How Are NFTs Used in DeFi?

Defi and NFT are considered the two most prominent trends in the Crypto market at the present time. Defi provides decentralized access to financial services while NFT focuses on enabling tokenization of assets. However, now a number of Defi projects have appeared that apply NFT into their products. So what’s special about including NFTs in Defi projects? Let’s find out with Weakhand in this article.

Before jumping into the article, everyone can refer to some of the following articles to better understand

• What are NFTs? All about NFTs
• What is Defi? The pieces that form Defi

Critical Success in Building a Crypto Project

Technical innovation is only part of building a successful Crypto project. The other extremely important part is called community because it is the feeling of belonging to a group of like-minded people that makes people more interested in the project.

A highly motivated community serves as the champion of the project’s marketing efforts. Community members share about the protocol on social networks, talk about it with their friends, and give valuable help to the project even without being paid.

Token community building can work quite well as prices increase and attract more participants. However, when the price drops, the community will lose interest and die.

NFTs Are Used to Strengthen the Defi Community

NFTs are different from Defi projects because they themselves have no underlying value. But NFTs excel at community building and strive to go beyond price speculation. That’s why it’s no surprise that a number of Defi projects are testing NFTs in their projects. A limited number of Non-Fungible Tokens will create an exclusive club within the project community and also help differentiate the real OG from the rest.

It also offers a great opportunity to reward the most dedicated members with additional perks. Below are the Defi projects deployed for that purpose:

Dydx’s Hedgies NFT

In addition to Hedgies being used as NFTs representing community profile photos. Hedgies NFT holders get a one-step reduction in fees on the Dydx protocol. For example: If you hold 5,000 Dydx Tokens, you will receive a 10% reduction in fees when trading on Dydx (equivalent to level 3), but holding additional Hedgies NFT will help users increase to level 4 with a 15% discount. transaction fees.

GMX Blueberry Club

GMX Blueberry Club was launched in December 2021 and all revenue earned will be transferred to the Treasury. The funds in the Treasury are then used to purchase GMX and GLP Tokens for profit and redistributed to users as GBC NFT Staking rewards. In addition, the team also manages this Treasury using governance votes (1 GBC = 1 Vote).

Pancakeswap Bunny NFT

Pancakeswap allows people to set up avatars with Pancakeswap Bunny NFTs. To mint 1 NFT, users must spend 1.5 CAKE tokens. Creating a profile using the Pancakeswap Bunny NFT will allow users to share their profile photo and NFT achievements with friends, while also allowing users to participate in special events of the PancakeSwap team.

Two Dopex NFT collections

Dopex has two NFT projects for its fans. First is Dopex Diamond Pepes NFT – a collection of 3,333 NFTs divided into two generations. The first generation consists of 2,222 NFTs created by Dopex LP holders while the second generation consists of 1,111 NFTs but has no launch date scheduled.

All NFTs can be locked called NFT Pledged and get a free spot in the next collection with a 12.5% ​​increased chance of getting a rare trait. First generation Pledged NFTs can receive a revenue share (15%) from the second generation NFT sale. Additionally, Diamond Pepes NFT owners can also participate in Duel Pepes – a PvP game where players can bet cards, choose moves and open up challenges to others.

The second NFT collection introduced to the community by Dopex is called Dopex NFT includes 2,190 randomly minted pieces and complements the original 32-piece Dopex Genesis NFT.

All NFTs draw on the history and community of the Dopex protocol to show their appreciation for the project. The raised funds are Staking on DPX – ETH LP with all rewards going to Dopex NFT owners.

Platypus NFT

Platypus NFT is a collection of 10,000 NFTs deployed on Avalanche, used to improve performance for liquidity providers when participating in Farming on Platypus Finance.

Each NFT called Platypus Heroes is created with one of the following skills:

• Speedo: Increase vePTP generation speed by a certain %.
• Pudgy: Increase vePTP generation limit to a certain %.
• Diligent: Amplifies vePTP generation by a fixed amount (limited)
• Gifted: Increases the user’s vePTP and vePTP limits by a fixed amount.
• Hibernate: Retain a portion of vePTP when canceling Staking (limited)

In addition to the above attributes, each NFT has a different rarity such as: Rare, Common, Exceptional,… and will significantly affect the skill index of each NFT. Users can also use the Platypus NFT as an avatar and gain access to the Platopia Savior club.

Aavegotchi NFT

Aavegotchi is governed by AavegotchiDAO and the native governance token GHST. It is worth mentioning that Aavegotchi is not an official project of Aave but a project that received the Aave Ecosystem Grant. Aavegotchi benefits the Aave ecosystem by partially backing assets deposited on Aave. Therefore, it brings additional liquidity to Aave. So it’s no surprise that some members of Aave’s team use Aavegotchis as their profile pictures.

Gains Network NFT

Gains Network NFT is an NFT collection developed by Gains Network that includes 5 different types of NFTs from copper, silver, gold, platinum to diamond. Owning Gains Network NFT offers users a variety of benefits including:

• Trading spread reduction: -15% (bronze), -20% (silver), -25% (gold), -30% (platinum) and -35% (diamond). Users simply need to hold the NFT in their exchange wallet.
• Run bot to receive rewards from order liquidation. All NFTs are equally enforceable in this respect.
• Increase users’ earned Staking rewards by Staking up to 3 NFTs. The increases are 2% (bronze), 3% (silver), 5% (gold), 8% (platinum) and 13% (diamond).

Alpaca Finance’s Alpies NFT

Alpies NFT is a collection of 10,000 hand-drawn NFTs released in two parts on BNB Chain and then Ethereum. Alpies NFT includes two types including:

• Dauntless includes 5,000 darkness-themed NFTs sold on BNB Chain.
• The Dreamers consists of 5,000 remaining light-themed NFTs sold on Ethereum.

In addition to users being able to use the Alpies NFT as a profile picture, users can collect 3 Alpies NFTs to gain access to the game developed by Alpaca Finance. As for the gameplay, it will be similar to Axie Infinity as there is a breeding mechanism that allows these Alpies to create more Alpies. Breeding will generate revenue for Alpies NFT holders by allowing them to sell their newly minted Alpies.

In addition to participating in gaming, Alpies NFT owners also have a number of other exclusive benefits including:

• Participate in the Presale round for future Alpaca game projects
• Maximum leverage is 50% higher on Alpaca Finance
• Future NFT airdrops/giveaways
• Beta access to the Alpaca game
• Detailed game statistics
• Exclusive free game items
• Breeding NFTs
• Access to exclusive Discords (Illamanati for Dauntless, Knights Tempaca for Dreamers, and both can access The Paws That Be)
• Exclusive access to actual Alpaca merchandise

summary

Overall the inclusion of NFTs in Defi projects could serve as an additional boost to the community, giving the community something to rally around. Especially in difficult times when Token prices are not good. Above is all the information I want to provide in this article, hope everyone has received useful knowledge.