# 2) NFT Service Status

**NFTs in the past**

Early history: Beginning with the Ethereum-based ‘Etheria’ project in 2015, NFTs gained significant traction with the launch of Lava Labs' “CryptoPunks” in 2017.

Market shaping: The NFT market grew rapidly in 2021, reaching an estimated $10.7 billion in transaction value in Q3, but trading volume and value have declined since 2022.

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**Current NFT Trends**

Diverse projects and companies: In 2023, the NFT ecosystem is becoming more active, with various NFT projects and companies emerging. Companies such as Ripple are entering the market and looking to capture NFT market share at home and abroad.

Expanding use cases: NFTs are being used in a variety of sectors, including certificates, gaming, mobile, sports, fashion, art, and more. Digital art, collectables, and game items are particularly prominent.

Technological advancements: NFT platforms and marketplaces are becoming more technologically advanced, and efforts are being made to improve user experience and enhance security.

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**New marketplaces are emerging**

Blue-chip marketplaces: In addition to the established OpenSea, new marketplaces such as Solana-based Magic Eden and LooksRare are emerging and increasing competition.

Traditional players are getting involved: Traditional auction houses such as Sotheby's and Christie's organise NFT auctions, accelerating the convergence of traditional and digital art markets.

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**Convergence of games and metaverses**

Play-to-Earn models: Models that allow players to monetise NFTs within games, such as Axie Infinity and The Sandbox, are gaining popularity.

Metaverse: Metaverse platforms like Decentraland are creating new economic ecosystems where NFTs are used to trade virtual real estate, items, and more.

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**Legal and regulatory**

Regulatory debate: The legal framework and regulation of NFTs are still developing globally. Various regions, including the US, Europe, and Asia, are discussing the definition and regulation of NFTs, which will likely lead to greater market stability and trust.

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**Environmental issues and sustainability**

Green blockchains: The adoption of greener blockchain technologies, such as Ethereum's transition to Proof of Stake (PoS), is underway, and efforts are ongoing to increase the sustainability of the NFT ecosystem.

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**Communities and DAOs**

Community-driven projects: Many NFT projects are community-driven through decentralised autonomous organisations (DAOs), giving participants greater power and responsibility.

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**Overall**

The recent NFT market has seen innovation and growth in various areas, with new business models emerging alongside technological advances. In the future, legal regulations, institutionalisation, and the adoption of eco-friendly technologies are expected to increase the market's maturity. NFTs will continue to play an essential role in the metaverse, gaming, art, and other fields, making them a key digital economy component.





**The state of De-Fi services**

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**Basic concepts and evolution**

Decentralised finance (De-Fi) leverages blockchain technology and smart contracts to enable financial transactions without centralised intermediaries. This reduces transaction costs and creates a financial environment where anyone can participate.

Ethereum is the main platform in the De-Fi ecosystem. It offers a wide range of financial services through smart contracts, and De-Fi's development relies heavily on Ethereum's smart contract capabilities.

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**Main types**

1\) Deposit/Lend: Services that allow users to deposit cryptocurrency and earn interest. Ex) Compound, Aave

2\) Asset management: Platforms that allow users to manage assets to generate revenue. ex) Yearn Finance

3\) Derivatives: Platforms for trading crypto-based derivatives. ex) Synthetix

4\) Insurance: Providing insurance services through smart contracts. ex) Nexus Mutual

5\) Exchanges: decentralised exchanges that allow cryptocurrencies to be traded without a centralised intermediary. ex) Uniswap, SushiSwap

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**Regulatory direction**

Interpretation of existing laws: There has been a debate on how to interpret and apply existing laws.

Amendments and new laws: New laws specific to De-Fi and amendments to existing laws are needed. This is an important step to ensure user protection and market stability.

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**Stablecoins**

A stablecoin is a cryptocurrency pegged to a fiat currency or other asset to reduce its price volatility such as Tether (USDT) and USD Coin (USDC).

Stablecoins play an essential role in the De-Fi ecosystem, providing transaction stability.

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**Utility tokens and governance**

1\) Utility tokens: They are tokens that perform various functions on De-Fi platforms, such as COMP by Compound and LINK by Chainlink.

2\) Governance tokens: They are okens that allow users to participate in major decisions on the platform.

Ex) Uniswap's UNI, Maker's MKR. Governance tokens allow users to vote on platform upgrades, fee structure changes, etc.

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**Multi-chain De-Fi**

Multichain De-Fi: It connects different blockchain networks to enhance interoperability and give users more choices.

Ex) Polkadot, Cosmos. It increases the scalability of De-Fi services and contributes to solving the problem of network congestion.

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**Interchain operations**

Interchain operations increase interoperability between different blockchains. They enable users to move and trade assets across different blockchain networks.

Ex) Interchain data transfer on Chainlink.

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**Security and auditing**

1\) Security: Security remains a significant challenge for De-Fi platforms. Regular code audits and security reviews are essential to prevent vulnerabilities in smart contracts.

2\) Auditing: Regular audits and reviews by third parties are important factors in increasing the credibility of De-Fi platforms. This allows users to verify the platform's safety.
