NFT Financialization Overview

NFT Financialization Overview

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  NFT Financialization TechIPm, LLC
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  NFT Finalcialization NFT Finalcialization NFTfinancialization refers to bringing NFTs closer to financial use, mostly, by making NFT useful in DeFi protocols. NFT financialization is the most important element of NFT monetization innovation to overcome the low liquidity and high price volatility of almost all NFTs currently. NFT Fractionalization splits a NFT into smaller fungible tokens that represent partial ownership of the NFT. The NFT is locked in a smart contract and the ownership remains with the original holder. Fractionalization can unlock liquidity for NFT owners and cheapens access to valuable NFTs, and improves the NFT market spectrum. An issue with fractionalization is a reconstitution after ractionalization. Buyout auctions alleviate the reconstitution problem to some extent. *NFT fractionalization protocols: NFTX (https://nftx.io/), Fractional (https://fractional.art/), NFT20 (https://nft20.io/), Unic.ly (https://www.unic.ly/), Szns (https://www.szns.io/) NFT Lending uses NFT as collateral for loans. In peer-to-peer lending, borrowers and lenders manually negotiate and come to an agreement for loan terms such as duration, interest rates and loan-to-value ratios in a peer-to-peer fashion. This lending enables a customizable loan terms without a need to rely on price oracles. Because the matching process is manual time-to-liquidity may be slow. In peer-to-pool lending, liquidity providers fungible tokens into pools and borrowers take up loans from these pools instantaneously. Borrowers should put up their NFTs as collateral by locking them in smart contracts (digital vaults). This lending, however, must rely on price oracles to automate loan terms. *Peer-to-peer NFT lending protocols: NFTfi(https://www.nftfi.com/), Arcad (https://www.arcade.xyz/), MetaStreet (https://metastreet.xyz/) *Peer-to-pool NFT lending protocols: Bridgesplit (https://www.bridgesplit.com/), BendDAO (https://www.benddao.xyz/en/, PINE (https://pine.loans/), JPEG’d (https://jpegd.io/) NFT Rental market is where NFT owners can rent out their NFTs to receive income and renters can rent NFTs to use but without owning them. In collateral renting, renter has to put up collateral to rent the NFT to use (e.g., reNFT (https://www.renft.io/). Collateral-free renting separates ownership and utility of an NFT (e.g., IQ Protocol (https://iq.space/#top). TechIPm, LLC NFT Price Discovery uses AMMs (Automated Market Makers)/bonding curves for an automatic price discovery in DeFi exchange liquidity pools (e.g., Uniswap and Sushiswap). *NFT Price Discovery protocols: Sudoswap (https://sudoswap.xyz/#/), Pilgrim (https://pilgrim.money/), Rootswap (https://rootswap.xyz/)
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  NFT Financialization EcosystemComparison NFT Financialization Ecosystem Comparison Nichanan Kesonpat: https://medium.com/1kxnetwork/show-me-the-liquidity-evaluating-nft-financialization-methods-f3c30bf8f08c GBN: https://www.gbv.capital/insights/sx1yoj9yut3i4o41siczbid7hf3y3q TechIPm, LLC Messari: https://twitter.com/messaricrypto/status/1463188515919998984 Fundamental Labs: https://fundamentallabs.substack.com/p/financialized-nfts-evolving-opportunities Matrixport: https://matrixport.medium.com/nft-financialization-trends-and-opportunities-35a98076ff1
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  NFT Monetization TechIPm, LLC
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  NFT Monetization NFT Monetization Sales ANFT, which represents a physical/digital asset (ownership certification), can be monetized through the primary sales and secondary sales on marketplace. Popular NFT marketplaces include OpenSea Binance Lucky Block Nifty Gateway Foundation and Rarible marketplaces include OpenSea, Binance, Lucky Block, Nifty Gateway, Foundation and Rarible. *NFT sales do not mean the ownership transfer of the underlying physical/digital asset automatically. For the ownership transfer, an in-built smart contracts for the NFT may specify the ownership transfer but this is currently the exception and not the rule Usually NFT ownership means you have the token can display the token and can may specify the ownership transfer– but this is currently the exception and not the rule. Usually, NFT ownership means you have the token, can display the token and can authenticate your token ownership. Licensing Licensing A NFT, which represents the intellectual property (IP) rights of a physical/digital asset, can be monetized through the licensing for royalty incomes. *References for NFT licensing processes and legal issues: References for NFT licensing processes and legal issues: A Survey of NFT Licenses: Facts & Fictions (https://www.galaxy.com/research/insights/a-survey-of-nft-licenses-facts-and-fictions/) Copyright Vulnerabilities in NFTs (https://medium.com/initc3org/copyright-vulnerabilities-in-nfts-317e02d8ae26) Financing NFT IPs can be pooled to use as asset-backed securities for securitization financing from institutional investors. NFTs also can be pooled to use as collaterals for DeFi money markets (NFT+DeFi = NFTFi) money markets (NFT+DeFi NFTFi). *References for NFT financing: Can I interest you in NFT² Sir? (https://volquant.medium.com/can-i-interest-you-in-nft%C2%B2-sir-3c9c1b4caf19) TechIPm, LLC Can I interest you in NFT Sir? (https://volquant.medium.com/can i interest you in nft%C2%B2 sir 3c9c1b4caf19) A detailed analysis of NFT financialization: how to unleash the greater potential of NFT? (https://coinyuppie.com/a-detailed-analysis-of-nft-financialization-how-to-unleash- the-greater-potential-of-nft/)
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  NFT Valuation NFT Valuation FloorPrice The NFT floor price is the lowest listed selling price for a NFT within an NFT collection on NFT marketplaces. Market Approach For a digital collectible/artwork NFT, a value can be evaluated based on recent comparable (similar asset characteristics) transaction price on NFT marketplaces. *A good valuation reference for artwork NFTs: NFT Valuation Guide (https://www.clearrating.com/resources/nft-valuation-guide) Income Approach A value can be evaluated based on regular cash flow generation potential through IP licensing and other income generating activities. A good example is the music licensing royalties. Prediction A value can be evaluated based on available historical market price data to predict current and future NFT values. Experts’ View A value can be evaluated based on (a cloud sourcing) experts' evaluation by incentivizing honest answers. *Upshot (https://upshot.xyz/) provides the NFT price predictions based on available historical market price data using machine learning models. Upshot also provides the TechIPm, LLC NFT appraisals by asking its decentralized user base to compare collectibles.
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  NFT Value Development p Scarcity ANFT issuer can develop the scarcity by designing NFT with some rare features/characteristics and controlling NFT supply and demand. NFTs that are issued by well- known brands/celebrities/community supports/fandoms/reputations/popularities also can add the scarcity. *NFT scarcity evaluation solution: Rarity.Tools (https://rarity.tools/)) and Rarity Sniffer (https://raritysniffer.com/) provide a ranking of the scarcity of individual collectible NFTs and how rare any NFT is within their collection. Utility An utility NFT enables an underlying application that provides some economic utilities through a real-world use case. NFT utilities include providing direct economic values to NFT holders (e.g., monetary return/rewards/redeemabilities/incentives/benefits) and/or functionalities (e.g., VIP membership/access pass/passport to exclusive experiences/events/communities/products/real estates) and/or diverse applicabilities (e.g., applications in metaverse/gaming/fashion/retail/sport/finance/music ...) and/or sustainabilities (e.g., life cycle management of a product) and/or technical features (e.g., dynamic/consumable/composable NFT; interoperability). *A good reference for the utility NFT: Here are the top NFTs with Utility (https://supplain.io/news/top-nfts-with-utility) Sustainable Tokenomics A good token economic system design enables a better NFT liquidity, and thus, an economically sustainable NFT ecosystem , which significantly affects the long-term economic value of NFT holders. TechIPm, LLC *High liquidity provides an ability/opportunity to realize the expected/market value from a sale in a reasonable time frame.
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  NFT based NFT MonetizationPlatform Architecture Architecture TechIPm, LLC
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  Metaverse Fashion NFTMonetization Platform Architecture Metaverse Fashion NFT Monetization Platform Architecture TechIPm, LLC
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  NFT based IPMonetization Platform Architecture NFT based IP Monetization Platform Architecture Auditing Audit IP for finding and analyzing legal status, individual IP’s Audit potential buyer’s or licensee’s KYC, financial credential, fli t f i t t d l l t t Auditing Layer cash flow generation history, potential financial and legal risks, licensing diversification and strength of market position conflict of interest and legal status Mi t NFT f ti IP i ht ( t t i ht Embed DID (Decentralized Identifiers) based SSI (Self-Sovereign Identity) NFT Minting Layer Mint NFTs for representing IP rights (patents, copyrights, trademarks) on a blockchain with storing the original IP data in a centralized or decentralized storage Embed DID (Decentralized Identifiers) based SSI (Self Sovereign Identity) for a verifiable NFT authenticity that can be used for a NFT creator to verify the authenticity of minted NFT by creating a verifiable credential (carried with NFT) that proves NFT creator's identity Form a securitization pool of IP NFTs considering Comply lighter-weight security regulations such as Securitization Layer p g IP type, portfolio, use cases and monetization potentials; Provide group index and mint NFT-ST for representing the securitization pool Securitization Layer Comply lighter weight security regulations such as Regulations D, S, or A+ and/or Crowdfunding and/or Regulation A for offering does not exceed $20 million in a 12-month period Valuation Layer Value based on experts’ view with consultation of (British/Dutch/ Vickrey/SMR/Radical) auction; Value based on IP valuation (income/market/asset) methods Value based on automatic DeFi price discovery mechanism: Automated Market Makers (AMMs) using NFT-backed fungible tokens and arbitrage process Monetization Layer Monetize through sales of NFT-ST security tokens; Monetize through primary/secondary marketplace: in-built smart contract for the NFT should specify any sales/licensing Monetize through IP NFT monetization DAO: To encourage active engagement in the monetization DAO, a utility based NFT, where the token acts as a TechIPm, LLC Layer co t act o t e s ou d spec y a y sa es/ ce s g agreement in a legally appropriate way DAO, a utility based NFT, where the token acts as a digital passport of the DAO membership is used
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  TechIPm, LLC