The current DeFi era and NFTs’ role in DeFi

28 Sep, 2020

In our previous article about NFTs, we already had an overview of this “seemingly” complex term. In today’s article, we are going to learn about its history and how NFTs can be used to help DeFi develop.

I. Historical development of NFTs

Everything has its own history. Understanding NFTs’ history may not make us rich immediately, but we should at least get a glimpse of how NFTs progressed, what it has achieved as well as will be achieving in the near future.

Early stage: Before the introduction of CryptoKitties

Before CryptoKitties appeared, the Bitcoin system witnessed the appearance of “colored coins”, that is, coins running on Bitcoin’s Blockchain with distinct characteristics. These can be considered as the first NFTs, namely the Rare Pepes (Pepes cards).

The first NFT project to be built on the Ethereum Blockchain was CryptoPunks, which consists of 10,000 virtual characters built on the ETH platform. Developed by Larva Labs, CryptoPunks also created their own trading market for users to buy, sell, or exchange using MetaMask wallet. Currently, CryptoPunks is still active, however, it is not as well-known as newer projects.

And it was the premise for the most famous NFT, which is CryptoKitties.

Inception stage: The introduction of CryptoKitties

CryptoKitties was the first project to bring NFT to Mainstream. Launched in 2017, CryptoKitties is a virtual cat game, in which you buy or create a virtual cat on ETH Blockchain (ERC721 format). Then, through a special algorithm created by the CryptoKitties team, players can crossbreed cats to create their own NFT, which is a special cat with a unique personality. Although many gamers have criticized that CryptoKitties is not really the same as video games, we think that CryptoKitties is a successful project.

At the same time, CryptoKitties is considered an example for other projects to follow, such as:

Construction stage: 2018-2020