Ask anyone what an NFT is, and they will instinctively think of digital art – the CryptoPunks, Bored Apes and Ether Rocks sold for striking sums.
In some circles, non-fungible tokens have been rejected as a vehicle for speculation, with critics complaining that the demand for such assets is driven by greed.
But this argument does not give us the full picture. We’re barely scratching the surface of what these unique tokens can achieve – and new use cases are constantly emerging.
The music industry is currently researching what NFTs have to offer. Live Nation, one of the world’s largest entertainment companies, has started offering digital versions of tickets – giving fans a virtual memory of the performances they have attended. Other platforms allow consumers to invest in new music and receive a share of the royalties. TV shows and movies are also funded through NFTs – and despite a backlash from gamers, gaming brands are also playing with this technology.
NFTs also have the potential to enhance existing crypto services, with DeFi one of them. What if this technology could be used to unlock access to specific permitted services …
While the “NFTification” of the decentralized sector is seen as inevitable in some crypto circles, there are some obstacles that need to be overcome. Let’s explain why.
NFTs cost a mint
Unforgettable, any discussion about what NFTs like about playing a larger role in the DeFi ecosystem should start with the cost of minting such tokens.
Even on a robust Layer 2 network, transaction costs mean that it is often uneconomical to create, distribute and trade NFTs. This explains in particular why these crypto collectibles are so exorbitantly priced – not to mention why new use cases for non-fungible tokens are only being explored at a glacial pace.
While traders are impatiently waiting for Ethereum’s Proof-of-Stake network to launch, this blockchain has become priceless to many everyday users. While faster, cheaper and more scalable rivals have emerged in recent years, some have been hurt by repeated interruptions – questioning their reliability.
But what if users could be offered a completely gas-free experience while trading? Could this be the silver bullet that draws tens or hundreds of millions of users to space – people who would be attracted by the development that would stimulate this?
Such an approach would be beneficial for NFTs and the DeFi sector, giving crypto enthusiasts the freedom to trade however they want without having to worry about costs. But from an infrastructure perspective, there are other issues that need to be taken into account.
Innovate in DeFi
At present, high gas charges mean that trade and agriculture are financially impractical for smaller users – while slow bridges connecting the Ethereum mainnet cause Layer 2s frustration. A lack of stickiness has also arisen in the DeFi space – with users frequently moving from platform to platform in search of the best opportunities in the short term.
Of course, an even bigger barrier is to get people to see what decentralized protocols and automated marketers (AMMs) have to offer. A poor user experience – and more sophisticated features on centralized platforms – often give investors a bit of an incentive to make the leap into DeFi. The downside here is that consumers end up giving up control over their own crypto as a result.
But that does not have to be the case – and one team says it has built the first NFT-powered AMM designed “from the ground up to solve a series of critical issues for DeFi.”
A jewel of a product
Ruby.Exchange builds its infrastructure on SCALE, which is described as a powerful, multi-chain solution for Ethereum. The SKALE chains have zero gas costs – and have a fast, decentralized and safe bridge to the mainnet where transfers in both directions can take minutes, instead of hours or even days.
And while the value of NFTs may be uncertain, with limited ways in which they can be used, Ruby offers gems – “beautiful, generative works of art that drive loyalty by depicting real utility as artistic value.” These assets have a major role within their AMM.
This exchange says it delivers a feature-rich and gamified user experience where NFTs are mixed for user profiles, as vouchers for rebates for trade fees, and to ensure customers get access to the premium features they have come to expect – native charting and advanced analytics among them. Yield agricultural boosts are another use case.
What’s more, a gamified trading and farming experience delivers that elusive “stickiness” that DeFi protocols currently lack – rewarding long-term involvement and benefit to all users by helping to prevent capital from migrating elsewhere, which of influence is on liquidity.
Going forward, new classes of NFT gems will be created – and because Ruby’s dashboard for analytics and liquidity provider will be set up, ownership of non-fungal tokens will be the key to unlocking access.
NFTs and DeFi have shown so much promise in their early days, transforming the worlds of art and finance. Ruby.Exchange has now been established to show how powerful the “NFTification” of decentralized finance can be.
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