What is DeFi and What is NFT-integrated DeFi?
New to blockchain, DeFi, NFTfi? No worries, the MetaPoo team has prepared a series of articles to provide you with everything you need to know. First, let’s define DeFi.
This article will sum up the key elements you need to understand about DeFi and NFT-integrated DeFi and of course, the MetaPoo itself.
What is DeFi?
DeFi stands for “decentralized finance” and refers to the ecosystem comprised of financial applications that are being developed on top of blockchain systems. The system removes the control banks and institutions have on money, financial products, and financial services.
To understand decentralized finance and how it works, it helps to understand how centralized finance differs from DeFi.
In centralized finance, your money is held by banks and other corporations, whose overarching goal is to make money. This financial system is full of third parties who facilitate money movement between parties, and each one charges different fees for using their services.
For example, say you purchase a fancy sports car using your credit card. The charge goes from the merchant to an acquiring bank, which forwards the card details to the credit card network. The network clears the charge and requests a payment from your bank. Your bank approves the charge and sends the approval to the network, through the acquiring bank, back to the merchant. Each entity in the chain receives payment for its services, generally because merchants must pay for your ability to use credit and debit cards.
All other financial transactions cost money; loan applications can take days to be approved; also you might not even be able to use a bank’s services if you’re traveling abroad.
Decentralized finance eliminates intermediaries by allowing people, merchants, and businesses to conduct financial transactions through emerging technology. This is accomplished through peer-to-peer financial networks that use security protocols, connectivity, software, and hardware advancements.
From anywhere with an internet connection, you can lend, trade, and borrow using software that records and verifies financial actions in distributed financial ledgers. A distributed database is accessible across various locations; it collects and aggregates data from all users and uses a consensus mechanism to verify it.
Decentralized finance uses this technology to eliminate centralized finance models by enabling anyone to use financial services anywhere regardless of who or where they are.
DeFi applications give users more control over their money through personal wallets and trading services that cater to individuals.
To do this, decentralized finance uses blockchain technology. A blockchain is a distributed and secured database or ledger. Applications called dApps are used to handle transactions and run the blockchain.
In the blockchain, transactions are recorded in blocks and then verified by other users. If these verifiers agree on a transaction, the block is closed and encrypted; another block is created that has information about the previous block within it.
The blocks are “chained” together through the information in each proceeding block, giving it the name blockchain. Information in previous blocks cannot be changed without affecting the following blocks, so there is no way to alter a blockchain. This concept, along with other security protocols, provides the secure nature of a blockchain.
What is NFT-integrated DeFi?
MetaPoo is the first NFT-integrated DeFi protocol on Solana, our NFT has intrinsic value tied heavily with every product in our ecosystem. It is not the first NFT-integrated DeFi protocol, though.
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.
Aware of that, MetaPoo is one of the leading protocols in combining DeFi and NFTs. That is NFT-integrated DeFi.
But why do we integrate NFT to DeFi?
Well, in the last 2 years, NFT has become a new normal for virtual collectibles. People spend millions of dollars trading NFT collectibles. However, by studying the mechanism of NFTs, we believe that NFT can be much more than just collectibles. To increase the intrinsic value of NFTs, we have given specific features to MetaPoo’s NFTs that allow holders to receive extra benefits just by holding or staking their NFTs.
Take a look at our first generation of NFT, the Poo Series. NFTs from Poo Series will enable users to achieve a higher ROI when farming/staking on MetaPoo’s platform.
When the Poo Series NFT is staked along with the LP tokens, it acts as a booster providing a percentage boost on the rewards earned from that pool or vault. The additional rewards from NFT boosting will be calculated by multiplying the booster NFT’s percentage boost with the total rewards earned from staking in that pool.
It means that you can enjoy a better DeFi experience, in this case, a better income, while owning a unique NFT as a rare collectible.
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