DEFI and NFTs are Catching on with Mainstream Media With Recent Sales of NFT Art
An art collector walks into a gallery and purchases a one-of-a-kind piece to enjoy in their home. Except now they don’t; they go online, bid on an NFT, and ownership is recorded on a digital ledger. Welcome to the world of non-fungible tokens – purely digital assets that are absolutely exploding in popularity right now.
Once a little-known niche within the crypto community, NFTs have jumped into the mainstream media spotlight. With continuous coverage from major news outlets worldwide, thanks to several record-breaking sales, an asset class few people even knew existed before last week is now the talk of the town.
The idea behind NFTs as assets all comes back to the larger landscape of decentralized finance, better known as DeFi – a digital financial ecosystem that exits without the middleman. One year ago, the total value locked in Defi assets was less than $1 billion. Today, assets tied up in various DeFi services has grown to surpass $43 billion.
One thing is clear, the growing popularity and mainstream coverage of DeFi and NFTs is providing valuable insight into this rapidly expanding financial system. And companies like DeFi Technologies (NEO:DEFI) are helping bridge the gap between would-be investors and the DeFi market, providing the opportunity to reap potentially massive gains.
DeFi And NFTs Are Becoming Mainstream
NFTs have actually been around for years, but their growth has skyrocketed in the last couple of months. Even traditional mainstream media outlets like the WSJ and CBC are jumping on board. You may have read about one artist, known as Beeple, selling a piece entitled “Everyday: The First 5000 Days” for a whopping $69 million at auction last week, making him one of the most valuable artists alive today.
And it’s not just digital art, NFTs can be in the form of music, collectables, or sports memorabilia. In another example, a video clip of Lebron James dunking a basketball sold for $200,000, and a tweet from Twitter and Square CEO Jack Dorsey is being auctioned off with the current bid sitting at $2.5 million.
Where NFTs are losing a lot of people is when it comes to understanding their value. Beeple’s art can be viewed and copied anywhere online, and Lebron’s dunk can be watched on YouTube, so why are people going crazy outbidding each other to own them?
The answer lies in the ledger, anyone can view these NFTs, but only one person can own them. Thanks to blockchain technology, NFTs come with the same provenance as a physical work of art, but can’t be forged, damaged, or stolen and can easily be sold online.
DeFi is gearing up to become of the most underrated trends in finance. Younger generations make little secret of their utter disdain for large corporations and regulators. So, while many people may not fully understand the concept of a decentralized financial market – one where you can borrow, lend, deposit funds, and trade complex financial products without opening an account or asking permission – it is not a temporary fad, but rather a signal of a larger market shift.
In 90 days, the total value locked in various DeFi products has grown from $14 billion to $43 billion.
Source: DeFi Pulse
Google Trends Shows an Explosive Growth In NFTs
Google Trends is used to measure the search volume for a given keyword or phrase. While this data would appear more helpful to marketers than analysts, Google Trends has been shown to hold some weight as a predictor of future stock prices by allowing investors to quantify consumer sentiment.
Think of Google as the world’s largest free data source; if you know what to look for, it can be used to track investment opportunities. Looking at the graphs, we can clearly see an increase in the interest for DeFi and NFTs over the past 12 months. The spike in NFT related searches started just before NFTs burst into the mainstream spotlight. The growth in DeFi has been slightly less pronounced, but a closer look shows similar spikes, corresponding with the increases in searches for NFTs.
In 2020 searches for DeFi closely matched market events and prevailing investor sentiment, tracking breakthroughs in total locked-in value. Last week the DeFi market once again reached new highs, surpassing $43 billion.
DeFi and NFTs Explained
What is DeFi?
Decentralized finance, better known as DeFi, is an organized market without the middle man. Where the traditional financial system relies on banks and brokerages, DeFi operates on smart contracts, cutting out all the unnecessary human involvement and paperwork. Smart contracts are self-executing computer programs where terms of the contract are written in the code lines and exist permanently on a distributed, decentralized blockchain network.
What are NFTs?
NFTs are digital assets verified using blockchain technology. Once an NFT is created, it exists forever. Ownership and authenticity are written into the blockchain and cannot be destroyed, removed, or duplicated. To date, the top-selling NFTs have been digital art; however, nearly anything can be tokenized, from virtual items in a video game to sneakers. What makes NFTs such a hot commodity is that they are unique, verifiable, and sellable.
But the beauty of NFTs isn’t just that they are making a select few very rich. NFTs are allowing artists, musicians, and pretty much anyone else to monetize digital goods that would have otherwise been available for free or nearly free. In a world that is becoming increasingly reliant on digital technology, NFTs provide digital asset creators with a way to get paid and permanently linked to their work.
The Relationship Between DeFi and NFTs
NFTs have the potential to increase the mainstream adoption of cryptocurrencies and DeFi. While many people can’t seem to wrap their heads around yield farming, most people can grasp the idea of a tokenized digital asset, and that’s making the whole DeFi ecosystem a lot more interesting. Right now, there several areas NFTs are booming in DeFi markets.
Offering a fresh take on collectables, NFTs allow people to hoard items like baseball cards, characters, and coins, in an entirely new way. CryptoPunks and CryptoKitties are just two examples of the many, many, emerging digital collectables.
NFTs are just another way people are monetizing gaming. Incorporating NFTs and DeFi users can tokenize rare in-game items to sell them to other players or collectors. Other platforms like Decentraland allow users to build, explore, and play online games, and earn cash while doing it.
It’s not just assets that are being digitalized. Our appearance, unique traits, academic qualification, or medical history can also be digitalized in the form of NFTs.
While this asset class is still emerging, in the future, people may use NFTs to serve as the authenticity of ownership for real-world tangible assets like property or cars.
NFTs are helping protect copyrights and enabling artists to get paid for their work. Not only do NFTs ensure digital art creators get a bigger payday, they also allocate a portion of the proceeds from any future sales back to the artist.
DeFi Technologies is working to give everyone, from large institutional players to small retail investors, equal access to the rapidly emerging decentralized financial market. They are driving investment into DeFi and supporting many ground-breaking new projects that will continue to change the face of the global financial system as we know it.
Just a few of their most recent investment highlights include:
- 6 percent increase in Treasury Balance through active investment into leading DeFi protocols
- Providing investors with broad-based exposure to the DeFi ecosystem through a combination of investments in DeFi protocols across a global network
- As the first pure-play DeFi company on the public markets, DeFi Technologies in providing shareholders access to substantial returns in the decentralized ecosystem
- All-star management team with vast experience in the cryptocurrency and finance industry. The founders previously achieved massive success with HIVE Blockchain and Scifi.
Disclaimer: The company described in this article is a customer of NAI Interactive Ltd. This material is for informational purposes only and is not intended as a recommendation or offer or solicitation for the purchase or sale of any securities or financial instruments, or for transactions involving any financial instrument or trading strategy.