A year ago, DeFi was still a strange concept, and NFT remained unknown to the general public. However, both DeFi (Decentralized Finance) and NFT have witnessed rapid growth in the first nine months of 2021. As a result, these two trends will undoubtedly shape the global economy over the next decade.
MetaPoo is one of the first DeFi Protocols that tightly integrates NFT into its products. However, to comprehend the goals and objectives of MetaPoo, investors and users need to be knowledgeable about NFT, DeFi and the nature of digital assets.
What is DeFi?
DeFi is the abbreviation of Decentralized Finance, is a new soft industry that has recently grown in popularity. DeFi refers to financial activities such as trading, lending, borrowing, and saving that do not require the involvement of a centralized authority. Instead, the operations of DeFi are governed by Smart Contracts. With the continuous development and expansion of the Blockchain industry, making it the fourth revolution of humanity, DeFi also has been experiencing significant growth.
The first appearance of DeFi was in the period 2018–2019, with the launch of 2 well-known dApps that are still in use today, namely Uniswap and Maker DAO. Currently, the Total Value Locked of DeFi Protocols is about $224 billion. This figure has grown 200 times from the same period in 2020 (By September 2020, DeFi’s TVL is around $1 billion) (Source: https://defillama.com/home)
However, while DeFi is still suffering several unresolved difficulties in terms of Scalability, Liquidity, Security, and Capital Efficiency, the Crypto world is introduced to NFT and NFTfi.
What are NFTs and NFTs Booming?
In economics, a fungible asset refers to something readily interchangeable, such as money.
With money, you may exchange a £10 note for two £5 notes and the value will be the same.
However, if something is non-fungible, it is impossible to do so. In fact, a non-fungible asset has unique properties that prevent it from being interchanged with anything else.
For instance, it may be a house or a painting such as the Mona Lisa. You can photograph the artwork or purchase a print, but there will only be one original.
NFTs are “one-of-a-kind” digital assets that can be bought and sold like any other pieces of property, but have no tangible form. Most current Blockchains support the formation of an NFT, especially in the context of NFTs surging recently.
We are witnessing a massive rise in NFT adoption as a result of the recent NFT boom. More specifically, the total transaction value of NFTs was recorded as ~$380Mn in 2020. In only the first half of 2021, that number jumped to ~$25Bn — a 60x increase in just 6 months! The most expensive NFT was also just sold earlier this year in March for ~$69Mn. According to those statistics, it would be absurd to deny that NFT is the current growing frontier within the blockchain and cryptocurrency field.
Despite the recent exponential rise of NFTs, most NFTs remain just collectibles with no other tangible utility. Many collectors spend hundreds of thousands of dollars on these NFTs just to have them sit in their wallets idle. This is mostly due to the absence of Intrinsic Value in existing NFTs.
What is Value and Intrinsic Value?
Value is the innate quality of a thing that makes it desirable to a certain extent. This value is connected to a variety of tangible and intangible characteristics, most notably scarcity.
The economic value of something, therefore, depends on its quality and scarcity.
Most current NFT tokens are not guaranteed by traditional assets, making most people think that NFTs are meaningless tokens with no intrinsic value.
However, non-fungible tokens have a lot of use cases, which makes us believe that it has a significant intrinsic value.
The primary value of NFTs comes from the fact that they are unique assets, encrypted, and cannot be counterfeited. Scammers can fake a bag, a luxury watch, money, or a rare painting. An NFT, on the other hand, cannot be faked.
The next value of an NFT usually comes from its scarcity. NFTs typically have a limited supply, and when the supply-demand balance is off, the price of NFTs rises consequently. The intrinsic value of an NFT stems from the fact that someone will always desire to own it.
Aware of that, MetaPoo is one of the leading protocols in combining DeFi and NFTs. NFTs of MetaPoo all have intrinsic value and will be tightly integrated into its MetaPoo’s products.
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