Some thoughts about NFTFi: NFTs, as a more easily understandable trading asset and a carrier for more attributes in SocialFi and GameFi, will continue to exist.

NFTs will persist as a comprehensible trading asset and a carrier for attributes in SocialFi and GameFi.

Researcher 0xWendy from IOSG Ventures compared and analyzed the NFTFi and DeFi fields in terms of overall market data, trading markets, and lending. Although there are significant differences in the gameplay of DeFi and NFT, the trading market and lending platform of NFTFi are still critical, and its economic model is very similar to DeFi from a bottom-up logic perspective.

If we compare NFTFi and DeFi from the perspective of overall track data, even without considering market size and volume, the ratio of coin price to revenue for NFT is still much higher than that of top DeFi projects. This means that even if the current NFT-related coin price is low, it may not necessarily be the bottom. In terms of the trading market, during the last bull market, Opensea was dominant, followed by X2Y2, Looksrare, and others. The token incentive economic model of the latter two is prone to a Davis double kill of falling coin prices and trading volumes. After the emergence of Blur, the focus was put on serving Pro traders, greatly enhancing the financial attributes of NFTs. The royalty dispute has reduced trading friction to a certain extent. Blur only has the attribute of airdrop rewards, so although Blur’s trading volume and market share are unquestionably Top 1, its coin price has been declining all the way, and the incentive mechanism of airdrops is bound to decay over time.

In terms of lending, Blur also occupies more than 90% of the market share, with a total trading volume exceeding 1 billion US dollars and more than 70,000 cumulative matched lending transactions. In the two months since Blend was launched, the total number of borrowers has exceeded the total number of users of the NFT lending leader Bend DAO in one year. For Blend’s P2P lending design, it partially avoids the platform’s bad debt risk, and players bear their own profits and losses. For BendDAO, its token adopts the ve model, which can be said to be one of the best models in DeFi. The staking mechanism is relatively complete, and the team should have a deep understanding of the token model. However, in practical operation, I think one of the biggest problems is that there were some issues with the user selection criteria for the initial IFO, resulting in insufficient user claim motivation, lower-than-expected cold start effect, and token backlog.

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Reference: https://twitter.com/0xWendy99/status/1677665852827774976

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