Defi x NFT Summer
The summer of 2020 saw the emergence of a new trend in the blockchain and NFT space, where the decentralized finance (DeFi) sector and NFT sector began to intersect. Projects like Aavegotchi and Armor offered NFTs as collateral, insurance policies, or reward tokens within the DeFi ecosystem.
Aavegotchi, for example, is a blockchain-based game that allows players to collect and battle digital ghosts called Gotchis. Each Gotchi is represented as an NFT and can be used as collateral to borrow funds in the Aave protocol. The value of the NFT collateral is determined by a combination of the Gotchi’s rarity and attributes, making it a valuable and unique asset within the DeFi ecosystem.
Armor is another project that leverages NFTs within the DeFi ecosystem, offering insurance policies that are represented as NFTs. These policies can be traded and sold on the marketplace, providing a new form of ownership and value exchange for insurance products.
The intersection of DeFi and NFTs represents a new frontier in the blockchain space, showcasing the potential for these two sectors to work together to create innovative new products and services. It also demonstrates the versatility and flexibility of NFTs, which can be used in a wide range of contexts beyond just digital art and collectibles.