For crypto followers, two things happened in 2020.
First, DeFi. Revolutionary as it is, these decentralized protocols didn’t receive the attention they deserved until CEXes began messing up: Ridiculously high listing fees, hacks, snowballing power, you name them all. Discontent (and anger, yes) fueled innovation, sparking a new movement within crypto. By mid-February 2021, there were over $43 billion of value locked by Ethereum-based DeFi dApps. That’s over 43X Year-to-date.
On-chain fees can be a proxy to gauge the level of activity. Here is a glimpse of what’s happening:
The Top 5 DeFi apps (UNI, SUSHI, COMP, ROOK, AAVE) now make more in daily fees than Bitcoin did in Q1 2020.
But yes, everything outside of BTC is a scam and a cash grab. 😂
I can *almost* understand the ETH skeptics, but not the decentralized application skeptics. pic.twitter.com/iHcSg0Sbge
— Ryan Selkis (@twobitidiot) February 15, 2021
Second, NFTs. Non-fungible tokens (NFTs)—call them Nifties. Here’s why: Each nifty is unique, has limited supply, and cannot be swapped for another (no two are the same). NFTs are different from Bitcoin or ETH–both of which are fungible. The first climactic era of smart contracting and ICOs pushed this innovation to unprecedented levels with the birth of CryptoKitties.
At its peak, each digital cat changed hands for outrageous amounts. The hysteria has since subsided, but we all know what it started. As of Feb 2021, over $273 million worth of NFTs has been swapped. Over time, the average NFT price is $51. However, last week, folks were buying NFTs at a ballpark of $2.2k.
2017: NFTs will never be valuable.
2018: NFTs will never be adopted.
2019: NFTs will never be liquid.2020: NFTs have early PMF.
2021: NFTs are very liquid.
2022: NFTs are the largest cryptoasset class.— Miami Jake Brukhman (@jbrukh) February 13, 2021
DeFi Gamification
But, here are some interesting statistics.
NFTs and DeFi are projected to grow by several folds in the coming years. Users are thirsty. GameStop, Robinhood, and related sagas proved that the traditional system is rigged against retailers.
On NFTs, the elimination of intermediaries effectively makes everyone an artist. Ethereum will provide provenance, and that’s a sufficient guarantee.
Outside of this, NFTs are gliding on its simplicity, Gamification demand, and Ethereum’s deeper foundation. To illustrate just how easy it is, Mike Shinoda of Linkin Park sold his first NFT piece for $10k.
#NFT update. Someone bid $10k USD on my piece (thanks!). And some folks are still confused about what this is. The short answer: an experiment. (more below)
— Mike Shinoda (@mikeshinoda) February 6, 2021
And it is only the beginning. NFT organic searches flipped DeFi’s:
Google search trends shows #NFT just flipped #DeFi 😳 pic.twitter.com/dJCE7qgmQI
— Spencer Noon (@spencernoon) February 20, 2021
Aavegotchi: A DeFi and NFT Merger
Aavegotchi is inspired by the two. Not to miss the best of both worlds, the platform merges interesting aspects of DeFi to power NFTs. As expected, their smart contracts are open source, available for public perusal—and critiquing, just like Aave.
A fitting description of Aavegotchi is “staked NFTs powered by DeFi.”
Here’s why:
Users stake Aavegotchis with interest-generating aTokens in the Aave DeFi protocol. As such, the number of aTokens held in every Aavegotchi escrow contract address continuously grows over time.
Every Aavegotchi complies with the Diamond, ERC-721, and ERC988 standards of Ethereum for easier composability and upgradability. It is the same development standard governing CryptoKitties crypto-collectibles and popular gaming platforms like Axie Infinity and Cryptovoxels.
As an independent DeFi protocol and the originator of the “Aavegotchi idea,” Aave is not heavily involved. However, it initiated the wave, and the project is a recipient of the Aave Ecosystem Grant.
It leads us to the second query: what is an aToken? Well, these are unique to the Aave protocol. Upon a user depositing supported assets, an aToken is minted, each pegged 1:1 to the underlying asset in the Aave platform. Once redeemed, it is burnt. Notable, each aToken can be freely traded, stored, shared, and transferred.
Aavegotchis are distinguishable because of three main defining attributes: collateral stake, traits, and wearables.
What makes Aavegotchi?
There are four main parts in Aavegotchi. All of them work to make the ecosystem valuable, pushing GHST prices higher.
They are:
- Portals: Aavegotchis are acquired through the Aavegotchi Portal. A user can opt to choose from any of the ten variants of Aavegotchis with unique features. Of the ten, only one Aavegotchi can be summoned by the portal. Depending on your preference, you’ll need to stake a given amount of collateral to get your hands on an Aavegotchi. For every piece, a user can trade the NFT in the open marketplace like OpenSea, Rarity, and more.
- Realm: This is the Aavegotchi multi-universe in 2D for their interaction and governance. Aavegotchi owners can purchase parcels called REALM and even launch dApps on them.
- GHST Tokens: This is the primary utility token of the Aavegotchi used to purchase portals, wearables, and other consumables. They will also be farmable through rarity farming, where the value of an Aavegotchi is directly dependable on its rarity. With the withdrawal of Aave, the sale of these tokens will fund the development of the project. Every purchase can be redeemed for an NFT collectible and destroyed upon use. Moreover, the project generates revenue from the sale of consumables, wearables, and fees from mini-games.
- DAO: The AavegotchiDAO manages funds from GHST distribution. After the mainnet launch, it will have more governance responsibilities. Users will be in control of game mechanics changes, collateral support, and more. In later stages, incentivized voting on the AavegotchiDAO will require ownership of the GHST tokens and an Aavegotchi collectible.
Team
So much about the project, but who are the brains behind the scene?
- The Chief Summoner and the Tech Lead is the CEO of PixelCraft Studios, going by the Twitter handle CoderDan.
- Nick Mudge (@mudgen) as CTO and Solidity Lead
- The Chief Coordinator and Product Lead is Jesse | gldnxross
- The Art Director and Technical Lead is @xavieriturralde
The founder of Aave, Stani Kulenchov, advises the project.
Check out this interview:
Aavegotchi (GHST) Tokenomics and Market
For investors looking to participate and earn a piece of the DeFi and NFT blend, the easier route is purchasing GHST tokens. The sole purpose is to ensure developers are not cash-strapped and continue to build.
According to Coingecko, 45,714,143 GHST are in circulation. There will be no ceiling of GHST minted from the bonding curve. Therefore, prices will fluctuate depending on market forces. Minting of GHST will be there as long as Ethereum exists. Buying from the bonding curve directly supports the Aavegotchi DAICO initiative.
Presently, 38,714,180 are available for trading, translating to a market cap of over $48.5 million from an average daily trading volume of $7.5 million.
On Feb 20, each is trading at $1.26. However, those who got in earlier upon launch on Sep 14 scooped each at $0.2. In USD terms, that’s a 6X ROI.
The most liquid GHST token market is Binance where it is paired with BUSD and ETH.
DeFi users can also buy the token from Uniswap V2. Presently, the main impediment is from the exorbitantly high Gas fees. Each swap may offset a trader over $20.
What Drives GHST Value?
From the above, it is only natural for value-seekers to ask questions. Where and how do I benefit from buying and HODLing GHST?
According to Aavegotchi, GHST will be redeemed for Aavegotchis in the mainnet. Within the metaverse, it is used to purchase wearables and consumables. Also, GHST incentives DAO voters. It can be earned from playing mini-games and in Rarity farming.
Everything cycles back to Aavegotchi NFTs. These collectibles accrue value from:
- Intrinsic value directly proportional to the value of aTokens staked.
- Fluctuating NFT Rarity value which is subjective. It depends on how rare the collectible’s traits and wearables are in the Realm.
Aavegotchi (GHST) Market Movers
These factors will catalyze GHST Prices in the future:
- The token commands a lower market cap relative to what it represents. At just $48 million from 38.7 million GHST in circulation, the project is undervalued. DeFi alone is worth over $43 billion in Ethereum alone.
- The NFT and DeFi markets are projected to be worth billions in the future; Aavegotchi could be the launching pad for the digital art with blockchain provenance and democratization revolution merging DeFi.
- Only Binance has picked out the project. With the increasing popularity of NFTs, the token may be listed in more exchanges. As Gas fees in Ethereum rise, these on-ramps are fitting and reliable alternatives.
- The public launch via the bonding curve attracted users despite KYC requirements. This reveals the demand levels and expectations from DeFi fans yearning for a gamified experience.
- Already the AavegotchiDAO Treasury has accumulated over 100k DAI from trading fee, beneficial in ensuring continuous development. Tap emission was increased from 100k to 150k DAI. The extra 50k DAI will be used to buy more GHST tokens from the bonding curve, a move that only pumps token prices higher.
- The GHST incentivization design is unique. Since developers have a continuous supply of funds, refinement and growth creates a virtuous cycle benefiting token holders.
- Supporters are confident Aavegotchi creators are building a functional solution ready to disrupt NFTs.
- DeFi is expanding, and so is Aave. The lending protocol recently approved BAL as collateral, meaning users can stake their aTokens to mint Aavegotchis, a net positive for GHST tokens. Technically, the growth of Aave indirectly pumps the Aavegotchi native currency.
- The address the high Gas fees in Ethereum, Aavegotchi migrated to Polygon (Matic network). The result is cheap/near-free transactions and costs when opening portals. All this goes to enhance the user experience and spur the growth of DeFi powered NFTs. Over $9 million worth of GHST has passed through the Ethereum-Matic Bridge.
- Demand for GHST might rise in the medium-term since the migration to Layer-2 (Polygon) is incentivized by Pixelcraft Studios—the builders of Aavegotchi, with $300k worth of tokens—GHST, MATIC, QUICK (QuickSwap native tokens), and LP tokens. GHST token holders earn by migrating.
- Aave’s aTokens have also been bridged to the Matic Network. A pool (GHST-USDC) was also created on QuickSwap. Highlighting the community’s level of interest, QuickSwap’s TVL now stands at over $17 million. The GHST pool has over $3 million in liquidity—this is liquidity ported over Uniswap operating from the primary layer.
12. Season One of Aavegotchi Rarity Farming is set for activation a few weeks after launching. Activation depends on when Chainlink oracles will be integrated.
13. Aavegotchi has partnered with Cometh, which launched on Feb 8. The aim is to collaborate more on limited-edition spaceships with cashback perpetuity in OpenSea, liquidity provision, and L2 gaming composability. Cometh and Aavegotchi spaceships will go on sale from Feb 24.
14. Taking advantage of low fees in Polygon, Arkane Wallet said it is building an NFT marketplace called the Aavegotchi Bazaar. One of the leading NFT marketplaces might also launch on L2 Polygon.
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