NFTs exploded like no other in the crypto ecosystem. Over the last year, the NFT market observed a staggering 131 times growth in sales and recorded more than $25 billion in trading volume. NFTs also opened up opportunities for innovators to create new market sectors, such as NFT marketplaces, blockchain gaming, and metaverses.
While the astronomical growth in NFTs is impressive, the NFT space still faces many fundamental problems limiting further adoption. The user experience on the majority of the current NFT platforms is fragmented. It is challenging for non-crypto natives to navigate the NFT world with complex UI structures, a lack of responsive customer service, and multi-language support.
The Bottlenecks Stopping Mass NFT Adoption
NFTs provide the best gateway to the entire crypto ecosystem. The unique cultural aspect of NFTs makes a compelling case for the masses to join this digital revolution. However, a few bottlenecks are stopping them from exploring the metaverse.
The illiquid nature of NFTs is one of the biggest reasons people are uncertain about treating NFTs as an investable asset. With the supply exceeding demand multi-fold, the liquidity is not concentrated in any NFT collection outside the top rankings.
The lack of deep liquidity creates many inefficiencies in the market. For example, when an NFT owner wants to cash out, they tend to undercut the floor price and increase the possibility of making a sale, which leads to an incorrect valuation of NFT assets.
Weak Security Infrastructure
Security has become a glaring issue in the NFT space, with hacks and exploits happening every other day, and attackers stealing millions of dollars worth of NFTs and digital assets. In recent cases, the smart contracts of NFT marketplaces contain a bug enabling hackers to steal or buy NFTs at a much lower price than market value.
In addition to smart contract exploits, NFT marketplaces are also facing information security problems in the form of plagiarism. In a recent thread by OpenSea, it was mentioned that more than 80% of the NFTs minted were fake or stolen. Though the marketplace reversed its free minting feature, the spam content is still out there, taking credit from actual artists.
Lack of Real-World Utilities
The value generated from NFTs is usually when the price appreciates or creates cash flow for the owner. But most NFTs don’t have those utility characteristics, at least in the early stages.
So it becomes impossible for owners to get liquidity and explore other investment options in the real world while still preserving their ownership. There is a significant market gap between DeFi and NFTs, limiting NFT holders from creating passive income.
Deedy: A Multi-Chain Web3 Platform Intersecting DeFi and NFTs
Deedy is a web3 platform with multi-chain capabilities that allows users to create and distribute NFTs seamlessly. It overcomes the bottlenecks mentioned above by providing users with a suite of products created using a combination of DeFi and NFTs.
The marketplace of Deedy features a variety of NFT categories, such as art, music, photography, metaverse, fashion, and videos. Deedy empowers creators to share their art with the community via a launchpad. They also have a unique royalty feature that makes sure creators are fairly incentivized.
To deal with security concerns and ensure risk-free NFT trades, Deedy is using an escrow mechanism. Unlike other marketplaces, Deedy charges a flat fee of $15 for the swap from each party, irrespective of the asset valuation.
Another interesting feature of Deedy is renting. NFT owners can rent their assets to play-to-earn gamers and create an effective revenue stream. It is all hands-off, as the smart contract handles the transferring of ownership. When the rent period is over, the NFT is returned to its owner. This could make a significant impact in the blockchain gaming space.
Adding DeFi functionalities to NFTs, Deedy is introducing a P2P lending platform. This is a capital-efficient model where borrowers put NFTs as collateral and acquire loans. With lending, users can leverage their NFTs to explore other investment options without giving up ownership.
Can Platforms like Deedy Drive Mainstream Adoption?
Considering the product line of Deedy, the platform aims to lower the entry barriers for users to explore the world of NFTs and metaverse. Further, it also promotes the gig economy by bridging the gap between creators and users. So it can certainly attract mainstream audiences to enter the web 3 world and capitalize on emerging trends. All in all, any platform that connects the real world and metaverse with efficient financial products will gain significant traction and seize massive market opportunities.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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