A new report reveals that the financialization of non-fungible tokens (NFTs) is rapidly progressing, with NFTs evolving in complexity and interactions, such as trading, lending, and borrowing, becoming more sophisticated. But many significant problems remain, from the reputational to the environmental.
The financialization of NFTs is continuing at a rapid pace, according to a new report from Reflexivity Research. The report, which does not intend to offer investment advice, outlines the growth of NFTs as financial products. It also offers a number of caveats.
NFTs: Pros and Cons
The popularity of NFTs has taken off. Especially with artists looking for ways to monetize assets. However, the report also highlights severe environmental consequences. With NFTs accounting for 30% of all Ethereum gas usage, these concerns are hard to dismiss and are likely to grow.
A number of market factors drive financialization. The report identifies the launch of BLEND as a recent step. BLEND (a portmanteau of the words “borrow” and ‘lend’) is an NFT loan platform. It allows users to take…