Could Chainlink’s next NFT gamble be a game changer for stablecoins?

The hype surrounding NFT is so compelling that major platforms like Ethereum and Solana cannot ignore it. Chainlink is no exception. Thanks to Oracle, it provides real-time data for smart contracts that make NFT trading easier.

However, Chainlink’s recent integration has breathed new life into NFT by doing the unthinkable.

Another chapter for the NFT?

Most of the time, NFTs are notorious for their illiquidity. For example, CryptoPunks, the largest collection of NFTs by both market capitalization and volume, usually have good demand and liquidity.

Either way, these illiquid assets can become more than just a static investment thanks to a new form of DeFi called non-fungible debt positions (NFDPs).

JPEG introduced a new way of securing NFTs by storing them in smart contracts. This process enables them to mint a synthetic stablecoin called PUSd.

Today, stablecoins are often viewed as the safest assets to invest in, as well as for DeFi solutions. So far, they have been supported by fiat, crypto currencies or work under smart contract conditions.

Adding NFTs to the collateral list could attract investors and limit their investments in these punks. While the PUSd stablecoin currently only works within the network, it could inspire a new form of stablecoin based on illiquid assets.

In order to rate NFT as a security, Chainlink has integrated into the network and will use price feeds.

Remember, even after an NFT mortgage, the owner will not lose ownership of their property. Instead, they will actually make money from it.

A little difficult

At the moment, the NFT is still seen as a bubble that can burst if the hype dies. The problem is that this situation occurs gradually.

In August, the total volume of NFTs traded reached $ 3.09 billion. The same number in September fell to $ 1.05 billion. In fact, trading volume is at a 3-month low this week.

Weekly NFT Trading Volume | Source: The Block

If these NFTs lose value at a later date, stablecoins could also collapse. Still, the market remains hopeful as unlike many previous stablecoin scams, NFT-backed coins will be safe. Especially since the collateral is the property that you own.

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Minh Anh

According to AMBCrypto

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