HyperDAO’s AMA Global with BKFUND

HyperDAO held its 34th AMA Global session on November 13th at 20:00 (BJT). The AMA session this time features the Founder of BKFUND, Mr Charlie Xu. He will presenting the topic “An Alternate Take on NFT: A Broad Market, The Best Project yet to Come” Below is an overview of the session hosted.

November 13th 2020, 20:00 (BJT). The session started with Mr Charlie Xu’s introduction. He has been researching bitcoin and blockchain for 7 years ever since the year 2013. He founded BKFUND in 2017, and since then have spent two years investing in around 40, 50 excellent blockchain companies in the world. Currently, he is focusing his efforts on keeping up with the technological innovation and commercial application between NFT and the DeFi sector.

After the self introduction, The AMA session officially began. Mr Xu kicked off the AMA session by explaining the concept of NFTs and the types of NFTs that exist in the world. He said that there are 2 ways to classify an NFT. The first method is to classify it based on the attributes of the underlying asset. This method is divided into 3 categories: Real World based NFT Assets, Internet based NFTs Assets, and Encrypted based NFT Assets. The second method is to classify it based on the asset perspective. This can be done by further dividing each category into different sub categories. For example: Real World based NFT Assets can be further sub-categorized into real estate, vouchers and more. He proceeded to give a detailed elaboration for the meaning of each type of asset, and gave numerous examples for them as well. Furthermore, he also shared some points to take note of with the users. He said that “ even though some of the items have similar names, the actual difference between them is huge.”. He continued to elaborate on his point by talking about the difference between traditional and encrypted artwork.

Next, HyperDAO has invited Mr Xu to share his views on the difficulty and entry barrier for placing real world assets on chain, as well as his opinions on HyperDAO’s choice in assets, and to give suggestions on for more suitable assets. He said that real world asset based NFTs is a very promising industry due to its massive market space. However, the key problem in converting real world assets is that it requires a trustworthy third party to conduct the issuance and acceptance of the NFT. In order for everyone to understand better, he used real estate as an example to convey his meaning. Compared to placing real estates on chain, Mr Xu thinks that using luxury NFT items on chain is a much better idea. This is because most luxury items manufacturers are big manufacturers with well-known brands and great reputations, so users will naturally have a greater sense of trust with them. Mr Xu also suggested that HyperDAO try converting cheaper valued items such as concert tickets to place them on chain. This is because some high end concerts will have their own special features such as limited VIP seatings, limited resale price and number of resales. These are difficult to achieve in traditional ticketing assets, but with tokenization, they can be achieved by going through the NFT smart contract’s programmability.

Next, Mr Xu shared his views on the concept of crypto derivatives and the direction users are taking with it.He said that crypto derivatives is actually very promising because the DeFi market has been growing rapidly, its TVL (Total Value Locked) increasing by 20 times, growing from 600 million to 12 billion USD. The number of users in the DeFi market has increased tenfold, from 80,000 to 800,000 as well. Following that, Mr Xu also taught everyone how to increase the fund’s utilization rate. He said the most effective way to do that is to return the locked assets within the smart contract to the user in the form of a certificate. The user can then take this certificate to withdraw funds from the contract when it expires, or mortgage this voucher to other DeFi smart contracts for other purposes. Finally, he shared a few DeFi project’s mechanisms with everyone present such as Core’s Swap fund pool contract as well as Compound and AAVE’s lending market.

When asked about the layout and direction of the NFT market, Mr Xu said that the current NFT industry can be divided into 5 categories, being: Entry Category, NFT Asset Category, Trading Platforms, Application Tools, and Technology Development Platform. He said that from a quantitative point of view, the speed of NFT assets is developing too rapidly. There are now tens of thousands types of NFT assets, each type of asset numbering in the thousands, but in fact what they lack the most is the basic protocol layer such as Uniswap, Curve, and Balancer. However, the core of the NFT basic protocol layer is not responsible for handling transactions, but to provide composability and interoperability between NFT assets, such as combining several NFTs into a new NFT through certain rules, or taking a high-value NFT and break into 10,000 or 100,000 fragmented tokens. Only in this way can the use of NFT assets be fully stimulated, thereby enhancing the value of the entire industry.

Finally, before the AMA session is concluded, Mr Xu parted everyone with some words of wisdom. He said that : “The NFT industry is still in its early stage, similar to how the DeFi industry was in 2018, so you must not be too anxious to participate in this industry, watch more and act less, and don’t just blindly invest in the next big NFT asset just because of fomo. The most entertaining NFT game, the most valuable NFT protocol layer project, and the best NFT tool have not appeared until now. It is estimated that it will take two to three years before there will be another Uniswap.”

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