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NFTs Are So Much More Than Just Digital Collectiblesby@originprotocol
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13,735 reads

NFTs Are So Much More Than Just Digital Collectibles

by Origin ProtocolFebruary 2nd, 2023
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Non-fungible tokens (NFTs) have become synonymous with the digital art frenzy they’ve spawned in recent years. The technology has the potential to disrupt industries magnitudes larger than traditional art. NFTs are primed to tackle monolithic industries – from real estate to finance, and beyond.

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Non-fungible tokens (NFTs) have become synonymous with the digital art frenzy they’ve spawned in recent years. However, the technology has the potential to disrupt industries magnitudes larger than traditional art.


Origin Protocol’s NFT arm Origin Story is building branded marketplaces to cater towards the multifaceted innovations to come.

NFTs as a Diverse Disruptor

At their core, non-fungibles simply denote unique blockchain addresses that cannot be replicated. Tying artwork to these addresses has been a vital and well-suited proof of concept for this budding technology.


In the realm of art-based NFTs, creators enjoy several key benefits compared to traditional art structures:

  • Independence from predatory intermediaries
  • 100% of royalties from secondary sales, forever
  • Verifiable provenance – minted artworks can be easily distinguished from copied images to maintain authenticity

Art-based NFTs have clearly illustrated these benefits. However, these advantages are by no means unique to art itself.


Rather, the dis-intermediating mechanics offered by NFTs are primed to tackle monolithic industries – from real estate to finance, and beyond.

The Rise of Real Estate NFTs

The $11T traditional real estate industry is underpinned by necessity – everyone needs a roof over their heads. While many industries have evolved substantially over time, real estate remains plagued by redundant intermediaries. As a result, homeowners often incur fees upwards of 10% when selling their properties. Further, transfer of ownership can take up to 60 days under the traditional sale structure.


Origin Protocol made a first foray into disrupting this asset class in October 2022. The protocol partnered with real estate heavyweight Roofstock to build the first-everNFT real estate marketplace for physical property exchange.

The marketplace’s first saledemonstrated the vast power of tokenized real estate exchange.

A three bedroom home sold for $175,000 fixed in USDC. The seller benefited from savings of over 50% with fees amounting to only 3%. Both parties enjoyed the benefit of near-instant finality, with funds and full ownership transferred immediately.

And this implementation is just the tip of the iceberg for what real estate NFTs can achieve. Commercial real estate can greatly benefit from fractionalization offered by NFTs. Simply put, fractionalizing an NFT allows multiple parties to own shared interest, streamlining the process of multi-member ownership. Conglomerates acquiring shopping centers, parkades, and more can enjoy fractional ownership with far less friction than ever before.


On a consumer level, friends and families could fractionalize properties for investment purposes that would otherwise be unaffordable.

The flow for tokenizing real estate as NFTs, both as fractionalized NFTs and entire assets: TokenizedHQ

NFT Finance – The Age of NFTfi

The immutable proof of digital ownership offered by NFTs is primed to disrupt traditional finance and turbocharge innovation in DeFi.


While traditional markets are highly regulated, document fraud remains rife. Company financials and other sensitive documentation become far more transparent, accessible, and easily verifiable by implementing NFTs.


Non-fungible tokens in DeFi allow for far greater flexibility and fresh opportunities for users. Applications can now let investors create bespoke financial positions and trade them as NFTs. The first major example of this was with Uniswap V3, which allows liquidity providers to set custom price ranges via non-fungible tokens.


Origin Protocol’s recent partnership with leveraged stablecoin platform Archimedes clearly illustrates the budding innovation in this sector of NFT utility.


Archimedes allows users to leverage their stablecoin holdings up to 10x. All open positions are represented as NFTs, which users can freely trade on secondary markets. Unlike most DeFi investments, these financial positions must be NFTs, as the leverage and amount of stablecoins staked in these positions vary.

NFT Collateralization

Decentralized lending protocols have offered collateralized lending for fungible tokens for years.


Recently, protocols like BendDao have emerged to offer dedicated NFT lending services. Anyone can now stake their NFTs as collateral in order to borrow ETH or other digital assets.


At present, this model caters exclusively to art-based NFTs. However, as the space continues to grow, it's inevitable that tokenized real world assets will be used in the same way. NFT holders will be able to put up their assets as collateral in the near future to instantly unlock capital. These assets could range from cars and homes to trading positions and more.


This process is far more seamless than going through traditional banks that offer loans. Given that DeFi lending is conducted directly via smart contracts using blockchain technology, users are freed from the red tape that plagues the typical financing process .

A flowchart showing the use of NFTs as collateral in lending protocols: SimpliLearn

Building for Real World NFT Utility

Origin Story builds branded marketplaces from the ground up for partnered projects. As NFT utility evolves to meaningfully disrupt real world asset classes, the need for robust, native platforms is set to explode.


Origin is laying the foundations for the next wave of innovation to come by providing robust infrastructure with deep analytics.


If you are a creator or brand interested in learning more about Origin Story and Polygon, contact us at [email protected].

FAQs

How can NFTs disrupt traditional industries beyond art?


NFTs can revolutionize buying and selling in major asset classes by removing the need for redundant red tape.


What benefits do real world NFTs offer for consumers?


Streamlining transactions and reducing bloat offers direct savings for end consumers. For example, real estate transactions on NFT marketplaces incur far lower fees than those seen in traditional real estate.