The platform allows users to sell Ergo’s NFTs – an important development in the growing DeFi movement – securely and easily.
Non-fungible tokens, or NFTs, aren’t a new development, but with the rise of the DeFi space they are gaining significance and finding new use cases.
NFTs are indivisible unique or limited-edition tokens that can be used to represent physical or digital items: anything from a house or car to a piece of digital art, a series of images, an in-game item or other collectible. It’s already a booming sector for blockchain, and one that’s forecast to grow rapidly in the coming years.
Ergo’s NFTs take a different approach to conventional non-fungible tokens on platforms like Ethereum. Like so many areas of the Ergo ecosystem, the extended-UTXO model offers benefits and entirely new use cases.
New dapp comes thanks to huge support of one of our anon developers, anon_real, who pioneered a user-friendly interface that makes it easy to form joint spending groups that require a quorum of signatories to make a transaction. Auction House enables users to sell NFTs securely and easily, auctioning them to the highest bidder.
Users need to run a full node to connect to the marketplace, but access via Yoroi will be possible in due course.
The ability to sell NFTs has lots of applications, both in its immediate form and in future developments.
Firstly, the NFT marketplace provides liquidity for a market that is typically illiquid. The physical art market, for example, is difficult to access for various reasons. That means it’s very difficult to value a painting; something is worth what someone will pay for it, and if there are only a few people who can bid, price discovery is inefficient. Tokenising the painting (or a digital image) and selling it securely online opens the process up to a global market of participants.
This can be combined with the ability to buy and sell NFTs using a conventional DEX. An artist might initially sell their work at auction to realise the highest price, but the new owner can then trade it on the secondary market – a useful feature if the artist subsequently becomes famous.
These two types of marketplace can also be used for the initial and subsequent distribution of governance tokens. A new DeFi initiative might mint, say, 100 NFTs, each representing a 1% vote in the project and conferring 1% of the platform revenues to the holder. These can be sold at auction for the initial distribution. If the owners ever need or want to sell their stake in the project, they can do so on an efficient and global market.
There are lots of other potential use cases for NFTs and their marketplaces. Many platforms integrate interesting and valuable features, such as the ability for the original creators of NFTs (e.g. artists) to receive revenues every time their work is sold in the future – something practically impossible in the physical world.