2021 was a ‘Year of Renaissance’ for NFTs. From the mainstream perspective of the market, after the crypto cat project boomed in 2018, NFTs finally in 2021 ushered in a concentrated outbreak where many flourished. On the one hand, Opensea has taken the lead in NFTs trading, forming a blue-chip phalanx of NFTs led by CryptoPunk, BAYC, Coolcat and other projects. On the other hand, GameFi projects represented by Axie Infinity combines NFTs with DeFi, successfully bringing the brand-new economic model of Play to Earn to the mainstream market. In the great bull market, NFTs succeeded in overtaking the curve to attract main market funds, and it has become an important asset class in the blockchain world. Since 2022, the NFTs market has inevitably been affected by the macro market condition. After the frenzy, market participants began to rethink the fundamentals of the NFTs track: What will be the future of NFTs? What will be the next NFTs hotspot?
The current NFTs market can be classified into at least two relatively independent categories: Digital collectibles and utility NFTs. Most PFPs would fall into the former category, whose value comes from the scarcity, hence the valuation is very much subjective. Utility NFTs are quite different as the valuation is supported by their intrinsic value.
GameFi assets are an iconic example of utility NTFs. The value of GameFi assets can be clearly quantified based on the potential cash flow value derived from the P2E tokenomics. Thus, DeFi infrastructure is potentially very relevant to the utility NFTs with a similar significance as to the fungible token assets.
Shape The Markets: An Overview Of DeFi Infrastructure
So how would the DeFi infrastructure be built in the NFTs market? We can look at the DeFi world. Based on the magnitude of significance, we can easily identify the four most essential pillars that support the whole DeFi world: Uniswap, AAVE/Compound, Synthetix, and YFI. But why?
The formation of any financial…
