NFT collateral, HBD on Cubfinance and 2022 more exciting
NFTs have applications in various areas of our lives. Many people talk about its application in art but it can also be used in gaming, music, real estate, and basically anything that you can imagine.
The limitless possibilities in the way we view ownership of properties and ideas have changed. Thanks to NFTs, you can have digitally secure entities that are copyright-proof and can't be stolen through normal means.
The only issue with NFTs is that the market is still relatively small and so is the interest. To put it plainly, people aren't as interested in NFTs as they are in cryptocurrency.
This low level of interest translates to low liquidity in the NFT market. So, what you might see as the price of a particular NFT could just be derived from one sale in a gazillion years.
The lack of interest and trading volume makes it rather difficult for NFTs to have secondary applications beyond representing ownership. People don't quite perceive the assets as being valuable enough to warrant the existing trading volume, talk less of investing in them.
NFT as collateral
In reality, NFTs are supposed to be among the assets that people could use as collateral. Just like the deed to your land, NFTs offer a more genuine asset because unlike the deed to your property, FTs can't be forged.
The advancement in digital ownership of properties and assets means that as time goes on, we'll be seeing more projects introduce collateralized NFTs as options for taking loans.
Right now, there are only a handful of projects that facilitate NFT collateralized loans and while I applaud them, we also have to accept that these projects are taking a great risk.
They're giving loans based on assets that have a very limited market. I don't know how feasible it is to do it consistently, but I believe that with the right assets, it's possible to grow.
NFT collateral is only possible when you offer loans based on specific NFT projects that have decent trading volume. For example, offering someone a loan with a Hive punk as collateral isn't exactly good business but Splinterlands asset is much better.
Looking at the raw data, Splinterlands assets have much more trading activity than any NFT project on Hive. So, offering a loan with Splinterlands assets as collateral isn't a big risk. In fact, it's most likely going to be profitable in the long run.
Hive is one of the best places to build, but we still don't have active smart contracts that could handle such operations. For now, loans are based on the exchange of ones keys, and I think that's pretty crude.
NFT loans will play a big part in the future of the crypto industry, and so, if we're going to meet up the standards, we need a sound way to conduct the transactions.
HBD coming to Cubfinance
One of the platforms that could facilitate loans in the near future is Cubfinance. The project is constantly growing and offers a reliable route to farm on BSC.
The beauty of Cubfinance is that despite running on Binance smart chain, it really feels like a Hive project. Although I was duly reminded that it's not a Hive project when I got hacked and robbed, that's a story for another day.
Anyway, the news coming to me through a Tweet by the team's Twitter account is that it is possible that HBD farming is coming to Cubfinance. This move is going to be really incredible and might I add, one that I've been anticipating for a long time.
Right now, there are only a few Hive-based assets used in farming on Cub finance. Adding HBD to the list makes it even more interesting.
At the time of writing, we already have a zero-risk farming option on Hive that pays 12% APR for saving HBD. There are no downsides, so Cubfinance simply has to offer something better or different at least.
There hasn't been any official announcement, but according to the Khalendar, we can expect it soon.
So much more to come
There's so much to come in 2022, and it's hard not to get excited about it. The Splinterlands general sale starts in roughly 21 days, and that will be very exciting for all participants.
There are also the airdrops for both Ragnarok game and the Larynx. WIth Ragnarok looking to be more community-oriented, we might see NFT loans being somehow injected as a use-case for the assets in the game.
We'll also be seeing project blank and a couple of additions to the Leofinance ecosystem. There's also the Polycub airdrop with details being slowly rolled out, project blank, and maybe an airdrop to accompany project blank.
It's hard not to be excited by what is to come in 2022. I hope everything goes according to plan and we all start next year in a much better position than we're ending this year.
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