The NFT market is experiencing explosive growth, and the integration of DeFi has become a new trend.

NFT has recently attracted widespread follow in the Crypto Assets field. Data shows that the average selling price of NFT products was often below 50 dollars in 2019, while the daily average price exceeded 100 dollars in August-September 2020, indicating a significant rise in users’ willingness to pay for digital products, leading to a new round of growth in the NFT market.

NFT( Non-Fungible Tokens ) have the characteristics of being irreplaceable and indivisible, representing “uniqueness”. Unlike fungible tokens such as Bitcoin, NFTs are more like digital artworks, each one is unique. There are similar concepts in traditional finance; for example, one dollar can be exchanged, but an artwork like the “Mona Lisa” is irreplaceable.

Currently, Ethereum’s ERC-721 is the most popular NFT protocol. At the same time, other public chains such as Tezos’s TZIP-12 and Polkadot’s Unique module have also launched NFT development tools, attracting a large number of developers to join the NFT ecosystem. In 2020, the average daily transaction volume of NFT projects increased by about 105% year-on-year, demonstrating strong market demand.

Bitcoin and Ethereum are important platforms for the development of NFTs. In 2016, blockchain card games based on Bitcoin began to gain popularity, laying the foundation for NFT applications. In early 2018, CryptoKitties achieved great success on Ethereum, making Ethereum the preferred choice for NFT development. Subsequently, trading platforms such as OpenSea and Rarible became major entry points in the NFT field.

The ERC721 standard provides basic functions for NFTs, such as transfer, balance inquiry, and ownership. Each NFT is identified by a unique Token-ID in the contract. In addition to ERC721, various NFT protocols have emerged to meet different needs.

Currently, NFT products on mainstream public chains are mainly concentrated in the fields of decentralized games and digital art collections. From the Counterparty protocol in 2014 to the current Ethereum ecosystem, most belong to this type of application.

With the rise of DeFi, NFTs have begun to integrate with financial applications, resulting in a new type of product known as “GameFi.” These products not only have entertainment attributes but also introduce financial incentive mechanisms, primarily used for financial certificate rights confirmation and to enhance the utility value of NFTs.

For example, yinsure.finance is an NFT insurance project based on Ethereum. Users can generate NFT tokens (yNFT) based on their insurance policies, with each yNFT corresponding to a specific term and amount of the policy. These yNFTs can be freely traded on NFT platforms, with a trading volume of 5000 ETH in the first month.

As the number of users increases, the market’s demands for the security and efficiency of underlying platforms are also rising. Ethereum’s high Gas fees and security issues remain challenges faced by developers. Other PoS public chains like Tezos are also actively developing, with contract deployment volume rising nearly 70% in the third quarter of 2020.

Tezos is enriching its ecosystem through various infrastructures such as Harbinger and Kaiko price oracles, decentralized exchange Dexter, on-chain stablecoin USDtz, and tzBTC.

In the future, the trend of the integration of DeFi and NFT will become more apparent. As the value of NFT products increases, developers’ demand for security performance and efficiency will also grow. Public chains like Tezos, with high security, low energy consumption, and a rich integration environment, are expected to provide more support for innovative applications of NFT and DeFi.