NFTs offer cultural, crypto bridge out of Fiat

Non-fungible tokens (NFTs) are inextricably linked to blockchain technology and the wider crypto ecosystem due to their technical design.

In the early days of the technology, this meant that there was a significant overlap between the community of people creating and collecting NFTs and those with an interest in what had previously been the primary use case for blockchains – cryptocurrency.

In recent years, NFTs have been picked up by artists, gamers, marketers and others interested in owning digital objects. But with increasing acceptance from the mainstream, a number of players who previously had no interest in crypto have now found themselves face to face with Ethereum and other related blockchains.

As Eytan Messika, co-founder and CEO of French-Israeli crypto startup Nilos, told PYMNTS in a recent interview, “NFTs were the bridge from culture to crypto.”

It was from this observation that NFTs had brought a number of “culture-type businesses” into the crypto market that Nilos, which this week (September 21) announced a $5.2 million funding round, was founded as a platform to helping companies with crypto. -based income streams convert their income into fiat currency.

Related: Instagram is testing NFT sharing with select creators, collectors

But it’s not just the need to exchange crypto for fiat that they’re dealing with, he said. Nilos can also help businesses with the necessary monitoring and tax administration required to manage crypto, as well as make the incorporation of NFTs into a business strategy more realistic and accessible to a variety of brands, artists and freelancers.

See also: Andreessen Horowitz leads license fee to protect NFT market

While the NFT movement was a catalyst for Nilos, many companies in the ecosystem only generate crypto revenue, Messika added, noting that even in the decentralized finance (DeFi) space, businesses have expenses that must be paid in fiat: “At one point or another, everyone has to these companies have fiat payment and liquidate their money.”

What’s more, he even said “people who you would never have thought would need to clear their money, like DAOs [decentralized autonomous organizations],” everyone must manage both fiat treasury and crypto treasury.

Manage crypto income, Fiat should be the same

While Messika acknowledges that there are other ways to convert crypto to fiat, he believes that existing solutions do not meet the needs of smaller businesses due to extensive onboarding processes and high volume requirements.

And while “crypto-friendly banks” can handle volumes in the hundreds of thousands, freelancers, artists and smaller companies have a need for off-ramping on a different scale, he said.

Crypto trading platforms also don’t meet this need, he added, saying that trying to run everything through a platform like Kraken or Coinbase would make it extremely difficult to keep track of transactions.

This is where Nilos steps in to help businesses keep track of crypto revenue. As Messika explained, “The idea is to be able to unify different accounts and make sure you have a single dashboard where you can see multiple earnings,” making crypto income management as easy as managing fiat income.

Continuing the analogy that managing a multi-crypto operation and multiple fiat currencies should be no different, Messika said the goal is to be as agnostic as possible when it comes to different types of blockchains.

For example, there has been a strong emphasis on Ethereum – partly because of the way it has been central to the development of the NFT space so far – but he said that Nilos has already expanded to Polygon because it has allowed the company to scale and diversify its customer base.

Learn more: Despite Ethereum 2.0 Merge Hype, Crypto Payments Will Not Change

As to why the Ethereum ecosystem continues to thrive, Messika attributed it to a “Lindy effect” around the ether market – “the more something is already established in the market, the more likely it is to last.”

In the end, it all boils down to trust, he said. Pointing to well-established communities of Ethereum developers, users and miners, Messika noted the strong network effect in the way Ethereum has been established and said it remains the most widely used and most trusted chain. [there is].”

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