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NFT + DeFi - New use case opens new potential for NFT and blockchain

  1. How can NFTs be integrated with DeFi?

NFT is the most explosive trend in the crypto market in the past few years. It is also thanks to these somewhat not really aesthetic cryptographic artworks, that the concept of crypto and blockchain has become more popular than ever. However, NFT and its potentials and use cases are not limited to just encrypted artworks, in-game items or avatars. When combined with DeFi - decentralized finance, they open up new potentials and opportunities for NFT and blockchain. Find out with BHO Network through the article below!

DeFi, or decentralized finance, is a significant concept and field in the cryptocurrency market. DeFi provides opportunities for access to decentralized, convenient, anonymous, and efficient financial services. Key activities in DeFi include lending, borrowing, providing liquidity, and trading on DEXs, which create value for the market and offer advantages over traditional financial services.

How can NFTs be integrated with DeFi?

At its core feature, NFTs provide a solution for verifying digital identities on the blockchain. Each NFT represents a unique and non-replicable value that cannot be counterfeited. If you imagine for a moment, this is similar to ownership rights in the real world, such as owning a house, stocks, bonds, and debt, but with greater transparency and security. NFTs can help tokenize these ownership rights, or in other words, tokenize these assets, bring them onto the blockchain, and integrate them into the DeFi market, increasing the liquidity of these assets and reducing the complexity of legal documents, paperwork, and more, while also providing absolute transparency.

In addition, with its features, NFTs can also be applied in many aspects of DeFi, such as:

  • Loan collateral: Typically for DeFi, the borrower will have to collateralize an amount of digital assets that are worth more than than the value of the loan as security. With the floor price of many NFT collections now can be identified easily, NFT artworks can now be used as collateral for loans on DeFi protocols with no trouble.

  • Staking: Can be used as collateral for a loan, then of course NFT can also be used for staking, generating passive income. Many NFTs have been designed to give owners more features and benefits, including staking capability. Several projects have created staking pools specifically designed for certain NFT collections.

  • Protocol's governance with NFT: The form of protocol governance by giving governance voting rights to holders who held a large amount of tokens is quite common in DeFi platforms. Some protocols have issued administrative rights in the form of special NFTs.

The combination of NFTs and DeFi creates a huge advantage for both fields, and more importantly, for the entire crypto market. DeFi creates more value for NFTs, while NFTs help to refine and expand the DeFi market. The relationship between NFTs and DeFi is a perfect symbiosis and promises to open up limitless potential for the crypto market. We, as investors and pioneers of Web3, are witnessing the beginning of a revolution. With the continuous development of new applications such as the new combination of NFTs and DeFi, we can completely believe that blockchain technology will surely bring many surprises and completely change the internet world as we know it.

The combination of NFTs and DeFi creates a huge advantage for both fields, and more importantly, for the entire crypto market. DeFi creates more value for NFTs, while NFTs help to refine and expand the DeFi market. The relationship between NFTs and DeFi is a perfect symbiosis and promises to open up limitless potential for the crypto market. We, as investors and pioneers of Web3, are witnessing the beginning of a revolution. With the continuous development of new applications such as the new combination of NFTs and DeFi, we can completely believe that blockchain technology will surely bring many surprises and completely change the current internet world.

To store NFTs and cryptocurrencies while accessing DeFi protocols, investors need to use a multichain web3 wallet that can both hold NFTs and access Dapp browsers.

3S Wallet is a Web3 wallet developed by BHO Network. With the three pillars of Simple, Secure, and Safe, 3S Wallet has many advantages such as Multichain, easy investment portfolio management, the ability to store and trade NFTs, a user-friendly customizable interface, on-ramp payment capabilities through Moonpay, and a smooth Dapp browser. 3S Wallet is a great choice for investors looking to explore and experience the world of NFTs and DeFi.

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Currently, there are many projects that have already begun to explore the potential of the combination of NFTs and DeFi that investors can experience today. The combination of NFTs and DeFi truly brings new opportunities to the crypto market and could be a key driving force for the blockchain and crypto market to reach Mass Adoption.

Published on January 07, 2023

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