Thread by @masonnystrom

The financialization of NFTs is rapidly evolving.

NFT liquidity protocols continue to gain traction and TVL as the overall NFT market unfolds.

Two popular liquidity models to date are 1) NFT Exchange/Pool Protocols & 2) Fractionalization Protocols

A Quick Thread👇🏻

Model 1: NFT Exchange LIquidity Pools like @NFTX_ & @NiftyMuseum are marketplaces/exchanges that enable users to deposit NFTs into pools in exchange for fungible tokens. Generally, tokens can be staked to earn yield on the pool of assets both on a DEX and within the protocol.

Model 2: Fractionalization protocols like @uniclyNFT & @fractional_art create vaults that enable collectors to break up/sell their NFTs into fractions that can be traded on a DEX.

Fractionalization protocols don't focus on tracking floor prices but rather single or collections.

To date, @NFTX_ vault stakers are starting to generate significant revenue from the protocol. As more NFTs enter the ecosystem, the potential for new vaults similarly becomes more enticing.

Since its summer launch, @Fractional has already facilitated over $1.5 billion in NFT volume (via its fungible fraction tokens).

As collectors with robust NFT portfolio's search for liquidity, Fractional offers a unique value proposition with signs of early success.

DeFi<>NFT infrastructure is in its infancy and will continue to evolve to support the rapid influx of new demand.

The financialization of NFTs has only begun.
messari.io/article/the-fi…