When you consider how much transpired in such a short period of time, the progress is even more impressive.
Decentralized Finance with NFT
Despite the hype, NFTs are primarily used for collectibles, gaming, and digital artwork.
While the market waits for the next big thing in this domain, enabling NFT to reflect fractionalized real-world asset ownership could be the next big thing. Not only for the expansion of the whole NFT business but also the DeFi world.
Anyone with a secure wallet will be able to trade shares of exotic private-sale tokens or fractionalized NFT for private investment. Of course, this development could be disruptive, but all of this is achievable because of a single protocol.
What are Fractionalized NFTs?
Fractionalized NFTs (F-NFTs) is a new decentralized initiative that will allow NFT owners to create tokenized partial ownership of their things, allowing them to purchase and trade pieces of the entire NFT more quickly.
Furthermore, fractionalizing allows NFT holders to get liquidity from their assets without exchanging the entire token.
The Advantages of F-NFTs
What are the advantages of F-NFTs for asset owners? Let’s find out.
Users will be able to fractionalize whole collections of NFTs and deliver them under a single distributed ownership token, allowing those with limited knowledge of the field to invest in digital art amassed by more well-known collectors.
Compatibility with Vaults
The Fractional project uses NFT vaults, which control the entire article and allow the holder to divide it into sections as needed. The fungible ERC-20 tokens can be transferred to friends, sold, or used as a liquidity reserve.
When an excited party arises, they can transfer an amount of ETH equal to or more than the stock price of the asset being sold. Following the auction, the winner will receive the NFT, and token holders will request reimbursement for the ETH paid.
Decentralized Autonomous Organization Finance (DAOfi)
Another project, DAOfi, has developed a decentralized exchange for fractionalized NFTs derived from Uniswap. It was created to address the liquidity problem in the secondary market for NFTs. NFT owners using DAOfi must wait for someone to buy or bid at an asking price for a certain item.
Buyers can own a piece by converting non-fungible ERC-721 tokens to fungible ERC-20 tokens, similar to owning a reproduction of an artwork. On DAOfi, the fungible tokens will be placed on a bonding curve, allowing algorithmic liquidity to be offered to customers and merchants at any time.
The Future of F-NFTs on Horizon Protocol
Horizon Protocol is looking into the possibility of fractionalizing NFTs by having someone lock the original NFT or by constructing a synthetic replica of the NFT that is fractionalized and backed by our debt pool.
Horizon Protocol can provide liquidity and a better price gauge for NFTs that are instead sold and bought rarely and in wholes, such as paintings sold once every few years at a subjective price. Paintings sold once every few years at a subjective price can be fractionalized, and parts of the painting can be traded, just like any other asset. This boosts liquidity and gives the original NFT’s owner/s a more active and contemporaneous price.
Horizon Protocol is also looking into adding new DeFi layers to NFTs, such as staking, lending, and shorting.
Horizon Protocol’s system provides a secure and safe environment for synthetic assets that mimic the real-world economy. The infrastructure enables the trading of a variety of novel asset classes. In addition, horizon Protocol’s synthetic asset frameworks (crypto and real-world economy) have been expanded to include fractionalized NFTs, giving users and NFT owners a novel way to uncover liquidity and more accurate valuations.
NFTmania to Decrease? Volumes of NFT Trades have Begun to Decrease
Although the volumes of NFT trading achieved tremendous heights in August, they decreased dramatically in September.
Investors appear to have drastically lessened their demand for non-fungible tokens, reaching all-time highs in August. Indeed, the NFT-based trade volumes at Ethereum did not exceed $100 million in the last three days, while in August, they exceeded $500 million for one day.
The Volumes of NFT Trade to the South
According to Alex Thorn, head of firmwide research at Galaxy Digital, a recent study has shown that daily volumes of non-food tokens have been falling steadily every day since the start of September.
For example, the NFT marketplace was about 300 million dollars on September 1 and 2; however, the marketplace was less than 100 million dollars after September 10. On the contrary, the trade volumes recorded successive all-time highs, exceeding $500 million daily on 29 August.
Talking of the amazing peak last month, OpenSea – a significant peer-to-peer marketplace that is not fungible – was an enormous milestone as its trading volume reached the 1 billion dollar mark.
Previously, the platform had a total transaction volume of about $100 million in 48 hours. Moreover, this figure was four times higher than that registered by the Open Sea during 2020.
However, the NFT industry has increased its popularity this year despite the fall in trading volume in September. Athletes, singers, entertainers, musicians, and other notable people who started their different digital arts became highly attractive.
Who Was Part of the NFT Craze
Some are particularly concerned with the mania that is not fungible among these renowned persons. For example, the famous quarterback Tom Brady is like this.
In April, the 43-year old, probably America’s most successful football player, said that his own NFT platform, Autograph, would be released. By doing that, Brady planned to bring together important names from diverse industries, such as sports, fashion, pop culture, and entertainment. They might produce individual digital pieces of art.
Since Naomi Osaka, Tiger Woods, and Tony Hawk joined the platform, his plan appears to have been tremendously successful.
Eminem, a hip-hop giant, also stepped onto the NFT bandwagon. After working with the digital art auction platform, Nifty Gateway, the 15-time Grammy winner, unveiled a collection of his own, dubbed Shady Con.
One of the latest examples of this is the American comic book powerhouse Marvel Entertainment. Firstly, in early August, the organization joined together to release Spider-Man NFTs with the blockchain digital collectibles market – VeVe. Shortly thereafter, new digital collections, including Captain America, Barnes’ Bocky, and Red Skull, were added to expand their not-fungible token universe.
China’s Official Media Slams the NFT Craze
Securities Times, a sister publication of the People’s Daily, issued an editorial piece criticizing non-fungible tokens as the hype and arguing that digital assets should serve the real economy by tokenizing actual assets.
The essay also stated that NFTs should benefit the real economy by tokenizing real-world assets such as real estate and automobiles.
Meanwhile, Chinese tech behemoths are capitalizing on the NFT market’s strong success. Last week, Alibaba’s online mall launched an NFT moon cake — a dessert to commemorate the Chinese traditional celebration Mid-Autumn Festival — and it sold out in one day. In addition, Alipay sold two batches of NFT artworks in June and August, totaling 160,000 pieces on the day of issue. Tencent’s NFT platform “Huanhe” was also introduced in August.
Despite this, Chinese technological behemoths have been the subject of antitrust investigations for nearly a year. Alibaba was fined 18.2 billion yuan (US$2.812 billion) in April after being accused of monopoly. In July, the Market Supervision and Administration agency issued 22 antitrust fines to technology companies, including Alibaba, Tencent, and Meituan. The Central Commission for Discipline Inspection, China’s anti-corruption watchdog, published an article on its website on Saturday headlined “Set Traffic Lights for Capital Expansion,” demonstrating the government’s antitrust determination.
Fees for Ethereum have Risen Dramatically
Yesterday, Ethereum’s average network fees increased by 300 percent, owing to the market’s fall and a hyped project’s minting event.
Fees on the Ethereum network have risen yet more. This time, it appears to have been triggered by two different factors: the market’s fall and the impending release of a new NFT collection.
Since May, Ethereum fees have been at an all-time high
The costs on Ethereum’s network have soared yet again, with a 300 percent spike in a single day. According to YCharts, they were at their highest position since late May yesterday.
On September 7th, the average costs for Ethereum were $21.29.
The entire community took notice, with many claiming that there are cheaper choices available from competing businesses.
What Caused the ETH Fees to Increase?
Two factors could be at the root of the exorbitant ETH expenses. The marketwide collapse that we saw yesterday seems to be the most obvious explanation right off the bat.
Over $2.5 billion in long and short positions were wiped out in just a few hours. This occurred as Bitcoin fell below $43,000 and Ethereum fell below $3,000.
Such events trigger panic sellers. People are flocking to exchanges, especially decentralized ones like Uniswap, to liquidate their holdings and avoid more losses. As a result, the number of requests for transactions rises, pushing up the ETH fees. It occurs whenever there is a sudden movement in any direction.
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