Editorial notes (vol.19) – NFT financialization
Gm! It is time for a new Explore Screen update and this week we are diving back into the world of NFTs.
Lately, there have been many discussions about BandDAO and the potential liquidity crisis due to NFT loan liquidations. However, this space is bridging the gap between DeFi and NFTs and is rapidly evolving with new projects enabling greater utility of NFTs themselves. In this week’s Explore Screen feature – NFT Financialization we’ll explore just that.
In this collection of projects, we’ll check out a few products you can try out or start utilizing right now. Generating greater liquidity, enabling additional ways of extracting value from your NFTs, options markets, and other use cases are all building blocks of the financial layer of NFTs. If you'd like to see what they look like and how you can take advantage of these new tools, you've come to the right place.
Below, you’ll find some that are at the forefront of this space and have caught the attention of our team.
Access the NFT options market on Putty Finance.
With Putty, users can create buy and sell limit orders for both put and call options on a single NFT, ERC-20 asset, or a basket of assets.
A user's position is represented by an OPUT, an NFT that holds information about the user's position and can be transferred between wallets. Putty's functionality includes the ability to create an option for a specific NFT in a collection, the floor of that collection, or any ERC20 token, while also being able to contain a basket of assets
Sudoswap – Trade NFTs with the lowest fees and no royalties using customizable bonding curves.
SudoSwap is a fully on-chain, gas-efficient decentralized NFT marketplace. What makes Sudoswap different is the ability for buyers and sellers to swap into customizable bonding curves created by liquidity providers who have full control over their pool’s pricing and can adjust at any time. With Sudoswap, users can:
Create pools that gradually buy or sell NFTs along price curves
Provide liquidity to pools that buy and sell NFTs to earn fees
Directly list their NFTs at fixed prices.
Additionally, say goodbye to the needed 10% price increases just to break even. Trading on Sudoswap means you only pay a 0.5% fee, which is substantially lower than on most platforms and doesn’t require you to pay for the royalties which are usually in excess of 5%.
Tessera (previously Fractional) – Buy, sell, and mint fractions of NFTs.
Tessera enables collective ownership of NFTs, by allowing you to buy, sell, and mint fractions of NFTs. Through Tessera, it becomes easy to buy and own a percentage of an NFT. This allows users who have been previously priced out of certain NFTs or artists (such as Beeple) to be able to buy a piece of their work. Alongside this, fractionalizing an NFT allows the original creator or owner to generate some liquidity from their asset without selling the entire piece.
Form a party, join forces, and buy NFTs as a team through PartyBid.
PartyBid lets people pool their capital together to purchase NFTs as a team. Anyone can create or join a Party to collectively bid in an NFT auction or purchase an NFT that’s on sale at a fixed price.
If the party pools together enough ETH to make a purchase or win an auction, all of its members become collective owners. The NFT then gets fractionalized into ERC-20 tokens, thanks to Tessera, and those tokens get distributed to the party members based upon their contributions. If the party later decides to sell the NFT, all of its members receive a cut of the profits proportional to their token holdings.
Seamlessly obtain liquidity and yield with Drops by using your Metaverse assets.
With Drops, you can get instant NFT-backed loans up to 30% of your NFTs value. It currently supports assets such as Yuga Labs, CyberBrokers, Moonbirds, and ArtBlocks. However, they will be expanding their offering to others as well. Simply select a lending pool, deposit your NFT as collateral, borrow up to 30% of the NFTs floor price, and manage your credit to avoid potential loan liquidation.
Charged Particles – encapsulate any digital asset into a nested NFT.
Charged Particles is an NFT protocol that allows you to take your NFT and give it a smart wallet that enables you to deposit other assets inside of that NFT – put other tokens like ERC-20 tokens, DeFi interest beading assets, or other non-fungible tokens. The original NFT becomes a basket of tokens that you can timelock. Even though you can transfer or sell the NFT, you or anyone else can’t take out the contents of it until the timelock expires.
Check out their dApp on Polygon or Ethereum and try to create a brand new asset class known as a Nested NFT or simply buy and sell the existing ones on their marketplace.
Lend your NFTs with JPEG’d and earn yield in DeFi.
JPEGd is an NFT lending platform. It enables holders of certain NFTs to obtain a line of credit on their assets while still retaining ownership. After obtaining a line of credit on their NFTs, users can earn yield in DeFi.
NFTX – A platform for creating liquid markets around illiquid NFTs.
By minting vTokens through depositing NFTs into NFTX vaults, users get to unlock and extract even more value from their NFTs. Content creators can earn protocol fees in perpetuity, by launching on the NFTX protocol, distributing NFTs in the form of vTokens — ERC-20 representing a claim on an NFT, and creating a liquid market for new creations. Other users can tap into the intersection of DeFi and NFTs by minting vTokens, instantly sell any NFT by minting it as an ERC-20, swapping on a DEX, and much more.
Hyksos – The first self-repaying platform to lend and borrow in the NFT space.
In essence, Hyksos is a peer-to-peer Web3 platform connecting yield-bearing NFT owners and ERC-20 providers directly via a permissionless smart contract architecture.
By using eligible NFTs (Currently CryptoKongz and EtherOrcs as collateral to get a loan, borrowers can access instant liquidity, while lenders earn yield - by supplying tokens that are otherwise not in use – boosted with an auto-compounding mechanism.
Borrow against your NFT or lend wETH and DAI on NFTfi to earn a juicy yield.
NFTfi is the leading liquidity protocol for NFTs. It allows NFT owners to use the assets they own to access the liquidity they need by receiving secured wETH and DAI loans from liquidity providers, peer-to-peer, in a completely trustless manner. NFT liquidity providers use NFTfi to earn attractive yields or — in the case of loan defaults — to have a chance at obtaining NFTs at a steep discount to their market value.