The market for non-fungible tokens (NFTs) is experiencing uninterrupted growth as consumer interest in blockchain climbs. According to Forbes, the demand for mainstream NFT initiatives has risen nearly 1,7855% year-to-date within a single quarter.
Everyday consumers aren’t the only people with a growing interest in blockchain or NFT crypto. Several high-profile individuals have demonstrated multiple proofs of concepts for NFTs. For example, actress Lindsay Lohan has promoted it as a tool to empower industry artists, who face greater challenges in the age of digital streaming — namely, retaining the rights and revenue to their content.
Editor’s Note: The first Canadian public company to bring defi to investors is DeFi Technologies Inc (NEO:DEFI). DeFi Technologies is a company focused on investing, incubating and managing trading technologies associated with the fast-growing decentralised finance market. Decentralized finance could be considered the next wave of financial innovation on the blockchain.
Other names include digital artist Beeple, whose NFT art project sold for well over USD 3.5 million at a philanthropic auction event, and the NBA, which successfully launched an NFT marketplace for investors and sports fans.
But what are NFTs? And how can the average consumer take advantage of the emerging market?
Non-fungible tokens, or NFTs, are data or items stored and exchanged digitally on a blockchain. An NFT can be a work of art, a video, a song, or even a social media post. In many cases, proof of ownership can be verified with a certificate of authenticity.
The demand for NFTs has soared exponentially — the first tweet ever posted by Twitter CEO Jack Dorsey sold for $2.5 million, while a Nyan Cat GIF was auctioned for $600,000, according to The Motley Fool. The market surpassed $1 billion in the last year alone, and experts predict continued sustainable market cap growth.
An increasing number of NFT art, collectibles, and limited-edition items are available for purchase. But there are several important factors to consider before making a buying decision, such as where and how to purchase these assets.
The NBA’s Top Shot marketplace is an easily accessible market for investors. It has significantly contributed to the popularity of NFT among everyday consumers. Here, consumers can purchase game highlights and video segments from NBA games. These clips, which are stored digitally on a blockchain, can be bought and sold in the Top Shot marketplace using Bitcoin, Ethereum, or decentralized finance (DeFi).
Experts believe NFTs will boost the popularity of cryptocurrencies and DeFi among consumers. While many consumers may not fully understand some aspects of DeFi, such as yield farming, digitized assets and tokens like NFTs are much easier to comprehend.
This poses new opportunities for DeFi Technologies and other companies to give consumers more investment options in ecosystems across North America, Asia, and Europe.
In Canada, DeFi Technologies has operated with the goal of driving shareholder value by developing and supporting digital asset management in DeFi ecosystems. In March 2021, DeFi Technologies announced the acquisition of two key companies in the blockchain industry: Valour Structured Products and HIVE. The partnerships are important not only for investors, but blockchain as a whole.
Valour’s business model centers on the development of exchange-traded products in the DeFi sector. It created Bitcoin Zero, a fully hedged, passive investment product with Bitcoin as its underlying asset that eliminates management fees.
In a press statement, Wouter Witvoet, DeFi Technologies CEO, expressed a positive outlook for the new partnership. “Johan [the co-founder of Valour] and the team pioneered exchange-traded notes based on cryptocurrency assets when cryptocurrency and blockchain was in its infancy,” he said. “This showed the level of forward-thinking that is required to deliver long-lasting shareholder value and incredible investor returns.”
That same month, DeFi Technologies announced plans to acquire HIVE Blockchain Technologies Ltd. The move will give HIVE a 6.5% stake in DeFi Technologies in exchange for a 1.1% stake in HIVE. The move will provide DeFi Technologies and HIVE an opportunity to promote the digital finance sector, specifically, Ethereum and Miner Extractable Value (MEV).
The news is significant for investors as MEV (the percentage of profit cryptocurrency minors can receive from reordering and censoring blockchain trades) has become a key issue in the last year, which saw the DeFi market cap skyrocket from $3 billion to $71 billion.
According to Witvoet, it will incentivize transparency among miners by giving them a larger MEV, leading to friendlier market conditions for investors. In a separate press statement, he explained, “When HIVE was founded there was no way for public market investors to gain access to the growing cryptocurrency markets. HIVE was the first public mining company offering investors exposure to this nascent industry by offering the possibility to simply buy a stock in a brokerage account.”
“Like HIVE, DeFi Technologies aims to accomplish the same by offering investors an easy way to gain exposure to the rapidly expanding decentralized finance sector,” Witvoet continued. “In 2020, HIVE was the most liquid stock on the Toronto Venture Exchange trading over 2 billion shares and the top preforming cryptocurrency stock globally by performance, increasing its share price by over 1500% percent.”
Witvoet noted that the acquisition of HIVE would give DeFi Technologies access to HIVE’s extensive Ethereum mining resources, which are among one of the sector’s most important assets. “Approximately 96 percent of DeFi transactions occur on the Ethereum network, with HIVE being the only public company mining Ether at an industrial scale and the partnership gives DeFi Technologies the ability to leverage this infrastructure for future developments to scale in an unprecedented manner.”
Between DeFi Technologies’ latest acquisitions and the rising popularity of NFTs, experts have high hopes for the digital finance sector’s popularity. As DeFi Technologies moves forward with its latest acquisitions, it will be in investors’ best interest to keep an eye on new developments.
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.
