SECTION 3: CORE DEFINITIONS
Question: What is a Non-Fungible Token (NFT)?
Non-fungible tokens, or NFTs, are "one-of-a-kind" assets in the digital world that can be bought and sold.
Something that is fungible is interchangeable. Think of bitcoin, fiat currencies, and paper money as examples. Nobody looks at the printing number, we just exchange the monetary value. On the other hand, non-fungible items are not interchangeable with one another and have unique properties. The real world is full of non-fungible assets, such as the arts, the real estate market, cars, jewelry, and watches, to name a few.
Non-fungible tokens allow one to represent non-fungible assets on a blockchain. These become powerful as they allow for digital scarcity and provable ownership of unique, one-of-a-kind assets.
The main properties of non-fungible tokens are:
- Unicity: The code itself describes the unicity of the token. Digital art encodes pixels, text, and voice a set of unique 1s and 0s, tokenized in-game, with special features that make it unique.
- Traceable: Transactions are recorded on-chain from its creation to every exchange during its lifetime. We can verify its authenticity by going back to the chain to its inception. This is the most important property of a NFT.
- Rare: It should be scarce to ensure that its attraction remains high in the long term and the demand is always much higher than its supply.
- Indivisible: NFTs cannot be divided into smaller pieces.
- Programmability: Like all digital assets built on a smart contract, NFTs are programmable which allows for a lot of possibilities.
- Decentralized and digital. While in the real world, non-fungible assets are stored in centralized entities like freeports for art, here it is possible to truly own and control your own NFT.
For further reaching on NFT, please see https://ethereum.org/en/nft/
Question: What are Typical Use Cases?
NFTs are powerful in the sense that they can represent any asset, real or digital. We find use cases for:
- Collectibles: Think of sports cards or stamps (CryptoPunks, Avastars, Meme)
- Gaming: Think of trading card games, or battle games (Axie Infinity, CryptoKitties, Sorare)
- Art: To protect the copyright of artists and allow original artists to receive royalties during each financial transaction
- Virtual Assets: To build virtual worlds (Metaverse types) or hybrid worlds (such as our next immersive virtual world)
- Real-World Assets: Think of shoes, cars, or real assets. Virtualytics aims to provide this possibility to real asset owners, property developers and real estate agencies. As an original 3D design company, we guarantee the authenticity of our work to all clients. This way we lead the path of linking the real world to the virtual world.
- Identity: All personal information in an immutable digital wallet.
Question: What is NFTfi?
NFTfi stands for NFT financing, originally defined as a marketplace for NFT collateralized loans where users can put their NFT assets up as collateral for a loan or offer loans to other users on their non-fungible tokens. One can generalize the concept to be a mechanism that allows you to get loans by collateralizing your NFTs. This becomes possible as NFTs are recognized by early adopters as a valuable asset class.
On the Virtualytics NFT Marketplace, we will allow you to post your NFTs as collateral for a loan in our virtual world in a similar way we do in real life with real assets. This provides a benefit to hold NFTs with our platform.
For quantitative engineers, such as us, augmented/hybrid and metaverse worlds allow one to create new worlds with new financial laws. We can reprogram the whole (re)financing workflow in a more stable economic environment than we see in the real world. Automation is a big part to reduce the processing time and make it quicker to obtain a loan and compute the credit risk of each counterparty.
We will develop other risk mitigating tools. One of the early implementations will be to replace centralized counterparties (CCP) with decentralized counterparties (DCPs). The principle would be the same, in this case, DCPs must be sufficiently financially resilient so that they can withstand extreme but plausible events that would pose significant stress to the virtual world economics. Clearing members will have a high ratio of liquid assets.
These virtual worlds will see the creation of tools that would seem very complex and demanding to implement in the real-world such as:
- The automation of real-time financial balances including cash flow balances and financial risk metrics of each virtual entity to assess their credit risk in the community
- Creation of virtual corporations with a collection of taxes for the purposes to decrease the ecological impact of running these virtual worlds on servers. Taxes are collected to an ecological project wallet which will try to optimize the carbon footprint of the virtual world and assess the impact of other virtual worlds with the creation of standard metrics
- Creation of augmented balance sheets including ecological footprint from the activity of the entity
Question: What is Virtual Reality?
Virtual reality refers to the process of stimulating experiences that can be like or completely different from the real world. Users can view 3D assets with virtual reality headsets, or glasses.
Similar real worlds would correspond to parallel multiverses of our world with ultra-realistic 3D designs but with different places or places not even existing in the real world (which is exactly the purpose of our next virtual world that will be launched next year). Completely different real worlds would be closer to Metaverses such as Sim, Second life, Roblox, Minecraft, or Decentraland to name a few.
Virtual reality can be used by creating ultra-realistic 3D designs from scratch, such as we do at Virtualytics, by scanning real world places with 3D cameras as we do with our partner Matterport or recreating 3D low polygonal models for real-time interaction such as in video games.
Question: What is Augmented Reality?
Augmented reality (AR) allows one to enhance the real world with digital assets such as 3D elements, sounds, videos, or sensory stimuli through the use of your smartphone camera or glasses in the near future.
Augmented reality can be used for education purposes by interacting with documents, in real estate by visualizing additional metadata of the material and equipment, in shopping experience by guiding clients to find the right product or to test some outfits, in digital newspaper with augmented videos and articles once someone uses his smartphone.
Our partner Virtual Escape proposes several services with augmented reality. These different services will be deployed in our future virtual world for educational, entertainment, art, or business purposes.
Question: What is the Internet of Things (IoT)?
The internet of things is the internet of physical objects. They communicate to each other via sensors and through embedded software to process and exchange data remotely with other devices and systems using the internet or other telecommunication networks. It is generally leveraged by linking real world objects with metadata information available on networks so that it can have a powerful application linked with augmented reality.
The internet of things or objects can be applied to link the real world with metadata information so that different technologies communicate in real life.