The year 2021 saw explosive growth of a new crypto asset that has been in the making for years. It all started with a $6.6 million bid for a 10-second video clip by an artist, Beeple.
And what did the buyer get in exchange for those millions? A non-fungible token was attesting to the ownership of the video.
That’s what NFTs are all about, and they have always existed in the form of collectibles like art, music, or games. With blockchain, it is now possible to tokenize digital assets by creating a signature of ownership.
The recent surge in the popularity of NFTs can be attributed to the overall hype surrounding the future of metaverse and blockchain gaming. Speaking of which, Axie Infinity has emerged as one of the most popular games in the NFT domain. With 1.5 million daily active users, it has witnessed a dramatic growth in its player base.
The play-to-earn model is a gateway for new users to purchase digital assets and earn rewards by winning battles. The community-owned NFT marketplace does not only bring attention to the utility of NFTs but also accelerates the utilization rate of the game. Axie Infinity is a trendsetter in space and may continue to garner worldwide attention.
The use cases of NFTs extend beyond the world of digital art, as they can also be utilized to earn passive income through a Proof-of-stake mechanism. Similar to yield farming in DeFi, NFTs can be locked up to receive rewards without losing ownership.
However, high volatility and illiquidity in the NFT market have kept investors on the sideline. An upcoming decentralized protocol, Gnox, is looking to solve this problem by investing on behalf of the community so that users don’t run the risk of losing money. The primary objective of the platform is to allocate a majority of treasury funds into liquidity pools and versatile NFTs. This, in turn, will come back as a reward for GNOX token holders.
It’s an innovative concept to attract attention to an asset that is not popularly known for generating passive rewards. Gnox also has future plans to introduce NFT staking, which users can leverage to earn rewards in stable coins.
With many more developments in the pipeline, it’s worth noting what this project aims to achieve in the NFT space.
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