NFTs take on DeFi? Nonfungible tokens push to be the next crypto craze

Following DeFi's footsteps, projects in the NFT world have also begun issuing governance tokens, a trend that may help the industry gain traction as it did for DeFi in the liquidity space.

"There is more hype around NFTs right now. To some extent it's an extension of the DeFi excitement. We have seen with DeFi that once a trend starts it creates a snowball effect. Compound started the governance token one and others were almost forced to follow. Now that Rarible has started this on the NFT marketplace side, other marketplaces may feel forced to distribute their own tokens as well."How do NFTs work?

Unlike most tokens, NFTs are indivisible, meaning that it is not possible to send a fraction of an NFT token like it is to send a fraction of a Bitcoin.

NFTs can be used to represent a variety of assets, such as virtual collectibles, in-game items, digital artwork, event tickets, real estate and much more.

NFTs not only improve the game experience itself, making it more tangible and rewarding, but also create a new economy within games, allowing the players to earn actual money from their time spent in-game and the game developers to create new incentive systems for their games.

While there are several popular blockchain-based games, many projects also leverage NFTs to provide infrastructure services for gamers, game developers and other participants of the industry.

"We've only just started to see the effect that blockchain markets can have within games, and we expect NFTs to unlock many more opportunities for value creation for game developers, publishers, and players alike. Putting assets on the blockchain, allowing players to trade them, and being able to prove their scarcity is a proven, effective way to build valuable economies at scale." Bringing collectibles to the virtual world.

Collectibles are currently the most popular application of NFTs in terms of sales volume, with nearly 40% of September's sales coming from collectible-related projects.

NFTs are becoming quite popular in sports - and not just in online games.

"Although there is a bit more engagement, there is not much ready for mainstream use in terms of UX/UI. Moreover, NFTs inherit all of the typical difficulties of a blockchain-utilizing project and some of the traditional industry challenges may cross over as well. For example, art and collectibles are not very liquid. Crypto art may face a similar challenge once the yield farming hype subsides."