Why NFTs not DeFi brought Ethereum to the Mainstream

You can barely visit an online space without reading about NFTs. NFTs represent provable ownership rights for scarce digital art, and they are taking the world by storm. Celebrities are minting their own NFTs, friends shill their projects left and right (fewer pixels pls), and new platforms are announced daily. Some of my friends who had no interest in crypto are now asking me, “Hey, how do you feel about NFTs?” They never once asked about DeFi. Why are NFTs more accessible than the world of DeFi for the regular user?

These are my thoughts:

“Everything you don’t understand about money combined with everything you don’t understand about computers.”

- John Oliver referring to Bitcoin and cryptocurrencies.

But we all appreciate art. NFT Art offers many things — a way for artists to monetize their work, a method for crypto whales (and eggs) to reward new artists for joining the space, and a new form for creating art itself. Beeple’s $69 million marketing stunt validated NFTs in the detrimentally exclusive fine art world. Now, the unelected prophets of our time, capital-C Celebrities, have begun praising NFT projects and launching their own platforms. Most recent is Tom Brady’s Autograph, a platform that aims to host digital collectibles in sports, entertainment, fashion, and pop culture.

Words from Andreas Freund came to mind, “As exciting as DeFi is, the tethering of use cases into regulatory frameworks that are not designed for seamless user experiences does not lend itself to rapid blockchain mass adoption.” In his visionary article, Freund predicted that brand economies would be the catalyst for users on the peripheral to join in on the blockchain space. He wasn’t too far off. Tools like Collab.Land make it easy to spring up tokenized communities that are more akin to deeply niche subreddits and IRC networks, compared to scrolling through mindless dribble on Facebook or Twitter.

NFTs provide an easy entry point, even with the high transaction fees. For wider society, DeFi is still too confusing. The whole world watched as r/wallstreetbets and its retail investor army battled it out with the legacy finance market. Yet a majority of us were on the sidelines, sharing memes, holding on to our coins, while rooting for the apes. The mainstream appeal of artistic NFTs over DeFi can be attributed to many things, including the simple fact that ease of use will always be more important than how novel a financial product is.

I went on a hunt to buy my first NFT. Not knowing where to start, I headed to Twitter and landed on @gmoney.eth’s thread where he explains why he spent 140ETH on a CryptoPunk. For Gmoney, adding the illustrious Ape Crypto Punk to his collection was comparable to adding a Rolex to a real-world watch collection. Interesting. Moments later, I ended up on the FlamingoDAO, a DAO that invests in NFTs — they paid USD 176,000 (140ETH) for a super-rare Crypto Punk. Wild. Somehow it brought the wackiness back to the Internet. As far as I can tell, there’s nothing wacky about yield farming.

While perusing a thread for exclusive NFT drops, I couldn’t help but think the Internet was feeling a bit more like home. For those of us who grew up on the Internet, in forums and IRCs, we hold on to the nostalgia of the wild, wacky, ASCII, sporadic, nonsensical beauty of the Internet. The interwebs that we fought our siblings for access to. For a long time, that environment as we knew it was long gone. The second we could fit mobile computers in our back pockets, target advertising followed us from tab to tab. Social media sites sold our attention to the highest bidder, and influencers shilled their barely relatable products at us. The beauty was gone. In recent years, I fell out of love with the Internet, which is why I joined ConsenSys, in an attempt to work towards reviving a p2p web experience. I hung out in pockets of subreddits and tried to read books to quell the pain.

Yet, the NFT craze brought the excitement back to the Internet. Someone sold a single white png for ~5ETH. The WWE launched Undertaker NFTs. It’s like all of the silly parts of childhood mixed with current pop culture are coming together and minting themselves on the blockchain. I joined a tokenized community where ~2,000 members talk about art, fashion, music, memes, and culture. I found a comment dating back to mid-December 2020 where a musician expressed a wish to have a music-based NFT platform. Someone replied with, “Working on something just for you.” The same account later posted, “Catalog is in beta. Check it out.” in March. Catalog is a platform to collect, trade, and listen to provably authentic works built on top of the Zora protocol. Artists receive 100% on their initial sale and also set a percentage fee upfront that they’ll receive on every resale. The Zora protocol was founded in May of 2020, establishing universal, perpetual media markets in ERC-721. I watched in real-time the fruits of compounded efforts and tireless iterations put into the Ethereum space over the years.

It’s just riveting.

Crypto marketers’ dreams are coming true. Ethereum-based applications call on the domain expertise of those outside of the crypto space to create sleek applications while focusing on widely relatable use cases. We’ve been praying for this day, the day to market refined products with blockchain running in the background. Even as the global searches for NFTs currently wane, there remains a tremendous opportunity to expand the NFT beyond stereotypical crypto-savvy individuals. The art industry is in the spotlight for NFTs right now, yet other industries are expected to follow suit. The gaming industry innately creates the perfect environment for the next NFT wave. Gaming can be one of the most important markets and already accounts for the largest number of sales of NFTs.

I read about NFTs being used to tokenize business assets as verifiable invoices and orders. I read about the fractionalization of NFTs. I thought about how someone in my position (millennial with student loan debt) would be more likely to invest in NFT funds to own land in Decentraland than owning land IRL.

I read about issues around authenticity verification issues and how Serto’s search tool planned to fix that. Platforms like Foundation and Zora are an easy sell, and a friend could get started in no time without reading 15 whitepapers. I read numerous articles, tweets, and tirades around NFTs torching the environment. Palm NFT Studio arose, introducing a 99% energy-efficient NFT sidechain. Checkmate, whataboutists. Go bark up another tree, haters.

I listened to a podcast featuring Foundation’s Head of Community, Lindsay Howard. She shares how she has over ten years of art curation experience, which undoubtedly brought a unique perspective to the Foundation app.

Foundation is a highly-curated NFT art platform that screens its artists through a prudent invite-only system. Foundation feels like a digital version of an NYC gallery, and it is by design. NFT shopping on Foundation is like going to a 200-year old family-run artisan gourmet Italian confectionery. In contrast, perusing art on OpenSea feels like searching for gold in a massive American supermarket.

Everything was moving so quickly. I wanted to find a way to get in. Read my next post, Buying NFTs on Foundation.

To the DeFi frontrunners: we need you. Please, keep iterating. You’re just as much a part of the Internet Renaissance as those of us minting, buying, and trading pixelated art. The adoption of any new technology requires a slow, deliberate transition. Only 1% of Ethereum addresses interact with DeFi protocols –hats off to you all, navigating through liquidation risk. Once we learn enough (and earn enough from our pixelated projects), we’ll be right there with you.

Content @ ConsenSys