It’s strange that a collection of photographs sold for over $69 million…
Or that a pixelated portrait of a fictional character brought in $23 million…
And that an image of a monkey brought in $3.4 million.
Seems odd, doesn’t it?
But, that’s the honest truth.
Unique images, graphics, and other forms of digital art are the rage, nowadays.
Holding the right one can fetch a handsome amount. Non-Fungible Tokens (NFTs) have been around for a few years and have created a completely new market within the crypto and collectors’ industry.
But What Are NFTs?
You have probably heard the term NFT being thrown around a lot. From reading up on the news to that cousin of yours that doesn’t seem to talk about anything but flipping NFTs, digital tokens are everywhere.
That begs the question, what are NFTs?
Simply put, NFTs are crypto tokens that are unique and one of a kind. The Dollar bill in your pocket can be exchanged for another Dollar bill. They are essentially the same in value and therefore, “fungible”.
On the other hand, your house is not like your neighbors’ or anything else on the market. It has its own value and the one next to you is different. You cannot swap yours with your neighbors. Both are unique.
NFTs are just like that.
The tokens are not exchangeable with another because they are unique and have different worth.
In other words, they are Non-Fungible Tokens.
What Benefits Do NFTs Offer?
NFT is most famous for digital art.
Like any art, the benefits reside in the art itself, and the value driven by people’s perception of it.
Remember the $69 million art we talked about at the start?
Beeple—the artist behind it—produces digital artwork, and a collection of the first 5,000 (as a single piece) auctioned off fetched that insane amount.
Holding digital art is one thing… but with demand rising, successful collections can be a good source of profits, where you invest in an NFT in hopes of selling it at a higher price (flipping).
Should I Get an NFT Too?
NFTs can be a good way to appreciate modern art and even make money. However, consider a few things before you do.
- Personal Satisfaction of holding an appreciative art piece.
- Loyalty Rewards, ie., discounts for having membership in a private club
- Assets have the same security as any blockchain asset.
- An option if you want to create investment diversity in your portfolio.
- NFTs may offer perks like royalties and VIP access to the creator’s collection.
- Difficult to decide which one is the next golden goose.
- Can be an expensive investment.
- Value appreciation may not be up to your expectations.
NFTs Beyond Art: The DeFi Use
In recent times, NFTs are integrating different characteristics that give owners more than just an expensive piece of art.
Certain aspects can be either coded in the NFT, or non-fungible property can be used itself.
- Collaterals: NFTs’ value can be leveraged as collateral for crypto loans.
- Fractional Ownership: A high-value asset, such as real estate, can be co-owned by different individuals, their share presented by NFTs.
- DAO Governance: DAO members can prove their membership by connecting their wallets holding membership NFTs with a protocol’s smart contract.
- GameFi: In-game assets and avatars as NFTs, which can be not only used within the game but can be even sold in secondary markets for profits.
Talking about NFT and Defi, Algem is launching the first NFT with DeFi utilities on Astar Network. If you want to know more, visit the Algemantis website.
Algem is a decentralized application built on the Astar Network and offers two main features: liquid staking and liquid lending. As their names suggest, these two options let ASTR holders keep their assets liquid while putting them to work. Also, the liquid staking and lending solutions let users use Algem’s liquid nASTR tokens across Astar’s Defi ecosystem to earn staking rewards and make more money. In doing so, Algem supports other Defi protocols by providing liquidity and creating a sustainable and cooperative ecosystem on the Astar Network and Polkadot.