“The law of conservation of energy states that energy can neither be created nor destroyed - only converted from one form of energy to another.” - Law of Conservation of Energy

It’s impossible to not see this law in effect at all times around us IRL, but as I began to think about how trends in Web3 emerge and evolve, I naturally wondered how this timeless law plays a crucial role in the overall state of any market.

The idea of DeFi is simple, to democratize finance and bring the control back to the end user, no longer the corporations with little to no interest in their customers and who their systems affect in the long run.

But what of NFTs? There’s an insane amount of potential applications from on-chain verification of ownership, identity, artistic expression, financial speculation, etc. All of this energy moving in so many directions all at once, and with the rise of NFTfi (NFT Finance) there is a pursuit to further legitimize the nature of NFTs as more than just a way to speculate on a specific communities growth, creating far more liquid markets for collections and their collectors.

So, how do we transfer energy from the current NFT meta, to the new meta of financializing NFTs?

For over a year, nothing has excited me more than the intersection of DeFi and NFTs. Unfortunately, a number of NFTfi protocols have sunsetted as they’ve struggled immensely to find PMF (pour one up for our frens), but is this not a natural part of every market? Identifying what works and what doesn’t? DeFi’s earliest days (we’re still early) tell the same story, with protocols failing left, right, front, and center, from the smallest to the largest. While there’s a non-zero chance that NFTfi fails, NFT trading volume and the number of teams building products to further financialize NFTs has grown exponentially, again, telling the same story of DeFi in its earliest days. This tells me there is simply too much energy in NFTs for a world in which there is a massive liquidity unlock for once laughably illiquid NFTs doesn’t play out. Whether its a new collection launching, a new NFTfi protocol, RWA-products, UniV3 positions, etc… I’m not here to talk about what NFT tech can, and is doing, you already know that. See all time NFT trade volume:

TLDR;

NFTs just experienced their crypto 2017 moment (on every steroid imaginable).

For those not around in those days, the entire crypto market aside from Bitcoin and Ethereum were mostly air, Projects raising millions to billions on a simple white paper and a few tweets.

In the first-ever real bull-run for NFTs, this asset class managed to onboard more non-crypto participants than every other crypto bull market combined. What do you think happens when we run it back turbo, anon?

• Collections (Yuga Labs, Pudgy Penguins) raised millions of dollars in private rounds.

• Collections have been acquired (Pudgy Penguins, Crypto Punks, Meebits, 0N1 Force, etc).

• $60b in total trade volume with the vast majority coming in the last 3 years (as shown above), even with apparently 53% of this volume being wash, still, nearly $30b.

• Some of the biggest brands in the world from titans of fashion and automobiles have adopted NFTs as new forms of membership, distribution, marketing, and more.

The NFT Energy Thesis is alive and well.

Disclaimooor

This is me channeling my thoughts in written pieces that may summarize current market thoughts but will never be to endorse any project, or method mentioned nor give any financial advice. Blz do not fomo into anything you may read from myself or any anon(s) or pseudoanon(s). I also may or may not hold any of the tokens mentioned and/or contribute to any protocols/DAOs mentioned. Stay safe.

WAGMI,

0xOmnia