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The fusion of NFT and DeFi: GameFi becomes a new trend in the crypto assets market
The NFT market is booming, merging with Decentralized Finance to form a new trend.
Recently, NFTs (Non-Fungible Tokens) have become a hot topic in the cryptocurrency field. Data shows that the average price of NFT goods skyrocketed from below $50 in 2019 to over $100 in August-September 2020, reflecting a significant increase in users' willingness to pay for digital products.
NFT represents a "unique" digital asset that is non-fungible and indivisible. Unlike fungible tokens such as Bitcoin, each NFT is unique, just like artwork in the real world. Currently, Ethereum's ERC-721 standard is the most popular NFT protocol, but other public chains like Tezos and Polkadot have also launched their own NFT development modules.
The NFT market performed strongly in 2020, with an average daily transaction volume increasing by approximately 105% year-on-year. Initially, NFT applications were concentrated in the fields of gaming and digital art collectibles, but with the rise of DeFi( decentralized finance), the integration of NFTs and DeFi has become a new direction for development.
This fusion is called "GameFi," which combines the entertainment of gaming with financial incentive mechanisms. For example, some projects allow users to "mine" or "bid" using NFT tokens, increasing the utility of NFT assets.
A typical example is the yinsure.finance project based on Ethereum, which applies NFT technology to insurance contracts. Users can generate NFT tokens based on their policies, which can be freely traded on NFT platforms. It was reported that the project achieved a trading volume of 5000 ETH in its first month.
However, with the increase in users, the high Gas fees and security issues of the Ethereum network have become a major challenge for developers. This has provided opportunities for other public chains like Tezos. Tezos has attracted more and more attention with its high security, low energy consumption, and rich development environment.
The Tezos ecosystem is rapidly developing, including the construction of infrastructure such as price oracles, decentralized exchanges, and stablecoin protocols. In the third quarter of 2020, the deployment of smart contracts on the Tezos network increased by nearly 70%.
With the maturation of the NFT market and the continuous innovation in Decentralized Finance, we can expect to see more interesting fusion applications emerging. These innovations may bring new value and uses to digital assets, driving the development of the entire cryptocurrency ecosystem.