The acronym NFTs refers to Non-Fungible-Tokens. NFTs represent unique assets with properties that are not replaceable. These tokens contrast with Fungible Tokens that can be easily interchanged with another equal or similar asset (e.g., a cryptocurrency).
NFTs became popularized with digital art projects like CryptoKitties (2017), CryptoPunks (2017), Bored Ape Yacht Club (2021), and the record-setting Beeple’s artwork Everydays (2021) that sold for 69 million dollars.
Tokens are the foundational units that enable DeFi. They can represent anything from a currency, deeds to a property, memberships, or certain rights (e.g., voting).
In DeFi, Tokens are typically issued, distributed, and managed with several deliberate properties to incentivize specific outcomes. These properties may include:
One example of a token distribution to incentivize the development of a project and establish a community may have a distribution similar to:
In this token distribution example, there is a strong focus on development and marketing. It is also assumed that the project will have a pre-launch sales to reward earlier proponents.