The fundamental link between NFT and DeFi lies in the fact that both are built on
1. NFT = Unique Digital Ownership
The NFT proves ownership of a digital or physical asset (image, music, virtual land, ticket…).
The main feature: Non-fungibility → Each NFT is unique and cannot be exchanged for another like it.
2. DeFi = Decentralized Finance
DeFi builds a complete financial system without banks: lending, borrowing, trading, yield farming…
It relies on tradable assets (such as ERC-20 tokens).
3. Where do they meet? 🎯
🏦 Financing using NFTs (NFT Finance)
NFTs can be used as collateral to obtain a loan (like a traditional mortgage).
Example: You own a rare NFT, place it in a DeFi protocol, and take USDT as a loan.
💹 Fractionalization
A high-value NFT can be divided into smaller parts (ERC-20 tokens) so that many people can invest in it → Direct integration with DeFi markets.
🌐 Liquidity
NFTs are usually "illiquid" assets (hard to sell quickly). DeFi provides liquidity markets through automated market makers (AMMs) and NFT-specific pools.
🎟 Use in GameFi and Metaverse
In-game items (weapons, lands, characters) are issued as NFTs, but the game economy (lending, renting, trading) is managed through DeFi mechanisms.
The fundamental link:
NFTs = Unique Proof of Ownership
DeFi = Decentralized Financial Tools
➡️ When they meet, the NFT transforms from just a "digital image" into a financial asset that can be traded, mortgaged, and fractionalized.
