Time for a makeover? How DeFi and NFTs can bring about changes in the revenue system

The global decentralised finance market size was valued at $13.61 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 46.0% from 2023 to 2030 as per insights from Grand View Research, a market research platform. As decentralised finance (DeFi) ecosystem gains popularity, financial services are expected to become more user-friendly, accessible in addition to attracting a wider range of users.  “NFTs have had a minor resurgence lately majorly due to Decentraland launch on Apple Store, besides that major activity has been seen with NFT-based loyalty programs by Starbucks, Reddit and the likes. The emergence of DeFi 2.0 has been driven by implementation of NFT as a customer retention tool with interoperability, besides a better infrastructure,” Shivam Thakral, CEO, BuyUcoin, a digital asset exchange, told FE Blockchain.

According to reports by CoinMarketCap, a market research platform, the current DeFi crypto market capital stands at $46.07 billion with an increase of about 27.19% from May 18, 2023, – at the time of writing this story. This also includes a trading volume of about $2,056,446,389 with an increased rate of about 27.43%. Experts believe decentralised finance can boost the NFT ecosystem as it permits profit along with addressing concerns related to ownership of such coins. 

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But how can this collaboration of decentralised finance and NFTs create a makeover in the revenue or banking system. According to Binance, a cryptocurrency exchange, the continued growth of NFTs has contributed to the creation of alternative decentralised NFT marketplaces, one of which is Sudoswap. It is believed this will help in better-automated trades, allowing orders to be settled on-chain and within the pool rather than with an individual. According to Vikas Ahuja, CEO, Metaverk, the integration of DeFi principles has further enhanced the market’s growth by providing liquidity and monetisation opportunities. “NFTs have expanded the digital collectibles space, empowered creators to directly monetize their work, and facilitated speculative investor behaviour. Moreover, NFTs have cultural and social significance, supporting underrepresented artists and enabling expression in the digital realm. These factors combined have led to the rapid growth and success of the NFT market,” he explained. 

Some believe DeFi and NFTs offer individuals greater control over finances and unlock innovative financial opportunities. For example, NFTs have increased the digital collectibles space, allowed creators to monetise their work, among others. While naysayers argue that the traditional system has a greater market size, regulatory oversight and deep integration. Not to mention as the initial wave of undue excitement about Defi and crypto is over this is probably good for the industry to see what remains and what emerges from the ashes will probably have fundamental value. “It’s like the tech that survived the dot com bust; but it’s near impossible today to know what the survivors will look like. In all probability, rather than threatening traditional currency and banking systems, any innovations in defi that demonstrate true value will be folded into the traditional system,” Utkarsh Sinha, managing director, Bexley Advisors, a boutique investment bank firm, concluded.

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