Life Ain’t Fungible
I have noticed that my colleagues at dGEN Network all seem to be collectors. I am also interested in Non-Fungible Tokens, but my portfolio lacks color and excitement. I am interested in all the other things that NFTs can be other than collectible pics. Nothing against the collectibles. These collectible projects can be beautiful art, and an entrance into a community. They can be a hot flip, or a few may even prove a store of value.
To me, they are just the tip of the berg though. These Avatar projects and collectible games act as a proof of concept for NFTs in general, which will be much much more. On the most recent Technical Roundup, either @CryptoDonAlt or @CryptoCred (I get the voices mixed up) described the collectible graphic NFTs as low hanging fruit. I agree with whichever of them said this. Now that we can see that non-fungible things can have efficient markets and be traded in a trust minimized and transparent way, next comes everything else.
The world is non-fungible. Think of everything you purchased today. Not only purchased but think of all the objects you interacted with. Is there one of these objects that is actually fungible? I am eating a non-fungible sandwich right now. I wouldn’t exchange this one with any other because it was made by me for me and to my direct specifications. The computer I am typing on is non-fungible now that it is full of my drivel and data. I wouldn’t trade my romantic partner for yours, although they may both be romantic partners. I wouldn’t trade my father for your father. It is hard to think of anything in real life being fungible. The things that are often evoked to explain fungibility are not even so in any literal sense.
People talk of dollars and bitcoin and specie. None of these are fungible at all. My bitcoin is either in a position on badger or curve, doing cooler shit than your BTC. Before this they came from somewhere that is a few hops away from a centralized exchange attached to my identity. These bitcoins of mine are wildly different than yours, or the ones in the tulip trust wallet, or any other coins of known origin. Our paper dollars are not fungible because I fold mine in to a bow tie, with Mr. Washington’s face staring at you from the knot of the tie. This is worth more to me than your boring dollar is. Coins are always dinged up a bit differently.
Fungibility is a purely theoretical idea. It may exist at a subatomic level, but I don’t know much about that. If string theory is to be believed than everything is made of the same one-dimensional loops, and while these may themselves be fungible, they vibrate in unique ways. All of our real-world economic transactions deal with non-fungibles. If we tokenize these, then we are talking real NFT use.
There is already a great deal of NFT use in DeFi and that is what gets me all hot and bothered. Bondbridge will give you a non-fungible bond. Uniswap v3 will give you a unique LP position. These Uniswap NFTs do have a bonus visual component as well. UMA has incredibly customizable liquidity mining incentives they can help protocols offer that are represented by NFTs. Many in the DeFi space have already realized that NFTs are integral to going froward.
Badger has done wonderful things with both graphic and non-graphic NFTs. Articles on all these projects and more are forthcoming from the dGens, I just wanted to take a second to contextualize NFTs in the broader world. Soon many in the financial space and popular culture will realize the awesome power of being able to tokenize non-fungible things. It is hardly an understatement to say that Digital trading of nonfungible physical goods will change the world. We have only talked about representing things as NFTs so far. You don’t have to think long before you realize that a lack of fungibility appears in all that we value. Our time is not fungible or replaceable.
Considering this, why not spend some time thinking of NFTs we can make together. Raoul Pal told Nathaniel Whittemore on his podcast last week, “Everything I think gets basically tokenized, and NFTs are that”. Next time someone derides you for spending so much on a cherubic penguin friend, remind them of this: This cute little picture is the humble predecessor of your grandkids diploma and passport.