Important trends you shouldn’t miss

NFT trends to shape Web3

Oar Non-Fungible Tokens (NFTs) important to you? Even if you think you don’t “like” NFTs, some of these upcoming trends could change how we experience the web, sell and buy art, and even create music.

Let’s take a closer look at some recent NFT trends that could shape the digital asset sector in the coming months:

xNFTs

An xNFT is a piece of executable code that inherits the ownership properties of an NFT. xNFT allows us to create decentralized apps (DApps) for the NFT ecosystem using protocol-agnostic frameworks. The interface will represent all your crypto assets and allow you to perform all NFT-related tasks, including viewing NFTs or betting.

Think of xNFTs as an app in the AppStore or Google Play Store. App stores facilitate access to various applications and improve the overall user experience. This is exactly what xNFT aims to achieve.

There is a lot of potential for value creation around xNFTs in the Web3 landscape. It uses Web3 primitives like tokenized ownership, composability, and identity on top of an innovative layer to remove the complexity of crypto infrastructure.

Rentable NFTs

The average person cannot buy even the cheapest NFTs from famous projects like Bored Apes and Cryptopunks. In this situation, renting NFT is an alternative.

The owner of an NFT can rent it for a short period to someone else. An NFT rental marketplace uses DeFi-like blockchain technology to facilitate secure transactions and ensure that an NFT is returned to the owner after the rental period is over.

NFTs can be rented out in two ways:

Rental with security:

Here, the tenant must place collateral worth more than NFT on an online marketplace. In addition, the tenant must pay a rental fee. After the contract expires, the NFT will be returned to the original owner and the collateral will be returned to the borrower.

Rental without security:

Unlike mortgage rental, the lessee does not receive the original NFT. In contrast, the original asset is wrapped as an NFT and backed by the real asset for the lessee. When the contract is terminated, the wrapped NFT is burned. Tenants are not required to provide security in this situation.

Soulbound Tokens

Soulbound tokens (SBT) are non-transferable tokens that represent a person’s identity and credentials on the blockchain. The information may include medical records, employment history, or anything else that is part of who a person or entity is. Wallets that store this information are called souls.

Soul can also represent entities that assign SBTs. For example, businesses or educational organizations can be Souls, issuing SBTs to their employees.

From and including 8 Sept, Binance has introduced soul-bound tokens to its users which Binance Account Linked Tokens (BAB). Accordingly, BAB tokens are available to verified Binance users and are aimed at solving fundamental issues such as airdrop fairness and account uniqueness.

Soul addresses are a compelling concept, but account security is already a major challenge on the blockchain. For Soulbound tokens to be effective, they must be impossible to transfer or replace.

NFT as a loan

Many NFTs on the market are highly illiquid, and many Decentralized Finance (DeFi) projects have identified NFT-based lending as a solution.

Increasingly, NFT-backed loans are offered through DeFi protocols. This allows NFT owners to pledge their NFTs for cryptocurrencies or fiat.

Smart contracts power DeFi lending, enabling transparent, open, self-executing lending solutions without supervision. However, smart contracts are not flawless. These platforms may be vulnerable to flash loan attacks, for example.

Blockchain domain name

Cryptocurrency wallet users know how difficult it is to remember their wallet’s “address”. That’s because cryptocurrency wallet addresses contain a random mix of 30+ letters and numbers.

Unlike traditional Web2 domain names, blockchain domain name is not used to host websites. A blockchain domain name is a non-fungible ERC-721 token that acts as a link shortener for cryptocurrency wallet addresses.

Let’s say Kerry wants to request $500 in Bitcoin from Austin. To make the transaction, Kerry had to log into the wallet, copy his address and send it to Austin. Blockchain domain names, however, simplify the process.

Instead of sharing his address, Kerry could tell Austin that he owns the Kerry.Bitcoin domain. Using Kerry’s domain name, Austin could send $500 directly to Kerry’s Bitcoin wallet (which would put the money into Kerry’s wallet).

NFTs as tickets

NFTs make tickets (ie to an event) more functional and an easy place to collect memories.

It is possible for a paper-based ticket to be lost, damaged or destroyed. Paper-based tickets can also be easily counterfeited. QR codes can solve this problem, but they are not as effective for ticket holders.

NFT ticketing offers many opportunities to event organizers and ticket buyers, such as:

• Organizers of events can distribute benefits and incentives.
• Buyers can sell tickets to upcoming events that they cannot attend.
• Buyers can exchange rare tickets that collectors want.
• Buyers can store tickets safely to keep their memories alive.
• Buyers can engage with the community of an event organizer.

Although many people still do not understand how NFTs work, their revolutionary potential has been recognized. Combined with their ability to act as a form of “digital legacy”, NFTs are becoming increasingly popular for securing the digital legacy of future generations.

Next week we’ll be back with more exciting updates on NFTs. Until then, stay tuned. Buh-bye!