Piggylet is an NFT-backed DeFi protocol built with a vision to be the complete NFT-backed DeFi. Why does the NFT market need this solution? What role does the network effect play in a seamless NFT-backed DeFi experience? It is the medium post that explains all these questions. Welcome to Piggylet’s mission, vision, and role of the network effect.
The Mission
To understand why NFT financing is mandatory we need to answer; what is the main difference between web2 and web3. The answer to this question is in a beautiful TEDx Talks video by Roham Gharegozlou, which also inspired Piggylet. He explains in the talk:
We have generations of people billions worldwide who think of themselves as owners but are in fact renters… It is impossible for you as the user that you own and paid for from one kingdom to the next without permission from the rulers.
-Roham Gharegozlou
When we look at the subject from this perspective web2 is like feudalism. We cannot own the land but only work for the landlords. With the journey that starts with Satoshi Nakamoto, people truly own digital goods. It is how web3 starts to find meaning. Web3 liberates us in the digital world.
Financing starts when you truly own something. You should be able to evaluate your assets. In the real world, everything is non-fungible except stocks, money, and commodities. You can evaluate your real-world non-fungible assets since there are many banking solutions. With NFTs, this is not the case. In the NFT market, millions of dollars are locked in NFTs with no access to liquidity without selling. Crypto space offers limited opportunities to NFT assets. No platform provides the whole NFT-backed DeFi journey.
It is where Piggylet starts. Our mission is to be one of the milestones that contributes to true liberation in the digital world. And our mission is to make it happen with our products peer-to-peer lending&borrowing, liquidation marketplace, vaults, and fragments market to cover the whole NFT-backed DeFi journey.
Completing this mission is no easy task. To provide a seamless experience for such a platform needs to have a strong network effect. And it is important to understand how to build a true network.
Meaning of Network Effect
The simple definition of a network effect is what happens when products get more valuable as more people use them. So, more is good, right? We are going to explain that too. First, let’s go back to our roots. The network effect is not a new concept. Even though it is much more popular than ever before. We can go back to the 1900s and see examples of its core principles. For AT&T’s annual report in 1900, there is a reference to the core concept of the network effect;
A telephone without a connection at the other end of the line is not even a toy or a scientific instrument. It is one of the most useless things in the world. Its value depends on the connection with the other telephone and increases with the number of connections.
Telephones huh? I heard you say: ‘I am here for NFT-backed DeFi solutions.’ We will come to that. It is important to understand that the core idea is similar to a platform like Piggylet. The platform is useless when you use your NFT as collateral and look for loans if there are no lenders. The same happens when a lender comes to give a loan, but there are no borrowers. Like in the telephone example, borrowers and lenders need to connect with each other. A platform is just a tool for the network. And in our scenario, the tool plus the right network is Piggylet.
Building the Right Network
Let’s answer the question for the network effect, is more always good? Not really. To create a seamless experience, we need to create the right network.
When we check the NFT market, there are many NFTs. mentions that there are hundreds of millions of NFTs on the marketplace. Alex says that one day, the number of collections may exceed the number of Websites. The question is, can every NFT piece be financialized? We can check in the real world in that manner. Even though in the real world, most things are non-fungible, not all non-fungible things can be collateral for a loan. The same is the case for NFTs. Not every NFT piece has a healthy market dynamic, or a value to be financialized.
Because of that, not every NFT collection or project can be used as collateral on Piggylet. So more is not good. Selected NFTs to create a seamless experience for borrowers and lenders is the real deal.
To make Piggylet useful, we only need one atomic network. In our case, one NFT collection with a healthy market dynamic, and value. If holders use NFTs of the collection as collateral and the community has a trust to give these collateral loans, Piggylet starts to create value. And then, we can take this value, customize it, and bring other NFT collections. This idea is really well stated in the book, A Cold Start Problem by Andrew Chen:
The solution to the Cold Start Problem starts by understanding how to add a small group of the right people, at the same time, using the product in the right way. Getting this initial network off the ground is the key, and the key is the “atomic network”, the smallest, stable network from which all other networks can be built.
-Andrew Chen, A Cold Start Problem
In this manner, our approach is similar to Uber’s. Andrew Chen, says:
Each city was an individual network in Uber’s global network of networks that needed to be nurtured, protected, and grown.
-Andrew Chen, A Cold Start Problem
For Piggylet, each NFT collection is a network. Even though the value would be similar to our atomic network, we want to meet every NFT community to get their feedback to customize our products to give the best experience possible.
Changing for Good
In the early times, Piggylet was only a liquidity pool for bluechip NFTs where holders of these NFTs get instant loans. This idea changed since creating an atomic network is more suitable for a peer-to-peer approach.
For peer-to-peer lending&borrowing products, you only need one borrower and one lender to create value. So, with starting our MVP as peer-to-peer, we only need two people to create value. A Liquidity pool needs much more to be efficient.
In time liquidity pools become vaults to create new values for the platform. Vaults are necessary to cover the whole NFT-backed DeFi Journey. Because, for peer-to-peer lending&borrowing, one lender can benefit from ’n’ borrowers. We need to create a vice-versa experience. So in vaults, one borrower can benefit from ’n’ lenders.
It is important to make NFTs as liquid as possible to make a seamless experience for every user. It is why we also create a liquidation marketplace and fragments market that make NFTs more liquid.
From a liquidity pool idea, Piggylet is grown to be a full-packed NFT-backed DeFi experience with its products, peer-to-peer lending&borrowing, liquidation marketplace, vaults, and fragments market.
Piggylads, a Utility-Enabler Community NFT
A useful platform may attract people, but the real reason to stay is the other people who use the platform as well. We have a reference that is now a part of our lives, Instagram. Early users of Instagram used the app for its features. It has many tools to make your photo perfect. Users may use Instagram and share it on other social media platforms. But they choose to stay in the app.
Instagram was built with a network from day one. It had user profiles, a feed, friend requests, invitations, and many other features of a modern social product.
-Andrew Chen, A Cold Start Problem
Instagram achieved that by creating a network, a community people can interact with.
The networks are one of the reasons why NFTs are valuable. Many NFTs with a strong community even in today’s market show a strong presence. So while creating a strong tool for NFT-backed Defi with Piggylet, we also want to create a strong community with Piggylads.
We are going to also reward our Piggylads holders by giving them many utilities to use on Piggylet. So there is always a good reason to own a Piggylads and join our community. Maybe own a Piggylads just for the community!
You may come for the tool and stay for the network or
You may come for the network and stay for the tool!
Piggylads are the representation of our community and web3 identity. Because whom do you borrow from or whom do you lend? A friend? Close but no. From a lad, a Piggylad!
-Piggylet Team
Piggylads utilities and much more information about; why we are releasing an NFT collection and our vision will be detailed in the next Medium posts. So be in touch!
The Vision
In the future, NFTs will be completely integrated into our daily lives. NFTs started as art pieces, but the technology holds more than being an art aspect. NFTs can be used to prove ownership of even real-life assets.
By following our mission, creating a strong network, listening to the right people, and changing for good, Piggylet will be able to reach its vision.
The vision of Piggylet is to become one of the pioneers of NFT-backed DeFi, where the ‘realverse’ and ‘metaverse’ meet.
Thanks for being here to read about the next era of NFT-backed financial instruments. Follow us on Twitter and Medium. You may also subscribe with your email on Piggylet.com to never miss news and updates on our products and projects. Always hodl and buidl, see you soon lads’n’lasses!
Website: https://piggylet.com
Twitter: https://twitter.com/piggyletdefi