Decentralized finance and nonfungible tokens are experiencing a meteoric rise, and we can surely say that crypto apps are finally breaking through. Moreover, we are watching the fusion of NFTs and DeFi.
The concept of smart contracts made DeFi a very attractive alternative to banks and mainstream financial services. Among the main features that have driven the popularity of DeFi are the absence of central authority, elimination of the need for KYC/AML registration, self-regulation, and many other.
DeFi has already matured to the point where fungibility is not enough. Asset ownership can become so personal, or optimized to such extent, that it would make more sense to use NFTs instead.
The unique, irreplaceable, immutable, and non-fungible nature of NFT makes them an attractive asset for investors and creators.
The world of NFTs is also rapidly converging into DeFi. Led by protocols such as NFT20 and NFTX, NFTs are gaining financial utility by fractionalization and representation as tokens linked to DEX-based liquidity pools. Users can now gain exposure to digital art collections without buying individual pieces.
It seems that in the future the success of crypto products will depend on their ability to engage both NFT and DeFi users. The existence of use cases for both DeFi and NFTs makes it possible to sustain both mega and niche products.