How to Gather the Flood of Wealth from NFT and DeFi?
NFT Trigger A Passionate Debate, How to Avoid Silence?
Recently, the NFT market is hot, with single works and projects setting off public discussion frequently. GoogleTrends shows that the search volume of NFT exceeded the search volume of Crypto for a while. Especially on March 11, Christie’s sold the NFT work “Everydays: The First 5000 Days” for about RMB 450 million, which became a representative of NFT “become wildly known”. NFT is undoubtedly the most significant hot topic in the crypto market, with the popularity of NFT, more and more investors are getting involved in the NFT field, trying to get a piece of the pie. Buy and sell is the standard way to play in NFT market, and some new ways like fragmentation, index, insurance, public chain, mining, is occurred.
But the NFT market is overheating. The risk of “zeroing” and circulating problem, make the NFT market at present still belongs to the rich. For general users with less fund to invest in, the threshold and risk are hard to break. In general, the current NFT products only a very few can maintain or even increase their value, most NFT products, will become the glory of the past, in just a few months or even a few weeks after being forgotten and losing their value. The entire market also seems to lack liquidity because a large number of products become silenced. Investment management has three principles, referring to any investment products should consider: risk, return, liquidity. How can NFT, which has less liquidity, take advantage of the “ celebrity effect” to move forward?
HappyBlock invited Frammentolli, the core developer of ShardingDAO, to find out how the NFT market move forward.
New NFT Play — Fragmentation, Breaking Threshold, and Releasing Liquidity
To drive the NFT market forward faster and faster, some people are already working on solving the liquidity problem of NFT products — converting NFT into ERC20 Token to make it tradable on DEX like Uniswap and others. It’s the first step, but a very rudimentary step. Because even the Crypto Kitties, which flourished to popularity in 2017 to make ethereum massively jammed for the first time, saw prices plummet as the market became less liquidity due to bear market and hard to trade. Frammentolli said that ShardingDAO had proposed an NFT fragmentation solution, which packages NFT assets in ERC721/ERC1155 and format into ERC20 Token. These tokens can be traded and swapped in DEX like fungible tokens, thus releasing liquidity in the secondary market. Simultaneously, the fragmentation of NFT assets allows the free market to determine the price of the art, reducing the risk of NFT “zeroing” in some ways.
The ShardingDAO mentioned by Frammentolli is a platform that can fragment NFT assets to release NFT liquidity, Makeing ShardingDAO into an NFT trading platform with art democracy and low circulation cost. The appearance of ShardingDAO and the promotion method can effectively reduce the threshold for users to participate in the NFT market.
In ShardingDAO, NFT belongs to the public. The value discovery, development direction, and benefit distribution decided by the people, where anyone can buy NFT shard and unlock its liquidity based on the AMM mechanism. The ShardingDAO adopts the NFT+DAO model. This model brings the NFT market to the community, enabling decentralized autonomy and providing fuel for platform operations.
Besides, the NFT iquidity will incentivize more diverse applications. For example, NFT shard holders can choose to “rent out” NFT. The revenue can be distributed proportionally to all NFT shard holders or used as collateral by locked the liquidity to borrow from DeFi protocols then obtain additional funds to purchase new NFT assets for other portfolios.
The NFT and DeFi fields are two of the best topics in the blockchain for the last year. The development of DeFi comes from the beneficial effect of liquidity mining, especially the platform coins from various lending, DEX, and other platforms. The supply increasing of platform coins makes it difficult to maintain the price. The recent market performance continues to proof this fact. NFT combined with DeFi is an incredible innovation that combines two of the latest exciting things in the ethereum ecosystem to further unlock NFT assets’ liquidity.
As to liquidity mining, AMM automatically swaps through the constant product formula, ensuring the transaction is completed immediately and with sufficient liquidity. ShardingDAO brings the liquidity mining into NFT assets so that each shard can be traded and mined in the secondary market. It can also be staked in the mining pool to earn liquidity revenue, maximizing NFT assets’ liquidity.
Users with fewer funds can use NFT fragmentation platforms like ShardingDAO to invest and reduce investment risk and participation threshold. In ShardingDAO, users holding shards can trade on secondary market or stake in the platform for liquidity profit. We can say that ShardingDAO uses digital technology to build a democratic platform for the art of public governance and organization, where anyone can benefit from the value growth of NFT.
ShardingDAO combines NFT fragmentation with AMM and DAO. Users receive SHD (native token) in liquidity mining as a credit of participation in community governance. The expansion and growth of this vast system of ShardingDAO will be decided by SHD holders, such as through voting to determine contract parameters, product iteration, and incentive parameters. The platform is also an open ecosystem that supports integration with other DeFi protocols to form a positive circulation with the DeFi ecosystem. Meanwhile, NFT shards can be traded in the marketplace as well as mining, and holders of NFT shards will profit from the value growth of NFT assets.
ShardingDAO has processed to the second phase of mining on March 30 and started on April 13. Users can participate in the pre-mining to earn more revenue. On April 2, ShardingDAO launched the cross-chain transfer function, allowing users to make cross-chain transactions on both ethereum and binance smart chain. Finally, we would like to remind users that ShardingDAO has airdrop the SHD token, users can collect it before July 15. Moreover, ShardingDAO’s exploration and innovation of the NFT market will continue. You can keep up with the developments and news of ShardingDAO on official channels such as Twitter, Telegram, Discord, Forum, and WeChat.
ShardingDAO is an NFT decomposition synthesis protocol based on Ethereum and Binance Smart Chain.Users can securitize and fragment their NFT into ERC20 Tokens. And then, the shards will flow to the market for trade and mining.
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