NFTs that are empowered to trigger effects large and small in a financial protocol – from introducing new currency markets, permissions to set up revenue-generating liquidity pools, to unlocking hidden token rewards.
The DeFi and NFT industries have been circling each other for close to three years now, trying to find meaningful ways to interact. NFT-collateral loans are an interesting first step, but with the introduction of embedded metadata and programmable ‘triggers’, the convergence of these two sets just got way more interesting.
The purpose of creating DeFi Collectibles – from the Lendroid point of view – is three-fold.
- Strong Financial Spine for NFT
- Immediate Use Cases for DeFi
- Extensible Utility for LST
There’s also a fourth use case that is on an entirely different plane, which we will get to in a bit.
Strong Financial Spine for NFTs
Over the last six months in the NFT space, we have been building and beta testing a range of financial services for creators and collectors in the space. These range from trust-independent renting and leasing of NFTs, to use cases as varied as revenue sharing and personal finance management.
All of the solutions we crafted during this time are based on aspects of Deleuze, our fully audited antifragile financial protocol. With DeFi collectibles, we have now found a way to meaningfully link Deleuze in all its comprehensive glory with the vibrant demands of artists, musicians and business owners of unique digital assets. For instance, we have been able to create a smart contract alternative to private key based wallets. This makes revenue pooling much more efficient and extensible.
Immediate Use Cases for DeFi
As a corollary to the previous section, we believe that DeFi can expand and grow horizontally only by catering to and joining hands with NFT creators.
By gamifying core DeFi businesses like running liquidity pools, creating currency markets and shield markets, we can offer a whole host of immediate use cases for otherwise standalone DeFi tools.
The convergence also opens up other branches. Case in point, NFT based loans. Instead of struggling with valuation of an art NFT or a gaming collectible, we can tokenize ‘expected revenue’ and create a ‘cash flow’ token, which can then be collateralized. Personal financial management is a huge greenfield area waiting for dependable DeFi solutions.
Extensible Utility for LST
We have a strong community that’s high on LST, the native token of the Lendroid protocol. From the start, we have been unwavering in our approach to ensure that LST fulfils a core utility within the working of the protocol. To do this without rent seeking or otherwise gate keeping participation was the challenge. With DeFi collectibles and the system that will support it, we now have design principles that will decide the utility of LST.
In Deleuze, LST will become part of a staking mechanism that will determine the probability of receiving DeFi Collectibles. LST will also be redistributed to participants who perform a service that benefits the protocol. The important part is, of course, that this will be programmatic and not subjective.
The concept of DeFi Collectibles is unique. And surprisingly straightforward to implement. Lendroid will begin to release the first experiment in Q4 2020. This will take the form of a ‘heartbeat’, a very basic, primary version of the protocol.
For the benefit of our community and in the interest of prudence and security, we will add layers to this heartbeat subsequently, based on a series of beta tests and feedback loops.
For our community, we wish to convey that DeFi Collectibles is the holy grail Lendroid has been looking for over the last few technological leaps. An initiative that combines every promising idea we’ve had – from trust-independent lending to staking, self-sustaining protocols and a revolutionary approach to governance.
While we build this, our primary focus will remain on honing Metatokens and the Pie Contract.
We look forward to your continued support and precious feedback.