply of 69,420,000,000. According to data from Coinmarketcap, JPEG'd had a small surge when it went live and has remained stable since then, equating to about $0.0005.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

JPEG token allocation for protocol teams, their advisors, DAOs, and public donation campaigns, the total allocation will be:

Team: 20,826,000,000

Consultants: 3,471,000,000

DAO: 24,297,000,000

Donations: 20,826 million

Details of the proportion are shown in the figure below:

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

JPEG'd VS BendDAO In order to better understand JPEG'd, this paper makes a further comparative analysis with BendDAO, a representative project of P2P pool lending.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

JPEG'd sets a lower loan ratio than BendDAO's liquidation mechanism, resulting in the mortgagor lending less money in the future to guarantee that the order will not be cleared. From a mortgagor's point of view, there is less cushion and a higher risk of liquidation, thus shortening the mortgage lending cycle. On the one hand, this means that the collateral on JPEG'd flows faster, on the other hand, a slight drop in the floor price will force the mortgagor to redeem or liquidate, reducing the risk of bad debt.

Future development prospects:

1. Advantages:

a. Low interest rate + insurance

JPEG'd, as a novel NFT lending system, adopts MakerDAO's CDP model in its lending mechanism. On the one hand, it offers the lowest interest rate in the market to attract more NFT holders to participate in the lending, and on the other hand, the insurance clearing mechanism provides users with a new sense of security in case of large fluctuations in the value of NFT.

b. Watch the market and keep up with the facts

In response to the bank run at BendDAO in August, JPEG'd DAO passed a proposal to provide free insurance to eligible NFT who migrate from BendDAO to JPEG'd within two weeks.

2. Weak: PUSD VS ETH

On the other hand, compared with the direct loan ETH of bendDAO, the PUSD of JPEG'd loan also needs to go to Curve first to exchange for mainstream tokens. From this point of view, for users who want to pledge NFT to re-scan NFT, bendDAO (scan directly after obtaining ETH) is more suitable; For defi users who want to make a sound investment, they can consider converting to PUSDs with lower interest rates on JPEG'd and gain profits through operations such as stablecoin mining.

3. Recent trend: Cooperation with the leading project of the Prophecy Machine

The importance of valuation can't be overstated for NFT projects, and this month (November 2022), JPEG'd has partnered with Chainlink, a leading foreseeer project, to provide valuation services that will help JPEG'd grow.

4. Future Outlook: Analogy DEFI

Regarding the endgame of JPEG'd and BendDAO, it is somewhat analogous to MakerDAO and AAVE in defi, both of which are currently in the head position (and close to double the TVL of AAVE from MakerDAO). Going back to NFT lending, it is possible that JPEG'd and BendDAO could go hand in hand.

NFTFi 的核心机制和赛道分析：从流动性出发，通往广阔应用场景

Summarize the conclusion and thinking

1. NFTFi was born to solve NFT's illiquidity problem. Pricing valuation, trading, BNPL, lending, derivatives, fragmentation and leasing are explored. From the analysis of several sub-tracks of NFTFi, the development of various NFTFi projects is highly dependent on NFT pricing valuation, which can be called the cornerstone of NFTfi. However, NFT pricing valuation is still in a relatively early stage, which also affects the development of the whole industry.

2. From the perspective of the project characteristics of NFTfi, an important scenario in the future may lie in Gamefi. Game props NFT have certain characteristics of homogeneity and high-frequency trading. Can play to its high liquidity advantage.

3. From the perspective of user participation, the current user usage threshold of NFTFi circuit is relatively high. On the one hand, users need to hold blue chip NFT, on the other hand, users need to be familiar with DEFI's gameplay (because the current gameplay of NFTFi is basically borrowed from Defi). It is an area where you need to know both NFT and DEFI (the conversion rate is missed and one layer is removed from defi), and it is a relatively more professional track than NFT and gamefi, and it is difficult to see explosive growth in the short term.

thank

DAOrayaki, a decentralized media and research organization, has publicly funded THUBADAO to conduct independent research and share the results publicly. The research topics mainly focus on Web3, DAO and other related fields. This paper is the fourth installment of sharing the funding results.

DAOrayaki is a fully functional, decentralized media platform and research organization that represents the will of the community. It aims to link creators, funders and readers, provide Bounty, Grant, prediction market and other governance tools, and encourage the community to research, curate and report on a variety of topics freely.

THUBA DAO is a decentralized organization initiated by Tsinghua University Blockchain Association (THUBA) members. THUBA DAO is committed to bringing the world of Web3 to every student, becoming a bridge connecting the blockchain community at home and abroad, and cultivating the best next generation of Web youth and pioneers.