It would not be wrong to say that the year 2020 belongs to the decentralized finance (DeFi) industry as it has witnessed significant growth throughout this year. At the beginning of this year, the DeFi space was not so much popular but now it has achieved a great deal of popularity.
With its success and growth all across the cryptocurrency community, DeFi has made Non-Fungible Tokens (NFTs) one of the biggest buzz words of the present year. If we go six months back, we will see that there was only $1 billion worth of digital tokens locked all across the different protocols of the decentralized finance market. And now, this figure stands above $14 billion. This is a massive growth on the part of the decentralized finance industry.
Non-Fungible tokens’ sales also mirrored this explosive growth of the decentralized finance protocol. Reportedly, the sales of NFT tokens spiked above the figure of $1 million in the beginning week of the month of September. Just a month later after this, these NFT sales got doubled and reached the $2 million mark. The reason behind this spike in sales is that the decentralized finance industry made it possible for individuals and entities to get access and afford NFT tokens easily using fractionalized ownership. In this way, it enhanced the size of the market and liquidity of NFTs.
NFTs are usually referred to as assets that do not lose their value neither they can be divided. domain names, digital art, CryptoKitties, etc., or anything else that can signify the ownership rights is regarded as NFT. Due to the specific nature of their markets, it usually becomes very hard to purchase or sell these kinds of assets. However, DeFi has somewhat transformed the case scenario and has added liquidity to NFTs in order to facilitate their purchases and sales.
What’s more, NFTs might be helpful for content creators as well who can utilize them for maintaining their livelihoods. While talking about NFTs and DeFi, the Vice President of operations at OpenLaw said:
“When you start talking about how content creators are paid, that’s where DeFi comes in; and when you start talking about the property of creators, that’s all NFTs.”
The current year is, no doubt, the year of the decentralized finance industry. But there is likely a chance that the next year might belong to Non-Fungible tokens.