TOKENS & ASSETS

NFT (Non-Fungible Token)

Definition

NFTs are unique digital tokens that represent ownership of specific digital or physical items. Unlike fungible tokens, each NFT is distinct and cannot be exchanged on a one-to-one basis.

Example

💡 Example

An NFT might represent ownership of digital art, in-game items, or even real estate deeds on the blockchain.

Risks to Consider

⚠️ Risks

Illiquidity
Speculative bubbles
Storage dependencies

Related Terms

Non-fungible tokens explained with Blastoise and Charizard

“Non-fungibles” — don’t let yourself be fooled by the mushroom-evoking name, fungibility is an old concept that is finding a second wind nowadays. It’s mostly about collectibles and video games for now, but it will soon outgrow these industries. Indeed, the potential of non-fungibles tokens is much more significant than this: from official documents to titles of ownership, their use cases are diverse and numerous. Let’s start by establishing the basics about non-fungible tokens (NFTs from now on) thanks to Pokémon cards before we dive into their potential use cases and the future developments of the underlying technology.

Non-fungible tokens (NFTs): the weight and contribution of ascertainable history

Non-fungible tokens are attracting a lot of attention lately. On the one hand, the general public is scratching its head about the ever-rising records observed on flagship sales, now covered in the mainstream press1. On the other hand, artists still not initiated to blockchains realize the potential offered by disintermediation as well as the possibilities offered by the programmable nature of this new art form. In between, a diverse audience ranging from the casual collector to the seasoned speculator.

NFTfi: NFT meets DeFi, liquidity and leverage ensue

Decentralized finance has opened up a world of possibilities: a myriad of previously necessary intermediaries are now supernumerary. Nevertheless, it is intimidating because of its potential complexity and interdisciplinary. In addition to the obvious technical dimension, DeFi also invokes concepts from various disciplines: economics, social sciences, “memetics”, etc. Thus, for years now, NFTs have served as a gateway to the decentralized world, demonstrating the benefits of tokenization and disintermediation to a population still not very fond of DeFi.