Before we start, let’s quickly go over the concept of the NFT. NFT stands for a non-fungible token, a special type of the non-mutually interchangeable cryptographic token. One of the most notable examples of NFT within the cryptocurrency space was Ethereum-based blockchain game CryptoKitties. Users could purchase and breed various virtual cats and every single cat had unique features, making them one of a kind.
NFTs have recently generated a lot of publicity due to some large-scale announcements within tech and cryptocurrency industries. One of those announcements was Jack Dorcey’s (CEO and co-founder of Twitter) decision to sell his first tweet in the form of NFT, which spiked a bidding war between the prospective investors with bids already reaching as high as $2.5 million and continuing to grow.
The second event, which generated a lot of buzz, was Injective Protocol’s purchase of Banksy’s Morons (White) painting. After the purchase, the painting was burnt and issued as an NFT. The reason for burning the physical copy was the fact that it could prevent the NFT from having value due to the existence of a tangible anchor. Thus, by eliminating the physical version of the painting, owning it would only be possible via purchasing the NFT.
The problem, however, is the fact that NFTs are currently bound to a single person, which goes against the general principle of decentralization. In addition, many people may lack the funds to purchase the NFTs as they could be quite expensive. Here is where APYSwap’s tokenized vaults become essential. Since the ownership of the vault can be split between multiple agents, it allows to tokenize the NFTs by trading the vault shares, instead of the NFT itself. Therefore, it enables joint ownership of the NFTs. Users may purchase as many shares as they like, making the purchase of the NFT significantly less expensive, while also splitting the ownership between different community members.
This idea is similar to the fractional ownership of art, which is an already existing use case in the world of arts, enabling exactly what the name stands for — the ownership of certain pieces of art by multiple users. Thus, by owning NFT’s share, an investor is able to enter the secondary retail market, where he can multiply his investment. This concept is completely in line with the DeFi’s values and we are very excited to bring it to our community. By the end of March, we plan to launch this concept’s demo version and purchase some NFT to split its ownership between our community members. Together we can bring a complete decentralization to the cryptocurrency space!