Design concept
The term asset is not solely based on the concepts of β€œownership + quantity + type ”, but have multiple additional dimensions.These include but not are limited to, maturity date, interest rate, leverage ratio, risk rating, etc. Fungible tokens based on the token standards ERC20 and BEP20 are incapable of containing these additional dimensions. On the other hand, NFTs are viable to become the means to these complex financial products. NFT assets can easily participate in activities involving collateral, lending, combinations and trading. The price evaluation for NFTs, determined through a well-developed price oracle, is based on its underlying asset. Thus, NFTs are the base infrastructure for DeFi derivatives in the crypto world. xPlanet is going to provide trading and lending markets, yield opportunities, installment plans and mint centers for financial NFTs, making restricted assets (e.g. LP Tokens and aTokens as collateral) liquid. Thus, turning previously restricted assets into the underlying asset of derivatives, improving capital efficiency.
The NFT market is still in its infancy. At this early stage, there are still plenty of technical issues and uncertainties surrounding business models. A huge portion of NFTs value is yet to be discovered. Currently, artwork and collectables make up the majority of the NFT market. With the release of Uniswap V3, we witnessed the upgrade of turning LP Tokens into Positions NFTs. These NFTs have an edge on fungible tokens in many domains, such as market making. We believe NFTs to be the solution for countless applications that will be built in the future.
The leading projects of the DeFi ecosystem, such as Uniswap, Compound, AAVE and Synthetix, all hold numerous restricted assets. The key to activating these assets is to turn them into NFTs and provide circulation scenarios for DeFi NFTs. This transforms restricted assets into circulating assets, growing their value, thus increasing the capital allocation efficiency of the DeFi world.
After a fungible token is turned into an NFT, the asset becomes programmable with additional descriptive parameters. Operations related to the asset can be performed automatically on the blockchain, making NFTs an efficient representation of assets. Although the NFT is illiquid, the underlying assets can interact with more applications, making the assets activity ratio, asset turnover ratio, and value created, significantly higher. For these reasons, xPlanet has built a multi-chain aggregated Mint Center.
Some scenarios lead to programmed assets (NFTs) growing in accordance with certain rules. An NFT can have a factor of future yield affecting its present value, creating fluctuations and generating a desire for transactions. In the scenarios of DAO governance and GameFi, the same type of NFTs with different parameters can greatly vary the value and collection demand. Based on this, xPlanet has built a multi-chain NFT marketplace.
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