A $69 million collage auction from a creator known as Beeple has raised awareness of digital artwork and non-fungible tokens (NFTs). But the possibilities of NFTs far outweigh the extravagant auction prices. Some smaller, less popular projects are experimenting with gamified art and decentralized finance or DeFi. The resulting technology will also have long-term implications for traditional financial products such as real estate investment funds.
The DeFi movement aims to create a financial product that minimizes or eliminates the need for intermediaries. In this game, dubbed Aavegotchi, we get a glimpse of what the future holds.
Purchase a portal from Aavegochi to summon Pixelated Ghost NFTs with unique stats and personalities. You can style your ghost with hats and skateboards that you can buy and sell in the NFT Marketplace. Your ghost can fight other ghosts, and you can even vote for your civic duty. It is good to know about Aave, a decentralized digital asset lending protocol, to enjoy this game. When you lend an asset to Aave, you get back a receipt, essentially called an aToken.
To summon a ghost using a portal, you need to inject a minimum of sanity in the form of tokens. Remove them, and the ghost will die. Consequently, you must first lend your digital assets to Aave to summon a ghost. Players want to keep the ghosts alive by giving Aave money.
Aavegotchi’s game innovation is that in-game ghost characters have real value. You can burn Ghost NFTs purchased from others to get tokens and use them to extract assets from Aave. Think again if all of this feels too complicated and weird to implement. According to the company, Aavegotchi’s 10,000 NFT issuance last month sold out in less than a minute.
Introduction of Tokens
The new technological standard of the Ethereum blockchain made the introduction of tokens to NFTs possible. For simplicity, aToken is a replaceable token type, and ghost NFT is a non-fungible token type. One is as standard and interchangeable as dollar bills, and the other is unique and rare as art.
Multiple sorts of tokens may be handled concurrently, connected to the previous one. This new technology standard lets this happen. Ghost NFTs can be sold or transferred, and tokens move with the sale. In the blockchain, you can check that this transmission was done together.
These asset transfer and verification practices serve as milestones towards the future of digital financial instruments. Consider a traditional REIT consisting of individual mortgages embedded in a legal framework that describes the ownership rule. Traveling with a proper mortgage bundle tied with a legal wrapper requires a ton of paperwork.
Using this new standard, tokens of various types may be kept simultaneously. Ghost NFTs shift tokens when sold or transferred. The blockchain ensures this cooperative transmission.
They always send the underlying mortgages together with the capital tokens. Obtaining warranties is simple, reducing human error and legal and operational expenses.
However, this strategy may be valuable in other ways as well. Having no digital assets based on anything else allows for fresh ideas to flourish. If you own a virtual world like Decentraland called Earth, you can see it in a metaverse like that. Each piece of land is unique and for sale. Built using Decentraland lawns.
Blockchain Innovation
You can also think of these parcels as uncorrelated assets outside of traditional indicators like the S&P 500. Blockchain innovation makes packaging products that provide access to a wide variety of asset baskets easy and affordable. With this method, investors seeking non-correlated returns may create products with distinct risk profiles.
You can build on virtual land or fight ghosts. These technological innovations in the arts and games lay the groundwork for the endless applications of financial, artistic, and gaming innovations.
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