A Better Way to DeFi- NFY Finance Platform Full Review
Decentralized Finance (DeFi) has witnessed incredible growth in recent years, with over 1 000 DeFi platforms in existence today. And as the DeFi space continues to expand, a new approach to DeFi projects has emerged involving ERC-721 Non-Fungible Tokens (NFTs).
DeFi platforms have traditionally used ERC-20 tokens, but current advances in the DeFi space have seen the introduction of ERC-721 tokens. These are non-fungible tokens, which means that each token is unique, i.e., a unique token id is given to each token at minting.
Currently, ERC-721 tokens are mostly used as collectibles and haven’t found extensive use cases in the DeFi space. However, this is set to change with the introduction of NFY Finance – a DeFi platform seeking to utilize the full potential of Non-Fungible Tokens (NFTs) in the DeFi sector. This article will shed light on Non-Fungible Yearn (NFY) and how it will transform the DeFi sector by creating extensive use cases for ERC-721 tokens in the DeFi space.
Non-Fungible Yearn Finance Overview
Although ERC-20 tokens have been popularly preferred for staking on DeFi platforms, crypto experts have noticed that they congest the Ethereum network. This congestion is what has led the network to be slow and heightening transaction fees. So, how does that happen? The constant staking and un-staking funds in farming protocols interact with smart contracts increasing gas costs, making the network expensive for every user. Well, ERC-721 tokens is a solution to ERC-20 tokens’ shortcomings to prevent Ethereum network congestion.
Non-Fungible Yearn is a DeFi platform that leverages ERC-721 token, i.e., NFY tokens, to enable users to earn rewards via staking. Unlike other DeFi yield generating staking platforms, NFY Finance takes a different approach to DeFi staking by minting non-fungible tokens (NFTs). On the NFY Finance platform, users holding NFT tokens earn accrued interest or redeem the underlying tokens.
NFY Finance is essentially encouraging DeFi users to desist from un-staking their tokens once they’re done with a staking platform. Unstaking causes network congestion and consequently increases gas fees. Instead of unstaking, token stakers can seamlessly transfer the rights of the stake itself to a deserving party.
Rather than unstaking, NFY Finance supports the simple and cheap transfer of NFT tokens on its own trading platform. Using NFT tokens, NFY Finance eliminates network congestion and does away with expensive redeem transactions involving un-staking of tokens.
NFY Finance Key Features
NFY enables users to stake their various crypto holdings in multiple staking pools and earn NFY tokens in return. Unlike traditional DeFi staking platforms, which allow a user to earn staking yields based on the staked amount in their wallet, NFY employs a different approach. The platform’s staking process is the same as any other staking platform, but users’ wallet address is not linked to a stake.
Instead, NFY offers users’ ownership over the staked funds and the yield the stake bears. Once a user stakes on the NFY Finance platform, an NFT token is minted and stored in a specific user’s stake. This is achieved via referencing the user’s stake using a unique token ID and then sending the stake to his/her wallet address.
Currently, staking on the platform is done in two major pools, i.e., $NFYs and $NFY/ETH LP. The platform requires users, i.e., first-time stakeholders, to approve the staking smart contract before staking in each pool. This is done using the stake NFY and NFY/ETH LP buttons. After successful staking approval, users are then required to click on the aforementioned buttons for a second time to enable them to stake their tokens.
The $NFY staking pool is allocated 0.10% of the balance of the reward pool daily. This is based on the assumption that there are 6 500 blocks minted in a day. The $NFY/ETH LP staking pool is allocated 0.30% of the reward pool daily, split proportionally between stakers. This staking pool doesn’t offer an unstaking option once users have staked on the platform. The total reward pool is 60 000 $NFY.
While Finance discourages un-staking, users can still unstake their deposit from the platform, destroy the NFY, and return the stake funds. However, to discourage un-staking, NFY charges a 5% un-staking fee, sent to the user’s wallet address. The 5% charge then gets redistributed back into the reward pool, creating a self-sustaining system that encourages users to trade NFT.
NFY Finance locks a user’s NFY/ETH liquidity token in the platform forever. However, the platforms only lock the LP tokens and not their value. This is achieved by minting NFTs and integrating the value into the locked ERC-721 token.
NFY Trading Platform
The NFY trading platform allows users to trade their stakes. The trading platform doesn’t require users to sell their entire $NFY or $NFY/ETH LP stakes. Instead, users can trade any amount of their staked position.
While NFTs themselves are not intended to be sold, their makeup can be traded on the NFY Trading Platform. The platform charges 1% of the value of all trades as a transaction fee. The fee is split as follows: 0.90% reward pool, 0.05% community fund, and 0.05% dev fund
Final Thoughts – NFY Finance Full Review
Constant staking and un-staking on the Ethereum blockchain lead to higher transaction fees and slow confirmation times due to excessive congestion in the network. Non-Fungible Yearn seeks to eliminate the culture of unstaking with the introduction of ERC-721 tokens, i.e., NFT.
On the NFY platform, there is no need to un-stake your tokens if you don’t want to stake anymore. You’ll sell the NFT tokens or its portion at market price and keep the rest. Since all details are stored in the specific token, the value of the NFT is automatically updated, and a new one is minted for a new buyer. If a buyer already holds NFT tokens, the one purchased will be added to their portfolio.
Though still at initial stages, NFTS and ERC-721 tokens have endless potentials in the DeFi sector. This token is set to solve the shortcomings of ERC-20 tokens and make DeFi platforms sustainable and efficient. Watch out for an ERC-721 boom soon. Note that the NFY staking platform is already out, and the NFY trading platform is set to be launched by the end of November.
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