👷🏻 NFT Rally Paves Way for Fractionalization and Derivatives
Hello Defiers! Here’s what we are covering today,
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Balancer, one of the leading DeFi automated market makers (AMM) for multiple tokens. Dive into their pools at
Kraken, consistently rated the best and most secure cryptocurrency exchange, which can get you from fiat to DeFi
Aave, an open-source and non-custodial liquidity protocol where users can earn interest on deposits and borrow assets.
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NFT Financial Engineering
NEWS NFTs are a simple idea, but not for long. We’ve already seen how they’re being tapped as collateral for loans. Now more complex instruments are coming, thanks in part to projects breaking NFTs into pieces in a process called fractionalization.
FUTURES That’s not all — some financial engineers are reportedly fashioning futures contracts derived from NFTs. “In just the last few weeks we’ve had like three or four derivatives projects reach out about using our price feeds,” Alex Gausman, founder of NFTX, a platform for fractionalizing non-fungible tokens (NFTs) told The Defiant.
BYPRODUCTS The advent of NFT futures is just one of the byproducts of the explosion in NFTs this year. Fractional ownership of NFTs is also rapidly changing the way investors are buying and selling these new instruments. NFTX, for instance, is making fractional ownership of pricey NFTs easier, and that opens up possibilities for financializing these crypto collectibles.
TLDR NFTs have pulled in huge money and a notable financial incumbent fan in the past couple days. Investor appetite for NFT art and collectibles shows no signs of abating. Sales volumes on OpenSea, the largest NFT marketplace, topped $100M for three consecutive days, a new record for the platform.
FOMO And it was another record weekend for Art Blocks, the platform for creating and minting generative NFT art on the Ethereum blockchain. On Friday, August 20 alone, Art Blocks saw 14,559 ETH, or $48M, in sales.
WALLETS According to this Dune dashboard, more than 14K wallets now hold Art Blocks NFTs, up 55% in August from roughly 9K on July 31.
"NEAR Protocol is hosting the METABUIDL Hackathon! $1 Million Dollars in prizes and funding will be awarded to top projects in DeFi, Gaming, NFTs, and more. Build with community members, participate in workshops, and hack with NEAR from Aug 27-Sept 12."
In this opinion piece, Hasan Furkan Gök makes a great case for why that staple of TradFi, the fixed-income interest rate, has a valuable role to play in the evolution of DeFi. The upshot: By mitigating risk, such rates can draw more liquidity to the space, and a handful of platforms are already taking the plunge…
MAGIC Have you watched Howl’s Moving Castle from Hayao Miyazaki? If you haven’t, please go check it out, it’s an amazing movie. As the name suggests, a magical castle roams across the landscape on a pair of spindly legs.
PROTOCOLS I find quite a parallel between this wonderful contraption and DeFi. The castle, devoid of symmetry and striking with its eye-catching distorted shape, is a hodge-podge of unrelated parts just like the protocols in the DeFi ecosystem. And the castle moves thanks to the fire demon Calcifer residing in its hearth. That’s not too different from the way the spirit of innovation and creativity motors the DeFi space.
EXPERIMENTS Sound crazy? Well, consider how DeFi transitioned from a set of experiments conducted by tech geeks to the warzone of degen speculations. At this time, the implementation of fixed returns will be a reliable fuel in DeFi’s engines. It will stoke further adoption and let it roam the earth even more freely. And now that I’m done with metaphors, let’s dive into why we need fixed interest rates and how some of the current DeFi protocols bring it to space.
Molly Wintermute Releases Hegic V8888: 0% Trading Fees and Gas Fee-Free Options Trading
Hegic V8888 is live in mainnet:
Hegic is an on-chain peer-to-pool options trading protocol built on Ethereum. With Hegic, DeFi and crypto users can trade 24/7 American, cash-settled, on-chain ETH and WBTC call / put options with no KYC or registration required for trading.
Hegic was founded 1.5 years ago in February, 2020. Hegic V888 (the previous version) was live for 10 months. The results achieved by V888:
● $492,075,000 total volume
● $22M record daily volume
● 6,450 options traded
● 2,825 unique users
● $10,415,000 earned by HEGIC staking lots holders
Introducing Hegic V8888
Trading Options on Hegic V8888
● 0% trading fees: pay only a premium
● 100% gas fee-free options trading
● The lowest prices for ETH and WBTC call / put options
● Auto-exercising of in-the-money options
● Tokenized options for trading on the secondary market
● 90 days is the new maximum period of holding options
Earning Yield on Hegic V8888
● Zero-loss options selling pools with auto-hedging
● x2 higher capital efficiency with flexible collateralization
● Independent pools for selling call and put options
● Individual lock-ups for each liquidity tranche deposited
● Pools’ unrealized profits front-running prevention
● Real-time data on pools APY and P&L per each option sold
Use Hegic now:
Grant programs in the defi and blockchain space should take some lessons from existing real-world competitive and entrepreneurial grant programs.
What is the size of the market for NFTs? This question is a hard one to answer, since NFTs can represent so many vastly different types of assets. Ownership of bonds and real estate can be represented as NFTs, as can art, in-game items, and music. The image below is a broad taxonomy of the different types of NFTs.
Institutional investors are loading up on Solana (SOL), with one-third of inflows to crypto investment products being invested in instruments tracking Solana this past week.
🔗 NFT unicorn OpenSea sets sights on improving customer experience with $100 million war chest: The Block
OpenSea's Devin Finzer is just as surprised as anyone to see non-fungible tokens (NFTs) taking off this summer. “None of us expected to hit a billion in transaction volume this month,” said Finzer, describing what he views as "the biggest economy in the history of the internet."
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🧑💻 ✍️ Stories in this newsletter were written by Brady Dale, Owen Fernau and Juan Pellicer, and edited by Camila Russo, Bailey Reutzel and Edward Robinson. Videos were produced by Robin Schmidt and Alp Gasimov. Podcast was led by Camila, edited by Alp.
The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access, while free signups get only part of the content. Click here to pay with DAI (for $100/yr) or sub with fiat by clicking on the button above ($15/mo, $150/yr).