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Author Topic: DeFi must copy NFT Boom to gain mainstream acceptance  (Read 24 times)

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  • DeFi must copy NFT Boom to gain mainstream acceptance
    « on: April 16, 2022, 09:38:57 AM »

     
    Cryptocurrencies as a store of value are well accepted. BTC, ETH, and even popular altcoins like Doge have made it to the mainstream. Understand that mere possession of tokens or non-fungible assets is only one (very limited) aspect of the larger promise to be achieved. peer-to-peer electronic cash.
    The things we can do with these assets, the world of DeFi , can potentially change the way people around the world spend, invest, and use their money. I mean, if (and this sometimes seems like a big if), normal people will embrace it. Lack of awareness and complicated onboarding processes have hampered DeFi adoption despite its incredible potential. But now we are at a critical turning point. How we take advantage of the change and the interest that is growing thanks to the development of NFT will be key to the future of DeFi.
    DeFi: first steps
    The first step in increasing DeFi adoption is simply awareness. Consider the following Google Trend Chart comparing NFT and DeFi research over the last 12 months (yes, the red line at the bottom represents DeFi research).
    In March 2021, the cast of Saturday Night Live rapped on NFT and the trend has only seemingly continued with every major Taco Bell company for IL TEMPO Magazine launching their own NFT collection. Within this consumerization of NFT, there are lessons that can be applied to the broader world of DeFi if we truly want to attract the next billion users to this space.
     
    What is really amazing about the widespread awareness of NFTs is that it all happened despite the surprising concentration in the market. According to a report from the beginning of this year, almost all NFTs in existence are owned by a group of fewer than 400,000 people. So even if a small percentage of the population owns an NFT, everyone knows about it. The New York Times credits the success of NFTs to the modern "attention economy."
    Defi need simplicity
    Beyond awareness, the second step to increasing DeFi adoption is to make it easier. The NFT pop culture phenomenon has also been fueled by the fact that compared to the mechanics of DeFi, NFT development are relatively simple to perform and understand.
    While the true consumerization of NFT is still a long way off, it is still far ahead of DeFi. Opensea , despite its challenges and seemingly growing list of user frustrations, is a decent platform that has made buying NFTs as easy as a few clicks. But there are other platforms that actually make the process even easier: Coinbase 's pending wallet will allow anyone to buy an NFT with a credit card and rapidly expand the universe of potential NFT collectors.
    Agriculture production
    Anyone who has participated in DeFi and deposited cryptocurrency into a yield farm , for example, knows that the opposite tends to be true in our industry. Complicated user interfaces, often incomprehensible documents, and a seemingly endless maze of disparate applications are just a few of the huge barriers to entry.
    For this reason it is appreciated that less than one percent of cryptocurrency holders have participated in DeFi applications despite the impressive rewards. Simple participation procedures provide up to 10% APY, while more complex strategies can generate 100% and more each year. The irony here is that similar rewards are often what drove mainstream awareness of NFTs.
    Need better and cleaner user interfaces with intuitive up and down ramps, but all of that will come in time. The answer right now may lie in the NFTs themselves.
    upcoming trends
    Many interesting DeFi projects are already implementing NFT strategies the combination of NFT and DeFi is already expected to be one of the biggest trends of 2022, and  (and vice versa). For anyone who has used Uniswap V3 to earn fees in exchange for providing liquidity, the simpler role NFTs can play in DeFi is already clear. Uniswap V3 liquidity positions are represented as NFT (ERC-721 token) and can also be displayed as a generative image. But imagine a similar project where this takes it a step further: what if stunning artwork is what draws people to a project with the added bonus of paying big harvests?
    There are a number of interesting projects that have already combined NFT with DeFi. Axie Infinito , an Ethereum -based game where players buy NFTs from monsters or Axies and engage them in battle, is one of the most popular. Axie players must own NFTs to play and earn tokens that can then be deposited into yield farms for additional rewards.
    Marrying NFT and DeFi
    Other projects combining NFT and DeFi include NFTFi, a project that allows people to use their NFTs as collateral for loans, or NFTX, which enables community-owned index funds for one token to represent ownership in many NFTs. The best designs combining DeFi and NFTs will provide incredibly simple and user-friendly user interfaces while providing features like making NFTs more liquid.
    The development of NFTs can solve the challenges of adopting DeFi by increasing awareness and making it easier to conduct business and financial transactions effectively. We have the world's attention, what we do next will be critical to the growth of our industry.


     

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