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There is no shortage of news in the currency circle in 2020. When the Bitcoin bull market and DeFi boom swept the headlines of major news media, a silent revolution is producing a chemical reaction in another corner of the cryptocurrency field: non-fungible tokens (NFTs). ).
NFT has been around for several years. It provides a basis for the operation of cryptocurrency collectibles such as cryptokitties, but this type of token is nothing more than a proof of concept for a unique, non-replicable cryptocurrency token. In this summer, with the advent of decentralized finance boom, NFT gradually matured and set off a storm in the fields of games, finance, and art.
NFT and DeFi
Decentralized finance (DeFi) may be the most important thing that happened in the non-functional financial product industry this year.
The premise of DeFi is very simple, that is, each DeFi project is an extremely complex puzzle box of its own: it runs on code, is theoretically free from human intervention (but not necessarily in practice), and is decentralized for all Internet use Financial products that are standardized, non-custodial and open source.
DeFi started as a very broad term: any new financial project supported by encryption technology can be called DeFi.
In June of this year, DeFi’s explosive point was Yield Farming. At the same time, DeFi’s lending agreement Compound began to issue $COMP tokens to users who used it. A few days later, $COMP became very valuable, and people began to obtain this token by making loans from Compound. Other agreements followed, and the “DeFi mining boom” started.
Of course, the NFT industry is not far behind, and its emergence has brought two major innovations to the DeFi field.
NFT Decentralized Exchange (DEX)
The most popular type of DeFi protocol is a decentralized exchange, which is a type of cryptocurrency exchange in which anything can be traded; because it is decentralized, regulators cannot close it.
In early 2020, Alexei Falin and Alex Salnikov created Rarible, a decentralized NFT trading platform. This “decentralized” element is very important; this is what distinguishes Rarible from regular non-functional exchanges such as OpenSea or SuperRare. The decentralized exchange transfers the governance (operation of the exchange) to anyone who holds the so-called governance token (such as Compound’s $COMP).
The only way to obtain these governance tokens is to trade on crypto exchanges or use the platform. Although most people think that the main function of this type of token is for governance, in fact many of its holders mainly make money through tokens.
During this process, two important events occurred: 1. The price of Rarible’s token rose from $0.63 at the end of July to $8.54 at the beginning of September. (As of December 2020, the price is approximately US$2). 2. Similar measures have promoted the development of the NFT industry, which is growing rapidly.
You can have partial ownership of NFT
NFT also solved a problem that previously prevented investors from snapping up purchases.
In the past, you could only buy one NFT. For example, they are just like real objects. You can’t auction off a small piece of Picasso’s canvas. What you want to buy must be an entire painting.
But some NFT developers believe that this should not apply to digital art, so they use DeFi to build tools to cut NFT into smaller units of tokens, and then trade on popular decentralized exchanges such as Uniswap.
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The whole point of this is that users can earn more money from NFTs, otherwise these NFTs will remain idle in collectors’ wallets until they are sold.
However, if you can convert one NFT into thousands of regular, replaceable ERC-20 tokens, then you can embed these tokens into DeFi smart contracts to obtain very attractive benefits. This year, Singapore’s NIFTEX and polyent Games are a good example.
NFT and games
Video game developers have used NFT on a large scale in 2020. For game developers, the attractiveness of NFT is obvious: because each token can represent a weapon, armor, football player, etc. used in video games.
Most cryptocurrency video games are just web games based on microtransactions, and this has always been considered a major scourge in the video game industry.
But they did succeed, because these web games began to attract celebrities, a lot of money and a lot of users.
“Gods Unchained” is a blockchain-based trading card game similar to “Heartstone”. Its cards are all represented by NFTs and the current market value is 10 million US dollars.
“Axie Infinity” is a crypto collectible game based on Ethereum. The content of the game is mainly monster fighting. The game raised $860,000 through token sales in November last year.
Another licensing company, Animoca Brands, signed Care Bears, Shaun the Sheep, the Smurfs and Bratz. As part of the licensing agreement, these brands will appear in Animoca’s upcoming virtual Second Life simulation game “Sandybox”, which will be released in public beta this month.
Large game studios, such as French game company Ubisoft, have also tried NFT. Ubisoft has created an NFT-based game for “Raving Rabbids”; the protagonist in the game is a small, very scary cartoon rabbit. This game called “Rabbit Tokens” allows users to “steal” NFTs from other users.
The prices of many NFTs have also gone up. In December last year, a collector bought a virtual Monaco racing circuit for $223,000.
NFT and art
All NFT roads eventually lead to crypto art, which embodies the characteristics of cryptocurrency innovation and rebellion. Benefiting from the true digital ownership it provides, artists flock to NFT in droves, which means that people finally have a reason to pay for digital art.
Nonfungible.com is an indicator website that tracks the non-cryptographic financial industry. The website shows that in the second half of this year, when the DeFi boom and the Bitcoin bull market arrive, the situation of crypto art has begun to improve.
However, when the NFT technology brought the artists together, the original clean circle was full of copper smell. Some people enter the field of crypto art to make money, while others find that users are willing to pay unimaginable amounts of money for some NFTs.
In October of this year, artist Ben Gentilli sold an NFT-related artwork at the influential Sotheby’s art auction for $131,250. This artwork is called “Block21”, and it depicts the “digital portrait” of Bitcoin creator Satoshi Nakamoto. This circular panel is one of the 40 panels in the work, and it contains thousands of numbers that make up the original Bitcoin code.
Auction update: Robert Alice’s “Block 21” (42.36433°N, -71.26189°E), a work based on blockchain technology was sold at a price of $131,250, which was more than 7 times its highest estimate.
The above coordinates show the location of this NFT, which is currently in New York.
Other well-known artists who joined the NFT battle this year include 87-year-old Argentine comic artist Jose Delbor, whose work with Canadian crypto artist Trevor jones sold for $111,377.
However, the hottest star in the NFT art circle is a famous digital artist Michael Winkelman (known as Beeple), who has created music videos for “Flying Lotus”, as well as for Nicki Mina and Justin Bieber. Others have created the visual effects of the concert. Before the U.S. election, he sold a work of art bearing the birth of Donald Trump and Joe Biden for $666,666.60.
This is her work! ! The auction ended with a last-second bid of $777,777. This brings the total sales of Beeple’s collection in the primary market to more than 3.5 million US dollars.
Congratulations to the legend BEEPLE, and thank the entire community! !
beeple’s all works
This is the work! The last auction of the day, including 20 auction items, ended at 6 pm Eastern Time.
Current price: $130,000
In December last year, on the Nifty Gateway, an art market supported by Germini, Beeple’s work was sold for an astonishing $582,000 in five minutes. A few days later, an investor bought a Beeple artwork for $777,777 at the last second; the total turnover of this auction exceeded $3.5 million.
One thing is certain: In 2020, NFT has realized its value.