Thread by @gmoneyNFT

1/ I fell into the NFT space by accident. I was on twitter and I saw someone tweet about a @CryptoKitties shard that would trade as $LICK on @NIFTEXdotcom and how it was going to 3x real quick bc it was so undervalued.

#30daysofnft

2/ After some quick DD(which admittedly wasn't much), I decided to put some eth in at a 50 eth valuation. Was planning on being out within the week with some healthy profits. That however didn't turn out to be the case.

3/ $LICK quickly traded down 50%, and if I tried to get out, I would've slammed it lower. The cool thing about the shards on @NIFTEXdotcom is that you can offer a shotgun buyout, so either I could buy everyone out at a price, or they could buy me out at that price.

4/ I decided if I got my money back, I'd be happy to be bought out, but if it was really undervalued I could flip it for a few extra dozen ETH, so I offered 52.5 ETH, when ETH was at $477, or $25k USD. Nobody counterclaimed, so 2 weeks later I unsharded the kitty.

5/ So now I have this cat, and I have no idea what to do with it. I saw it had some sort of value, as it was a collectible, and a founder, so that must make it valuable. And outside of selling it on @opensea, I had no idea what it was worth.

6/ I then listed it as collateral on @nftfi. Honestly I had no idea what I was going to get for an offer. Within a week or 2, someone offered me a 35 ETH loan, and we negotiated to 25k DAI, which was the USD equivalent at the time.

7/ I turned around and went long ETH with that loan, keeping both the kitty, and a long ETH position. I was lucky that someone was willing to offer me my original cost, so my best guess is that the kitty is worth at least $40k DAI.

8/ I wanted to share this story bc I think it gets to the essence of how blockchain will change the world. I had the same exact thought the first time I logged in to @AaveAave.

If I ever wanted to get a loan on an item in the past, I'd have to go to a local pawn shop.

9/ I'd have to hope they have enough knowledge to value my item and have a market for it. But bc of the global nature of the crypto space, anybody with any knowledge to value my item, can make a market. They've become the expert. They have the opportunity to make money off it.

10/ And they're willing to make the loan bc they see the value. They could either keep it at that price, or think they have enough of a cushion so that they could sell it and recover the loan amount, much like banks do with mortgages on property.

11/ In a tweet, @hasufl asked what the guarantee is that they could liquidate the cat for 25k. And there isn't any. But much like the put sellers in liquid markets do, I'd have to assume he factored that into the price he was willing to loan me.

12/ As the world goes more digital, and digital ownership rights are cemented, stories like mine will be happening with increased frequency.

What happens if you can get a loan for ANY asset you own, and not just your largest ones? What does that do for capital efficiency?