- Paper 1 on Decentralised Finance (DeFi),
- Paper 2 on Decentralised Autonomous Organisations (DAOs)
- Paper 3 on Non-Fungible Tokens (NFTs) – the one you are about to download now;
- Paper 4 is a call to establish a new form of the regulatory sandbox.
NFT stands for “Non-Fungible Tokens”. Although the concept of fungible versus non-fungible assets is not new, the digitisation (or tokenisation) of these assets has been an emergent concept through the use of blockchain that might be novel to policymakers. In short, a fungible asset is an asset of such nature that one part or quantity may be replaced by another part or quantity in paying a debt or settling an account. Non-fungible assets do not meet this definition.To contextualise, it can be stated that NFTs are characterised by the following elements:
- Uniqueness: it is associated univocally to a user or to a virtual wallet;·
- Indivisibility: it cannot be directly fractionated (though indirect fractionalisation is possible, e.g., F-NFTs);
- Non-fungibility: it’s underlying asset is not interchangeable.
Although the emergence of NFTs has been through art and collectables, the application of NFTs does not end there. In this report, we will review the most popular applications, going beyond digital collectables and art and exploring how each use case differs from the others. We will also touch upon more specific applications, namely fractional NFTs, or F-NFTs. Feedback from the industry is welcomed.
Report co-authors: Alireza Siadat (Annerton), Axel von Goldbeck (DWF Law), Dimitrios Psarrakis (XReg Consulting), Donna Redel (Fordham University), Guido Schmitz-Krummacher (Lisk Foundation), Ismael Arribas (KUNFUD), Jan Klesla (Blockchain Republic Institute), Jean-Christophe Mathonet (FeenPOP), Joshua Ellul (Malta Digital Innovation Authority), Lorena Stanescu (Stanescu and Partners), Merav Ozair (Rutgers Business School), Nathan Vandy (Blockchain Helix), Nina-Luisa Siedler (DWF Law), Synthia Bastron (Lisk Foundation), Tom Jansson (IOTA Foundation).