The Intersect Between NFTs & DeFi – NFT Tutorials EPI 4

What is the intersection between DeFi and NFTs?

DeFi is short for ‘Decentralized Finance’.

I’m not going to go in depth here but basically it’s blockchains solution to banks, exchanges, financial institutions where tradtionally there’s been a ‘central body of authority’.

Just like how you bought crypto on coinbase, you can buy crypto on uniswap which is run by the people with no intermediary or central custody of your assets.

Still confused?

Think of when you go to the airport and need to exchange your currency for your destination country’s currency.

You give them $100 USD, and the currency exchange gives you $5,000 Indian Rupees or whatever.

Where did these Rupees come from? The exchange right?

With DeFi or Uniswap specifically and other exchange protocols, this money comes from a POOL of people that deposit there money there to be used for people to trade.

The benefit?

A split in the % fees uniswap charges. They distribute this to the people providing these funds or liquidity!

Instead of keeping their money in Metamask or Coinbase or an exchange, they deposit it here, get a share of fees they can cash out any time.

How cool is that!

So what’s this got to do with NFTs?

Projects like MEME, (among many others), are experimenting with this staking concept.

You buy MEME, you provide liquidity or lock it up and get points generated daily which you can cash in for MEME cards/collectibles.

They’ve started doing Artist drops, some selling for $36k!

So now, not only are you getting fees as revenue but also cards that you can collect or sell on the market!

Some of these have sold for 80+ ETH on opensea!

Not to mention the MEME coin going from a free airdrop to up to $2,000+ each!

Isn’t that crazy?

We’re also see projects like Aavegotchi come in and make a whole universe where you can have a tamagotchi that improves the more you stake on the Aave platform.

A lot of experiments happening here and the two industries are coming together to provide benefit to all users.

No doubt we’ll see some awesome projects come out of this!

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