2023 has been a year of resurgence for the cryptocurrency landscape. After dealing with a significant downturn that saw the market lose a massive hunk of its valuation, coin prices have been doing quite well this year, and there is hope that the market could bounce back in all of its strength.
Just like the mainstream market itself has been on an upsurge, there has also been major growth in its affiliates - especially decentralized finance (DeFi) and non-fungible tokens (NFTs). Both fields were acutely affected when the market slumped last year, and they have also grown in tandem with the mainstream crypto space this year.
With DeFi, investors are promised a future where they will be able to access the financial tools they need without having to go through the hassle of dealing with centralized bodies. And--with NFTs--creators and asset owners have a new way to monetize their assets for the better. Essentially, it is a world in which everyone wins!
Still, one of the major challenges of the crypto space is that many of its affiliates continue to work in silos. There is little cohesion in the market, especially since different fields seem to be in competition. For the crypto space to really and truly fulfill its potential, industry stakeholders need to find a better way to grow together. And that means finding lines of convergence between themselves.
Pawnfi was founded by Wesley Kayne - a chartered accountant who’s licensed by the CFA. Wesley has significant experience in the finance industry, previously leading the Securities Lending arm of one of Asia’s largest banking institutions. He’s been investing in the crypto space since 2017, and he’s helped provide a myriad of solutions that help optimize liquidity in both traditional crypto and DeFi.
In this interview, we spoke to Wesley about how Pawnfi expects to improve these connections between both fledgling industries:
How does the NFT-DeFi integration benefit both industries?
Kayne: NFTs and DeFi represent two cornerstones of the rapidly evolving financial landscape. NFTs, with their unique identification codes, have remained somewhat isolated from traditional financial systems. At the same time, DeFi provides the infrastructure necessary to unleash value. This combination of NFT and DeFi can bring a synergistic, inevitable, and transformative change in the financial sector.
Pawnfi, rather than focusing exclusively on NFT liquidity, has ingeniously leveraged the strengths of both NFT and DeFi. It has accomplished this by converting non-fungible assets (NFTs) into ERC-20 standard tokens (P-Token), all while preserving the original NFT and its ownership rights. This allows NFTs to be utilized across diverse financial platforms such as DEX, CEX, and Automated Market Makers, just like ERC-20 tokens. NFT owners can thus tap into the inherent value of their assets without needing to sell them. Most crucially, this method democratizes access to NFTs, breaking down barriers for newcomers and broadening participation in the NFT market.
The distinct functions and potential of NFT and DeFi underscore their transformative power to reshape the financial landscape to foster greater inclusion, accessibility, and value creation.
How does Pawnfi expect to fit into the rise of Web3?
Kayne: At Pawnfi, our vision of Web3 entails building an open platform that not only shares value directly with users but also generates increased opportunities and benefits for all. We are steadfast in our commitment to enhancing our model and preparing for the Web3 era. Our primary goal is to onboard a more comprehensive community into NFT Finance. Seamless user experience (UX) is a potential challenge for all participants in the NFT finance field, and we at Pawnfi are addressing this by designing an intuitive interface laden with highly user-friendly features.
By building an interoperable infrastructure layer between NFT and DeFi, we facilitate easy integration of NFTs into broader DeFi networks, thereby enhancing the scale and diversity of value we can provide to our users. Moreover, our unique P-Token mechanism ensures maximum protection for NFT assets, offering NFT owners swift and straightforward access to liquidity and monetization channels. This also empowers individuals without NFTs to participate and profit. A significant benefit of this approach is the reduction of entry barriers in the NFT finance market.
In addition to improving UX and platform features, we are committed to offering tangible reward opportunities. We are eager to open our platform to the public soon, welcoming everyone to experience the advantages of our service.
What opportunities do you see in DeFi’s future as a standalone industry?
Kayne: Looking ahead, we foresee a future where the untapped value in DeFi is increasingly unlocked, leading to substantial improvements in the liquidity of non-standard assets, such as NFTs. The tokenization of digital assets allows for frictionless trading amongst users, and Pawnfi elevates this concept with its unique approach. By facilitating swaps between P-tokens and NFTs via its comprehensive financial system, Pawnfi bolsters NFT liquidity and generates potential income for users.
Moreover, DeFi carries the promise of expanding financial inclusion, a facet that can't be overstated. In today's world, countless individuals lack access to essential financial services, such as bank accounts or loans. DeFi has the potential to democratize these services, providing equitable access and enabling everyone to participate in financial activities. This represents a significant step towards a more inclusive financial landscape.
Many have questioned the viability of NFTs in the long run. How do you respond to this?
Kayne: The NFT marketplace has undergone substantial expansion in recent years, an evolution that cannot be overlooked. However, as the NFT industry matures, our vision at Pawnfi extends beyond seeing NFTs merely as an expanding sector; we anticipate NFTs emerging as integral elements within the broader financial ecosystem. The immense potential NFTs possess to redefine notions of value and ownership in this digital era is genuinely remarkable.
Our role at Pawnfi is not confined to being just another protocol in the ecosystem; we see ourselves as pioneers and engine of liquidity within the NFT realm. Our ambition stretches further to shape the future landscape of this space, offering an accessible, fluid, and inclusive platform for NFT finance. As the market continuously evolves, our commitment is to remain at the forefront, incessantly innovating and refining our approach to serve our users and the wider community optimally.
Conclusion
One of the most interesting parts about the overall crypto market is that facets of it can easily be intertwined to make each other better. Pawnfi provides a way for DeFi and NFTs - two major aspects of the crypto space - to finally grow and be more mutually beneficial, pushing the boundaries of the NFT Finance. And, as the market grows, collaborations between these market segments should only become more seamless.