Nick Emmons

NFT financialization is experiencing rapid growth, spurring innovation, liquidity, and usability across the broader crypto market. NFTs are expanding beyond collectibles as pioneering projects harness DeFi mechanics to amplify liquidity within these traditionally illiquid assets, giving rise to novel financial markets.

Each liquidity mechanism presents its own set of advantages and disadvantages, making certain mechanisms more suited for NFTs with particular attributes than others. The multifaceted nature of NFTs, stemming from their unique qualities, provenance, and underlying assets, introduces new complexities in sourcing and maintaining liquidity.

Many projects are leading the charge in maturing of NFTs, propelling the financialization sector into its next stage of evolution. The NFT-Fi movement expands participation, draws in additional capital, and offers opportunities for users to engage in novel use cases for their unique digital assets.

Let's explore the current state of the many verticals within the [NFT financialization](https://research.binance.com/en/analysis/financialization-of-nfts) space.

## NFT Financialization Market Map - July 2023
![NFT Financialization Map July 2023](//images.ctfassets.net/lhkcghnr8ql4/7fZDYq3lnbCJv9ok043iJc/8062b83672cec9b3810719558f678478/NFT_Financialization_Map_July_2023.jpg)

### Marketplaces
Marketplaces were the initial catalysts of the NFT revolution. Platforms like [Opensea](https://opensea.io/), [LooksRare](https://looksrare.org/), [Zora](https://zora.co/), [X2Y2](https://x2y2.io/), [Blur](https://blur.io/), and [Rarible](https://rarible.com/), platforms that empowered creators and collectors alike.

### Specialized Marketplaces
Specialized Marketplaces like [Nifty Gateway](https://www.niftygateway.com/), [SuperRare](https://superrare.com/), [Makersplace](https://makersplace.com/), [KnownOrigin](https://knownorigin.io/), [Async](https://async.art/), [Foundation](https://foundation.app/), [Catalog](https://beta.catalog.works/), [Parcel](https://parcel.so/), and [Sound](https://www.sound.xyz/) have redefined the landscape by focusing on specific NFT types.

### NFT Lending
NFT Lending, a rapidly expanding sector, unlocks the liquidity tied up in NFTs by allowing holders to collateralize their assets for loans. Many of these [NFT lending platforms](https://upshot.xyz/post/nft-lending-platforms) can be broken down into the following categories:

#### Peer-to-Pool Lending
Platforms such as [BendDAO](https://www.benddao.xyz/en/), [JPEG'd](https://jpegd.io/), [Pawnfi](https://pawnfi.com/), [PWN](https://pwn.xyz/), [Zharta](https://www.zharta.io/), and [Unlockd](https://www.unlockd.finance/) allow NFT owners to obtain loans from a liquidity pool instead of an individual.

#### Peer-to-Peer Lending
Platforms like [Arcade](https://www.arcade.xyz/), [NFTfi](https://nftfi.com/), and [X2Y2](https://x2y2.io/) are facilitating direct lending contracts between borrowers and lenders.

#### Three-Actor Vault Model
With a unique take on NFT lending, [Astaria](https://astaria.xyz/) is pioneering a three-actor vault model where strategists help manage vaults capitalized by external LPs.

For a closer look into these lending categories, read more in our in-depth [NFT lending](https://upshot.xyz/post/nft-lending-101) blog post.

### NFT Fractionalization
This approach, exemplified by [Szns](https://www.szns.io/), [Unicly](https://www.unic.ly/), [Furion](https://furion.io/), [Insrt Finance](https://www.insrt.finance/), [Nibbl](https://nibbl.xyz/), and [NFTX](https://nftx.io/), involves dividing a single NFT into smaller, ERC-20 tokens, allowing many people to own a single NFT.

### NFT AMMs
Pioneers like [sudoswap](https://sudoswap.xyz/#/), [Ditto](https://dittohq.xyz/), [leNFT](https://lenft.fi/), and [Caviar](https://www.caviar.sh/) are leading the charge in establishing Automated Market Makers (AMMs) for NFTs.

### Derivatives and Options Markets
Projects like [Hook Protocol](https://www.hook.xyz/), [Wasabi](https://www.wasabi.xyz/), [Revest Finance](https://revest.finance/), [Cally](https://www.cally.finance/), and [Putty](https://www.putty.finance/) offer NFT options contracts that give users the right to buy/sell an NFT at a predetermined price, creating unique avenues for risk management and speculation.

### NFT Perpetual Futures
Projects like [nftperp](https://nftperp.xyz/) and [Tribe3](https://tribe3.xyz/) offer contracts that allow traders to speculate on the long-term value of NFTs without an expiration date. This allows for hedging, diversification, and optimization of investment strategies.

### NFT Aggregators
Projects like [Skillet](https://www.skillet.ai/), [SnowGenesis](https://snowgenesis.com/collections/all), [Uniswap](https://uniswap.org/), [Blur](https://blur.io/), [DefiLlama](https://defillama.com/) ,and [AAA](https://www.aaa.is/) aggregate listings and liquidity from across numerous marketplaces.

### NFT Indexes
[Upshot](https://upshot.xyz/), [Fungify](https://fungify.it/), [Nealthy](https://www.nealthy.com/), [Bitwise](https://bitwiseinvestments.com/), and [Artacle](https://artacle.io/index/artcl) have curated NFT baskets that allow investors to track market segments, offering diversified exposure to the NFT landscape and reducing individual asset risk.

For a closer look into NFT indexes, read more in our in-depth [NFT Indexes](https://upshot.xyz/post/introduction-to-nft-index-funds) blog post.

Additionally, check out our post surrounding [Upshot's NFT Index Methodologies and initial indexes](https://www.businesswire.com/news/home/20230613897563/en/Upshot-Unveils-Novel-NFT-Index-Methodologies-Empowering-Developers-to-Build-New-Financial-Infrastructure-for-NFTs-and-Enhance-Market-Insights).

### Buy Now, Pay Later Solutions
The flexibility of payment schedules comes to the NFT world with platforms like [HighSwap](https://twitter.com/highswap), [Cyan](https://www.usecyan.com/), and [Zumer](https://www.zumer.xyz/).

### Portfolio Trackers
Allows users to stay informed about the value of their digital assets through projects like [Floor](https://www.floornfts.io/), [Flip](https://flip.xyz/art), [Zapper](https://zapper.xyz/), [Soho](https://www.soho.xyz/), [NettyWorth](https://nettyworth.io/), [MetaLink](https://metalink.com/), and [Recap](https://recap.io/en-US).

### Liquidity Scaling
Protocols like [Goblin Sax](https://www.goblinsax.xyz/), [Spice Finance](https://www.spicefi.xyz/), and [SPICYEST](https://spicyest.com/) are pioneering liquidity solutions that cater to the unique characteristics of NFTs.

### Trading Infrastructure
Projects like [Reservoir](https://www.reservoir.tools/) and [oSnipe](https://twitter.com/oSnipeNFT), providing critical infrastructure and tooling to build faster, efficient NFT trading applications.

### Price Discovery
Providing insights into the value of NFTs, projects like [Upshot](https://upshot.xyz/), [DeepNFTValue](https://www.deepnftvalue.com/), [Nabu](https://www.nabu.xyz/), [NFT Bank](https://nftbank.ai/), and [NFT Valuations](https://nftvaluations.com/), offer solutions for NFT appraisals, fostering market transparency and providing tools for NFT-fi builders.

## Additional Resources
The insights we've shared are drawn from our comprehensive Upshot NFT Financialization Map, which you can explore in more detail [here](https://docs.google.com/spreadsheets/d/1Wp_Ky1lZXCoh8ojpTRLMTQ-Z7TIen4fOgvrU9hSoapA/edit#gid=136769421). Please note, this map provides a snapshot as of July 2023. If there are any overlooked projects, don't hesitate to reach out.

If you found this market map valuable, make sure to follow [@UpshotHQ](https://twitter.com/UpshotHQ) and [@upshotintern](https://twitter.com/upshotintern) on Twitter for more insights into the dynamic world of NFT financialization.

Here's your guide to the NFT financialization market as of July 2023.

NFTs x DeFi: A Guide to the NFT Financialization Landscape

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