NFTs Take on DeFi: Crypto Market Report Sep 2020

By Interdax | interdax | 14 Oct 2020


 

NFTs gain attention and traction as the DeFi hype takes a breather in September.

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NFTs Round Up

  • Interest in Non-Fungible Tokens (NFTs) gained ground in September as a crossover between yield farming and NFTs emerged. NFTs were initially made popular by virtual games such as CryptoKitties which tokenised digital pets and can be used to represent art, in-game assets, collectibles and much more. Following on from the introduction of governance tokens in the DeFi space, NFT projects have started to issue governance tokens as well which has revived the hype surrounding NFTs. In total, there have been more than $9 million in NFT sales, with more than 74,000 NFTs sold in the past month or so.
  • For instance, Rarible launched its own token, airdropping it anyone who transacted NFTs. The RARI token is to be used as a governance token to turn the NFT marketplace into a Decentralised Autonomous Organisation (DAO). As a result of the airdrop, the monthly volume of sales on Rarible increased to $5.4 million in September, up from approximately $538,000 in August. Other marketplaces may also release their own governance tokens as well in response.
  • Other crossovers between yield farming and NFTs have emerged, such as Aavegotchi (GHST token), or Shroom.finance (SHROOM) which will focus on farming in-game assets. Aavegotchis are similar to CryptoKitties, where NFTs represent rare collectibles on the Ethereum blockchain. On top of being digital collectibles, they can also be used as collateral in DeFi, where each Aavegotchi comes with an a-token that can be staked in Aave’s lending pool. Shroom.finance is a DeFi protocol and DAO that focuses on in-game assets, building a platform to launch, mint and trade in-game assets. By repurposing yield farming into a system for supporting in-game assets minting and launching of promising video game titles, Shroom.finance hopes to become the first ever decentralised game publisher.
  • DeFi tokens retreated from all-time highs, with the most popular tokens falling over the course of September. An exception to this trend is MEME, an experimental protocol combining Non Fungible Tokens (NFTs) and yield farming, where its token value grew from around $150 to $540 over September.
  • There are many more possibilities for NFTs ranging from real estate, to music, event tickets and more. Art and collectibles are natural use cases and the NFT sector could see more mainstream attention if there’s an exciting application that onboards more artists, developers, gamers and/or collectors.

DeFi Overview

The Total Value Locked (TVL) in DeFi applications reached an all-time high of 4.36 million ETH on September 16. Over the month, TVL grew more than 64% in ETH terms and over 17% in USD terms.

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DeFi tokens are down on the month, but some assets are making a comeback with MKR, REN and SNX rising from lows posted in September. 

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The launch of the Uniswap token (UNI) was arguably the most impactful event in September for DeFi. The token has become the 35th largest crypto-asset by market cap and has seen Uniswap rise to first place in terms of TVL in the protocol:

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Read our crypto market report for September for more insights on DeFi, Bitcoin and Ethereum: https://docsend.com/view/pbry8aqzeru78q3p

 

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