Ethereum developers are starting to merge DeFi with NFTs, combining two of crypto’s biggest buzzwords – and it just lost someone a $340,000 NFT.
DeFi stands for decentralized finance and refers to any financial tool established on a decentralized platform, whereas NFTs are image-based tokens (and can have exorbitant values).
Traders have begun pledging NFTs as collateral when borrowing money through DeFi lending services in this scenario. The concept is that you could, for example, put up a 10 ETH NFT and then borrow 5 ETH as a loan. But, of course, you will forfeit the NFT if you do not repay the loan on time.
That’s precisely what happened in this case.
Taking out a loan by putting up an NFT
On the NFTfi platform, an NFT collector borrowed 3.5 ETH (now worth $12,600) about three months ago. They used an “Elevated Deconstructions” NFT from the Art Blocks Curated collection, selling for around 11 ETH ($39,600) at the time, making the loan. Although the most recent sale price for the NFT was 3.25 ETH ($11,700), it was less than the loan’s worth.
The value of these NFTs increased dramatically over that period. This was sparked in part by endorsements from Punk 6529 (the owner of that CryptoPunk’s Twitter account) and Cozomo de’ Medici, a pseudonymous art collector. As a result, they were quickly selling for 85 to 200 ETH ($306,000 to $720,000).
The three-month loan for 3.5 ETH came to an end yesterday, and the borrower had failed to repay the amount throughout that time. As a result, the lender received the collateral, which cost them 3.5 ETH but gave them the Elevated Deconstructions NFT.
The current floor price is 95 ETH ($342,000), which is the cheapest accessible NFT in this collection. In principle, this gives the lender a $329,000 deposit. However, despite the high floor price, the lender may not sell the NFT for this much.
In reality, it’s been 18 days since an Elevated Deconstructions NFT was sold. As a result, the borrower may have chosen to forego the loan to obtain immediate liquidity. This is implausible, though, because they could have considerably reduced the NFT price and still sold for more than 3.5 ETH.
Not for the first time
The fact that this NFT has been used as collateral twice in its lifespan — and both times the borrower has defaulted — adds an exciting twist to the story.
ACCORDING TO HISTORICAL DATA, this NFT was part of a loan that was defaulted on in April over a 3 ETH ($10,800) debt, which is how the previous owner gained it before giving it up over the weekend.
The former owner was involved in a few additional NFT-backed loans as well. They received their first liquidation in April after a 3 ETH loan was not repaid, and they received an Arago NFT. In May, they received 1 ETH (plus interest) back on loan guaranteed by a Decentraland parcel of property they had given out.
However, they haven’t been very active since the deal ended at the end of June. The wallet’s most recent transaction, according to blockchain statistics, was 58 days ago.
NHL Opens Hockey Collectibles NFT Marketplace
The NHL, along with its Alumni Association and Players’ Association, said on Thursday that it has joined with NFT platform Sweet to build a distinctive NFT marketplace and libraries of NFTs—individual blockchain tokens that denote ownership.
The NHL’s market will fall between a full-fledged NFT trading platform and a website that enables momentary NFT drops, according to David Lehanski, the league’s executive vice president of business development and innovation.
By creating an NFT marketplace with exclusive releases, the NHL hopes to give fans a little bit of both. In preparation for the commencement of the 2022–2023 season, the NHL’s Sweet marketplace is anticipated to launch in October.
The NHL aims to gamify NFTs with “questing and collecting” components so that fans will interact and can be rewarded with benefits like other NFTs, according to Lehanski, who spoke to Decrypt.
Depending on a player’s performance, some of the NFTs will also be dynamic and alter over time. According to a statement, NFTs will also include “cinematic game highlights from past and present NHL seasons” or surprise packs of NFTs that may be seen in “3D interactive trophy rooms.”
Lehanski claimed that the NHL wasn’t yet ready to reveal which blockchain it would be constructing on. Though it might be on Polygon or Tezos if Sweet’s offerings are any indicator.
Lehanski stated, “We’re looking at everything,” and that the NHL’s top priorities in its search for a blockchain include “cheap gas expenses” and “environmental sustainability.”
The NHL is one of the most recent major professional sports leagues to enter the NFT market, following the NBA’s Top Shot NFTs, the NFL’s “play and own” NFT game, and MLB’s impending NFT contest.
Lehanski commented on the NHL’s approach to NFTs, saying, “There was clearly a lot of temptation to potentially moving very rapidly […] but we thought that was a little shortsighted.” He added that, in his opinion, spending the time to investigate indicators like fan behavior was worthwhile. Especially in relation to digital collectibles and gaming, NFTs have a long-term future as relevant and meaningful items for enthusiasts.
But according to Sweet CEO Tom Mizzone, the NHL’s NFTs won’t simply be targeted at hockey fans who are unfamiliar with cryptocurrencies; seasoned NFT collectors will also be able to participate in a way that feels natural to them.
It will undoubtedly appeal to that degen culture, he continued, but not to the extent that it excludes fancier consumer bases.
The CryptoPunk Sale raises $100,000 in Ethereum to support the war effort in Ukraine
Before the recent crash, the NFT was worth about three times that when it was donated in March.
The Ukrainian government stated today that their Aid for Ukraine crypto fundraising campaign sold a donated Cryptopunk NFT and raised over $100,000 to support the country’s anti-Russian war efforts.
In March, Cryptopunk #5364 was donated to a Ukrainian crypto fund. The fund sold the NFT to an unidentified buyer for 90 ETH yesterday. NFTs are digital or physical assets that are represented by blockchain-based tokens.
In a tweet today, Alex Bornyakov, Ukraine’s Deputy Minister of Digital Transformation—the office in charge of supervising the country’s crypto fundraising throughout the war—announced the sale.
In late February, just after Russian troops entered the country, Ukraine began receiving crypto and NFT donations. Since then, the country is said to have raised more than $135 million in cryptocurrencies through cryptocurrency donations and the selling of given NFTs.
A crypto organization collected $6.75 million for Ukraine’s military effort in early March by selling a single NFT of the Ukrainian flag. The Ukrainian rap group Kalush Orchestra, this year’s Eurovision champions, auctioned off their trophy to generate nearly $1 million in ETH for the foundation a few weeks ago.
The cryptocurrency fund assists Ukraine’s military in purchasing non-lethal goods such as protective vests and medical kits. The Ukrainian government does not hold or spend the funds; it just approves and monitors the initiative. The fund’s treasury is run by the Ukrainian crypto exchange Kuna, which is used to assist support volunteer purchases.
Ukraine’s use of cryptocurrency throughout the crisis has acted as a case study for the potential benefits of crypto in geopolitical conflicts where fiat currency (such as US dollars) is difficult to move fast.
It’s also brought up some possible downsides. Although U.S. Treasury Secretary Janet Yellen claims the practice hasn’t been widely seen, the International Monetary Fund warned in April that Russia could circumvent economic sanctions by mining cryptocurrency.
Furthermore, the present crypto bear market has completely exposed crypto and NFT donations. The price of Ethereum has dropped about 70% in the previous ten weeks, severely limiting the fundraising possibilities of NFT collections based on Ethereum, such as Cryptopunks.
The Cryptopunk that was sold yesterday raised just over $100,000 for Ukraine’s war effort; the same amount of ETH would have been worth almost $267,000 on the day the NFT was given in March.
Jay-Legendary Z’s Sneakers Are Worth More Than 1 BTC As an NFT, go to auction
Relevant Customs, a well-known shoe brand in celebrity circles, has launched an auction for a “artist-proven” pair of the iconic Brooklyn Zoo sneakers. On the ClubRare platform, the auction will take place on June 21.
Only ten pairs of Brooklyn Zoo sneakers were ever made, and thanks to Jay-Z, one pair went viral, selling for more than $24,000, which is now more than the value of a single Bitcoin. Now, the artist has shown the sneaker’s initial prototype, the same pattern that was used to make the other ten shoes. On June 21, the “Brooklyn Zoo” Jordans will be auctioned off as an NFT-supported, Metaverse-compatible item. This is the only pair of Brooklyn Zoo sneakers with web3 functionality.
Despite the fact that the cryptocurrency market is currently experiencing a major downturn, NFT assets are the first to be sold by investors, losing the greatest value. As the preceding news shows, NFT aficionados and entrepreneurs are unconcerned about the current state of affairs. On the contrary, based on their activities, they appear to want to give NFT collectibles greater weight and establish them as a whole entity. As a result, Paul Chung, the CEO of ClubRare, planned a Brooklyn Zoo Jordans auction conference on the future of e-commerce on blockchain.
This is an extremely crucial question. NFT assets are no longer associated with anything other than conjecture and pricey photos, thanks to their original high buzz. But it’s crucial to emphasize that, first and foremost, it’s a fantastic tool for registering ownership and e-commerce, and that every digital area of products and services turnover can benefit from these features.
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