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Before we dive into NFTs, let’s first define exactly what DeFi means. DeFi provides a blockchain-based way to access a range of financial services. These include borrowing, saving, trading, providing liquidity, and more. With DeFi, it is easy to stack DeFi services together and create new innovative products.
One of the key features of DeFi is the absence of intermediaries. Different DApps and services facilitate this process, but users are still directly connected to other parties who want to transact, borrow, or do any other activity with them.
Bringing these assets on-chain as virtual tokens helps bring the benefits of decentralization we see in DeFi. The DeFi world offers a solution with a transparent and verifiable way to interact with others. Let’s look at an example.
The traditional emission permit market operates through brokers, exchanges and over-the-counter transactions. Each permit allows the holder to pollute a certain amount, and the remaining allocated permits can be sold to other entities. The blockchain system used to sell these products will create a transparent marketplace that will facilitate buyers and sellers to find the best deals. Since each pollution permit is unique, they provide a solid use case for tokenizing NFTs.
