The frenzy of NFT is in full swing. Dozens of new projects are launched every day, resulting in record volumes for most markets. The project that has received the most attention lately is Loot. Introduction to its ecosystem.
Some claim that Loot is the first of its kind, while others believe that similar projects already exist. Anyway, in the past few days, Loot seems to have grabbed everyone’s attention. I tried diving into the project briefly over the weekend. But I soon realized I could only scratch the surface. The project for me is just an abstraction. But I do have some ideas about how looting can be used in a future financial industry.
Here’s a high-level overview of what’s in it and my thoughts on it.
What is Project Loot?
Loot is a non-fungible (NFT) token that contains only text. No kidding, it’s a list of adventurous items in the text. When you purchase a stolen NFT, you will receive a number of items as text. Below you can see an example of the so-called loot bag:
How were these loot bags distributed? inventor, Dom HoffmannIt was distributed free of charge at the end of August. One only had to pay the transaction fee for its instrument. However, there were no other details or information about her. Also not a Web3 app (at least initially). As a little side note for anyone interested in money only: the current minimum price is 13.5 Ether (ETH)!
How can a text-only NFT value be worth as 13.5 ether properties?!? I’m not even trying to explain the price here. However, I would like to give you my opinion after searching several Twitter threads and Discord chats. A Twitter user posted a very simple graphic showing the difference between regular NFTs and Loot Bag NFTs.
This is what I was so excited about…
Looting is a different thing. It’s something that hasn’t been done before.
It is a paradigm shift in the NFT space.
thread 👇 pic.twitter.com/vbaUF4uGNE
– tandavas.eth 👘 (tandavas) August 31, 2021
Regular or typical NFTs follow a top-down approach. Creators create something, like a profile picture of a cute monkey or cat, a game object, or digital art, like NFT. Then they build the ecosystem around the NFT to add more value to it. This incentivizes collectors, which increases scarcity and ultimately raises the price for people who feel marginalized and want it so badly. Basically, manufacturers sell a “finished product” like a home and then either improve the neighborhood or give you additional furniture.
However, the bottom-up approach to looting is different. The value of the NFT is not associated with any single entity or individual. To stay with the house analogy, the bags of loot in this case are bricks. Users can decide if they want to use it to build a house, bridge or playground.
This means that the value of the loot bag is determined by the builders who purchased the items or minted them and did something with them.
Are you also having trouble realizing exactly what you can build? Here are some examples of projects:
Loot ecosystem overview
Fortunately, the younger generation on our team politely pointed out to me that there were other projects out there as well. For example “More Loot” developed by Dom Hoffmann. There are also different versions, for example cLoot (Chinese Loot) and ELoot (Extended Loot). Please do not ask me what exactly these plagiarized copies are, but the younger generation in our office will be happy to enlighten you.
Now let’s imagine that the “new” financial system is built from the bottom up. Currently, financial markets (products) are built from top to bottom. Financial services companies create a product that aims to generate some value or generate revenue. In my opinion, a bottom-up financial system is already taking shape. Look at the DeFi sector and the way the ecosystem is evolving through the financial building blocks, or financial Lego bricks as it is known. You can buy tokens that have a very specific risk premium (profile) and mix and match them in your investment plan. Another potential use case is how a financial services provider (whether centralized or decentralized) can create a product (loot bags) with different risk premiums and the investor chooses whether he wants to include the entire bag or part of the risk premium (the attribute) that he just wants to buy what he likes .
I’m sure I forgot to mention several legal and compliance-related aspects in my rough presentation. And I couldn’t even think of the technical details. I may not have chosen the best analogy. But it helps me get a better picture of what all this leads to. One thing is very clear – things are moving forward in full force. Some sectors, such as the video game sector, are moving faster and more advanced. This is, of course, perfectly understandable, as highly regulated industries like finance face much greater hurdles before they are ready to do business in this new way – and with such a new concept.
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