Feisty Doge triggered an upsurge of "order matching". Is NFT fragmentation the general trend or liquidity overdraft?

Published on 8/26/2021   568 views   0 Comments  

Original title: Community debate on NFD after "tearing" NFT

" NFT fragments: general trend or liquidity overdraft& quot;

The day before yesterday, this picture brushed the screen of the encrypted community:

23, path eth@Cryptopathic Created feisty Doge's NFT token NFD, which is a fragmented NFT based on the dog coin head.

NFD divided the ownership of a photo of the Chaigou (the prototype of the dog coin avatar) originally named Kabosu, with a total of 100 billion copies. On the day of issuance, NFD rose to US $0009, with a trading volume of more than US $140 million in recent 24 hours.

On the day of release, this picture became the most expensive NFT.

If the fragments of the NFT are visualized, the NFD held by the investor is about as follows:

Then came the leverage effect of the event. Some cryptocurrency derivatives platforms soon provide borrowing, lending and shorting tools for NFD. Investors can establish short positions through uniswap V3 and sushiswap.

Soon, the encryption community focused on the surge in liquidity after NFT fragmentation. Dog picture NFD has become ย  NFT "fragmentation" is a long lost opportunity.

However, is it a blessing or a curse for the polarization of the market's view on the "fragmentation" of NFT?


NFT version of the "single spell" phenomenon has "started a prairie fire"?

How did NFT fragmentation evolve and suddenly become popular because of this dog photo?

The early landmark case of NFT fragmentation is the painting everydays: the first 5000 days. This painting is also the holder of the most expensive NFT before the NFD broke the record.

At the end of 2020, NFT fund named metapurse acquired 20 works in everydays: the first 5000 days, and issued 10 million erc20 tokens B20 (beeple 20 Collection) on Ethereum, which were sold in two phases. Through these tokens, the NFT assets held by the fund are divided.

Metapurpose owns 59% of the total B20 tokens, and the remaining 41% is reserved for artists, partners and investors. Under such distribution, B20 is said to be highly centralized, which has disadvantages.

However, in any case, the ownership of the work has been redistributed by "fragmentation".

In this way, the "partial ownership" token provides a solution to the liquidity problem of NFT, allowing users to split a complete NFT into several erc20 standard fragmented tokens. These tokens are traded through the secondary market, which reduces the circulation difficulty of NFT and the investment threshold for investors to participate in NFT and other collections.

In the first half of 2021, "fragmented" NFT is slowly infiltrating the encryption community.

Under the NFT boom, a large number of popular NFT collections are frequently hundreds of thousands of eth, and the price remains high, raising the participation threshold of new encryption investors.

For a long time, NFT fragmentation has been regarded as the best way to solve NFT liquidity. Nftx, niftex, fractionalart, unicly and other industry platforms have been providing investors with easy-to-use tools to "tear up" NFT.

Many well-known NFT projects that have been "fragmented" can be seen in the NFT fragmentation platform nftx. Cryptopunk accounts for a large proportion.

(image source: nftx)

There are currently more than 123 cryptopunks on the platform. these ย  Cryptopunk holders have chosen to fragment their avatars and convert each cryptopunk into erc-20 token "punk". Investors can purchase these avatars with punk as the unified pricing unit.

(image source: nftx)

The encryption community also has active exploration in NFT splitting. A new community of "NFT Daos" has emerged, which provides NFT management services in a small range based on the community.

Take the earlier Jenny metaverse Dao as an example. The community is composed of NFT collectors, artists, creators, projects, funds and influential people. It issued the erc20 token ujenny on the unicly platform, representing part of the ownership of all NFTs purchased by the organization.

In addition, ujenny token has been given some new functions, such as participating in mining on the unicly platform.

It seems that "circle culture" has found a suitable soil for splitting cryptopunk avatars. On the overseas community application platform discord, some group leaders acted as the leader and initiated the Avatar "crowdfunding" through Dao organization.

Representatives of these organizations will launch a cryptopunk crowdfunding. After the auction is successful, participants will get a number of new tokens corresponding to their capital contribution. With the "split token" in the wallet, you can directly participate in Dao governance in discord.

To some extent, the cryptopunk fragments here are more like a "pass" for an exclusive community.

(picture: on the social platform, an investor showed that punk was purchased by crowdfunding through Dao)

Through these methods, investors can partially hold the avatar known as "Lamborghini in NFT" for a small fee.

Interestingly, in overseas communities, some NFT investors also shared their investment logic of "fixed investment" punk in this way, and thought it was "within their ability".

In overseas communities, the discussion on NFD pushed the heat of fragmented NFT to a high point: with the emergence of firewood dog pictures with meme characteristics and NFD, the industry rekindled the expectation of "liquidity" and "increment" brought by NFT fragments.

Affected by NFD, the attention of NFT investors quickly shifted to cryptopunk fragments in just a few days.

The case of NFD provides a case for people who spend a lot of money to buy a picture: fragment and sell their valuable NFT, and even make further profits on the basis of owning the NFT.

Since the development of NFT fragmentation, the mainstream idea is:

Fragmentation of NFT body:Like a precious painting.
Fragmentation of NFT interests:Rights and interests can be either pledge rights and interests, work rights and interests, or liquidity dividend rights and interests.
Linkage of NFT with other methods:Such as mobile mining, nftfi, gamefi, etc. it can be seen that there is still a lot of space for fragmented NFT to be excavated.

It can be seen that there is still a lot of space for fragmented NFT to be excavated.

There are serious differences in community views

Is NFT fragmentation the general trend or liquidity overdraft?

The popularity of NFT fragmentation makes the market see more possibilities of NFT in the era of defi.

Optimistic investors see from the case of NFD that NFT fragmentation complements capital liquidity and capital efficiency.In the secondary market, the trading volume of NFD in the last 24 hours is still more than US $10 million.

(data source: coinmarketcap)

In addition, NFT mortgage lending has been another difficulty in the NFT track for a long time. If NFT fragments can continue to obtain higher liquidity and act as collateral, the mortgage problem will be solved.

For most investors, everydays: the first 5000 days, which is far more than 69 million, is difficult to reach. The top NFT asset splitting token may represent a development trend. Fragmented NFT, like ordinary tokens, is even easier to understand and accept. After the fragmentation of NFT reduces the threshold of investors' participation amount, there is the possibility of feeding the NFT ecology, which is an imaginative development direction.

However, some more rational investors believe that this is a "Dolly" strategy, which transfers the investment risk to more individual or retail investors.According to this view, the mode of "NFT is the token" is too magical. In the fragmentation of NFT, the integrity of ownership and the effectiveness of decision-making mechanism still have enormous problems. The value bubble of NFT will be enlarged again.

On the other hand, although the number of fragmented NFT projects is increasing recently, it is very different from the project "issuing currency" in the ordinary sense in terms of publicity, operation and promotion. After replacing ft with NFT, even the issuer has virtually avoided many risks, which are undoubtedly turned to market investors.

This concern is not unreasonable. The mainstream view of the industry believes that the concepts of nftfi and gamefi are one of the main driving factors for this round of encryption market callback. The position of bitcoin "50000 US dollars" is just regarded as the "critical value" of the whole market. It is unpredictable whether BTC can break through the position of 50000 US dollars. In this case, the funds that can support the rise of the value of high NFT products are limited, and fragmented NFT is likely to become a shortcut for NFT whales to transfer risks and accelerate returns.

In addition, some analysts also discuss NFT fragments from different perspectives: if we emphasize the luxury attributes of these high-value NFTs, NFT fragments can be compared with "second-hand luxury", which still has the value of collection, trading and circulation.

It can be seen that although there have been NFT fragment projects before, the dog meme pictures of NFD have become the easiest way to spread and quickly obtain liquidity in the short term. NFD with meme attribute color further opens the door of NFT fragmented cognition to some extent.

The positive or negative impact of NFT fragmentation on the market continues. More people are "paying" for these fragments, and the data in the secondary market are constantly updated.


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