DAO Capital invests in Nftfy — fractionalization of NFTs for DeFi
DAO Capital is proud to announce our recent investment in Nftfy, a robust decentralised open marketplace for anyone to monetize assets, art, land, and collectibles. Nftfy is a pioneer in the cryptographic space, being the first decentralised protocol that securitizes Non-Fungible Tokens (NFTs) by dividing them into ERC-20 compliant shares which are backed by NFTs.
The backing mechanism is open-source, completely decentralised, totally software-guaranteed, and without intermediaries or exclusive agents. This is the easiest way to securitize an NFT and allow anyone to sell Shares of it — this process allows for liquidity, portfolio diversification for both issuers and investors, and pooling of NFT assets.
The Current State of the NFT Market is Problematic
The NFT market is in the midst of the type of hype-cycle that has not been seen in the blockchain space since the 2017 Initial Coin Offerings. However, this space is plagued by significant issues that are yet to be addressed:
- Low Liquidity: lack of liquidity limits the presence of more investors in the NFT ecosystem
- Investment Risk: due to speculative values, investors face a high risk of buying expensive items that could be worth nothing later
- Monetization of Assets: NFTs may be unable to be sold as they are only worth a significant amount and unable to be broken down into smaller shares
Securitization of NFTs and shared ownership mechanisms provided by NFTFY solve these major problems in the market and it improves the real-world viability of NFTs and their use.
The Solution: Fractionalization and Issuance of Shares
The primary purpose of Nftfy is to securitize an NFT into ERC-20 shares. The securitization process in relation to real-world assets is centralised and requires considerable compliance and regulation by a government or an agency to guarantee the backing of value for all participants. The involvement of these intermediaries and regulators results in an expensive, time-consuming, and inefficient process.
Nftfy does this through an entirely decentralized and software-guaranteed backing mechanism, without the need for any intermediary such as regulators, auditors, or compliance. Nftfy brings legal contractual elements through the Lex Cryptographia methodology and employs legal contractual concepts through Smart Contracts, guaranteeing user rights in a simplified way.
Securitization of NFTs provides significant advantages to both investors and issuers.
- Increased Liquidity: possibility to earn money by disposing of only part of the asset
- Share/Transfer risks: opportunity to divide the duties of the asset among the parties
- Lower capital requirements: it refers to the possibility of having the asset priced by the market, leading to a cheaper and safer operation for it as collateral. Therefore, it becomes easier to request credit from the market.
- Portfolio diversification: opportunity to divide the duties of the asset among the parties
- Possibility to invest in specific pools of high-quality assets
- Opportunity to earn a high rate of return on investment as there are more options available
Nftfy Value Proposition
1. NFTs Valuation — Nftfy’s decentralised marketplace will bring in liquidity and trading shares on a free market, creating the possibility for NFTs to be measured by their value observed by the market in real-time. The current markets in the industry such as Opensea and Rarible are peer-to-peer marketplaces that lack liquidity to find a proper valuation of the asset.
2. Private Offerings — Issuers of NFTs will be able to raise funds on Nftfy to a private group by only selling a fraction of the asset. With numerous interested parties, it is anticipated that a network effect can be generated, which can increase the valuation of a shared asset, particularly rare NFTs such as Crypto Punks and Hashmasks which otherwise would lack investors due to their high valuations. Essentially this increased liquidity will lead to increased transactions and the democratisation of ownership.
3. Public Offerings — Once an NFT has been divided into ERC-20 compliant shares through the Nftfy protocol, all traditional functionalities of the current crypto ecosystem can be explored.
- Security DEX Offering (SDO) — A concept based on IDOs and previous ICOs, public offerings of securities can be done through an AMM or even a Launchpad. Both investors and projects are choosing the route of a launchpad to launch their project, creating significant hype in this space. Nftfy being able to offer NFT launches will be able to join this growing market space.
- Curation Market: Nftfy Nest — environment to boost the liquidity of new tokens, will be powered by Balancer. Balancer will be providing marketing and promotion support for new markets, liquidity mining incentives, further contributions to enhance liquidity to shares backed by NFTs
$NFTFY token will be a fungible ERC-20 token and will be the entire basis of the whole economy related to the ecosystem created by Nftfy’s protocol of NFT fractionalisation.
1. Utility in Nftfy Ecosystem — $NFTFY will act as a liquidity base (collateral) for securitized contracts. Tokens will also boost the ecosystem of the new ERC-20 contracts through liquidity mining.
2. Governance — $NFTFY will have voting rights to a decentralised governance, directly affecting the public offerings of the shares created on the platform and other related mechanisms.
Although $NFTFY tokenomics have not been fully disclosed, it is expected that the token will provide utility in the scheme of rewarding token holders and token burning, provide access to DEX Offerings on the protocol, and be used in accumulating process of high potential Shares by the DAO. It is anticipated that Nftfy’s community will work on improving the utility of the $NFTFY token and bring further liquidity to it on other DeFi protocols such as Balancer and Uniswap.
The Nftfy team behind the project possess the credentials and strong track record to succeed in carrying out this ambitious project
Leonardo Carvalho — Creator and Project Lead of Nftfy
Bachelor of Engineering (B.Eng.)
Part of BlockchainBH Community, Previously Co-found CEO of Cryptonita Social Trading.
Rodrigo Ferreira — Smart Contracts Specialist
Ph.D., Yale, Computer Science
Blockchain Architect, Toptal Freelancer, Creator of the wallet Cashu with support of more than 30 Cryptocurrencies.
Vinícius Vasconcelos — Product Management and Public Relations
Masters in Electrical Engineering
Blockchain and DeFi enthusiast, Tokenomics designer.
André Salles — Legal counsel & Business Developer
Lawyer, Member of BlockchainBH Community. MBA Professor of Blockchain and Cryptoeconomics.
Fabrício Miranda — Solutions Architect
Team Lead with 12 years in Software Development. Experience with DeFi Applications and Crypto Exchange
Nftfy is a robust decentralized open marketplace for anyone to monetize assets, art, Lands and collectibles.
About DAO Capital
DAO Capital is a community-governed investment fund consisting of blockchain advocates that provide genuine value and services to new projects by offering our expertise in four critical areas: Funding, marketing, engagement, and sustainability.
DAO Capital has a long-term vision towards the projects that we invest in, ensuring sustainability, growth, and security. Code is the basis of blockchain innovation, yet the communities surrounding the networks are what give them value. Our commitment extends far beyond simple investing. To date, Dao Capital has invested in numerous significant crypto projects such as Xend Finance, Aubit, Pollen, Yield App, YOP Finance, Archer DAO, Geeq, SigmaDex, Freela, and Hyve Works.