New-Gen NFT-Fi | AMM, Liquidity Pools and Loans!
De-Fi concept was introduced with a basic idea that can be seen as the modern form of bartering thousands of years ago. The ideology of this modern swapping format was to provide 2 assets in a pool and exchange them as the investors/pool users wish. The collected fees and rewards were the incentives in the simplest form.
When we come to today's crypto ecosystem, not only cryptocurrencies or tokens are used in liquidity pools but also Non-Fungible tokens! Until now, we followed the traditional NFT market ways to buy or sell NFTs.
The Old-School Way:
- Go to OpenSea
- Make an Offer
- Wait for seller to accept
- Wait for transactions to happen
Similar to the open bazaars in ancient times.
However, new-era is NFT markets are totally different!
New-Gen: SudoSwap, BendDAO and More!
Now that coins can be added to Liquidity pools, so do NFTs! Sudoswap and BendDAO are two NFT markets where you can apply De-Fi rules to these digital assets.
On one side, somebody provides his/her NFT and on the other side, the pair of the LP is provided to create a pool for the collection.
Popular collections can be traded on the liquidity pools created by the communities. Thanks to these pools, you can buy and sell multiple tokens thanks to Automated Market Maker that provides the best offer for buy and sell actions.
Via Liquidity Pools, you get the coins you want and sell your digital assets to a ready buyer! Crazy stuff!
Even OTC is available!
In OTC option, you can barter the assets you wish.
Considering the facilities of OpenSea, LooksRare and other NFT markets, these guys are doing an amazing job to facilitate the trading actions of NFTs.
U-S-E-C-A-S-E 2.0
Can we say that there is a new way to make gains from NFTs via pool gains etc?
I think so. You can even get loans for your NFTs on BendDAO!
As I mentioned in BendDAO post, you can collateralize your NFTs (e.g. BAYC) and get ETH loans up to 40% of the floor value of the collection. Of course you pay with interest and your health score is assessed to liquidate your NFT incase of necessity.
So, the earlier form of NFT ownership was based on 4 dominant features.
- Buy Low Sell High - Make Gains
- Sense of Community
- Piece of Art
- Gaming!
Now we can enlarge the part of earning opportunities and add NFT-Fi as the new section IMHO. Pool Fees, Rewards and easier trading options! Sweet 😎
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Is this exactly what is needed to have another major liquidation event hehe? As the market is so small, if NFT holders panic and start selling at -30/40% in ETH terms, we might have an issue :D.
Time will tell, interesting though!
If I had a BAYC, I would definitely colletarize it to get some coins and farm with them.
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I think this system is a bit risky in bear market with low liquidity. However, getting loans for your NTFs can be a perfect way to get some funds to pile up cheap crypto ✌🏼
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Very interesting what you mention regarding NFTs. As for what you said, I think when it comes to NFTs I belong to the old school; since I still create them through OpenSea and try to market them there (without much success, I must say); but I must catch up with all these things that you mentioned about it, because in my opinion, NFTs will be more and more present in our lives in the future in all areas of human beings in society; that, in addition to the fact that they are an excellent means of obtaining economic gains if they are well understood and used. Excellent post. Thanks for sharing. Greetings.
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Thanks for standing by mate ^^
I believe NFTs also need a better way of transactions if we talk about the revolutionary technology "blockchain". New rules, functional methods and satisfactory products are needed :)
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This is really cool. I have a feeling that the next 5-10 years are going to be dizzying in the pace of developments that are beyond my previous imagination. Gonna be a fun and volatile ride!
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I appreciated the action of BendDAO and Sudoswap. Brilliant ideas with futuristic perspective. Let's see what will be the next big thing :)
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How does that even make sense the entire point of something that is not fungible is that it's illiquid and isn't easily converted, wow, the bastardisation of first principles in soycoins is next level stupid
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Interesting times indeed. Though I find many products too risky to be in, I enjoy watching the history happening!
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