NFTs and its outstanding role in the DeFiFarms ecosystem
Capturing emerging technology trends since the beginning of this year, DeFiFarms has integrated the NFT standard to provide a dynamic ecosystem with extremely attractive returns.
What is NFT?
NFT stands for “Non-fungible token”, which is a unique token that cannot be replaced by another NFT. NFTs typically represent some sort of digital asset, or tokenized asset from the real world.
The early days of NFT associated with the name CryptoKitties caused a stir in the market when it clogged the Ethereum network at the end of 2017. Now after more than 3 years of growth, the NFT ecosystem has gradually improved with many diverse pieces.
NFT fever in 2021
The NFT sector has seen exponential growth, tripling the number of transactions since the beginning of 2021, and this trend has not abated even during major market pullbacks. in May.
According to a report by market tracker DappRadar, the average number of NFT transactions has increased by nearly 300%, from 21,815 per day in January, to 82,373 in May (as of May 28). This number spiked even higher when the prices of cryptocurrencies began to plummet on May 12, with sales increasing to nearly 94,000 NFT transactions per day.
Data from Canada-based market analysis firm Non-Fungible shows that the total NFT market capitalization in 2020 will reach $338 million. Mason Nystrom, an expert of Messari, predicts this number by 2021 could reach more than $1.3 billion.
According to Nystrom, the art industry has gradually recognized the value of NFTs. Sales for the industry’s NFT art sales grew $120 million from inception to December 2020. He also highlighted the potential in the collectibles and games categories, and believes that the critical infrastructure that supports NFT will launch in 2021.
Several celebrities have also attempted to jump on the NFT bandwagon, with Lindsay Lohan selling a Daft Punk-themed NFT for $15,000. It also attracts the attention of large corporations, most notably the NBA. By partnering with CryptoKitties developer Dapper Labs to release NFT collectibles as NBA Top Shot “moments”.
Statistics in February, more than 34,000 people traded basketball cards on Top Shot’s secondary market every day, generating transactions worth more than $46.7 million.
Growth despite market volatility
The drop in Bitcoin price led to widespread panic with nearly 1 million leveraged transactions being liquidated, leading to severe network congestion and skyrocketing transaction fees on the Ethereum network.
However, skyrocketing transaction fees did not stop NFT transactions. Instead, many have turned to other blockchain-powered marketplaces.
The NFT market still has the problem that the number of transactions has increased but the value per transaction has started to decrease due to the influence of the general situation of the correction of the whole market. During the first 11 days of May, nearly 15 million USD were traded daily. However, soon after, the volume dropped rapidly to less than 6 million USD per day.
Even so, the field still attracts the attention of more and more big names such as Outlier Ventures, Digital Finance Group, Morningstar, Blockhype, Spark Digital Capital, CEO of mobile developer Altitude Games Gabby Dizon and Polygon (Matic) co-founder, Sandeep Nailwal.
Especially with the launch of Binance’s NFT Marketplace in June, NFT will still maintain the heat in the near future, not just a trend that soon blooms and fades.
Role of NFT in DeFiFarms
DeFiFarms is one of the yield farms with NFTs protocol that automatically buys back, mines and creates automatic liquidity, this is also an AMM decentralized exchange running on the Binance Smart Chain platform.
DeFiFarms not only possesses many outstanding advantages over Centralized Exchanges, but also has the potential to bring more attractive profits than current Decentralized Exchanges and Yield Farming platforms.
DeFiFarm’s staking process will be the same as most DEXs today plus a new innovation powered by NFT. By using NFT, DeFiFarms allows stakes to become more dynamic. Instead of stakes fixed in the user’s wallet, it is linked to the attestation document so that the NFT is transferable. Meaning, when you become a Liquidity Provider and reserve your tokens, you not only earn rewards, but also receive NFTs of equal value. This is called NFT Farming.
In other words, DeFiFarms adds a new layer to Liquidity Providers and Yield Farmers earn more by allowing them to “move around” locked values of the Liquidity Providers Token (LP Token).
When you hold a certain amount of DEFIY/BNB liquidity tokens in the DeFiFarms platform, LP tokens are locked in the staking contract, but their value is not superfluous. At the time of staking, the system will generate a new NFT, protecting the digital asset locked inside it.
This asset of yours will be stored on-chain in this NFT’s metadata. You can then enter the market and trade that NFT for the market value of the LP token along with the accumulated rewards. When you or the end user unsubscribe, using NFT as proof of ownership, the NFT will be burned and the deposit plus unconverted rewards will be transferred back to your wallet.
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