Exclusive: Sorare is Issuing Cristiano Ronaldo Non-Fungible Tokens
Hello Defiers! Here’s what’s going in decentralized finance:
- Cristina Ronaldo is getting tokenized
- Liquidity dries up as rates climb on bZx
- MakerDAO community scrambles to prevent flash loan exploit
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Exclusive: Cristiano Ronaldo is Getting Tokenized
Sorare, a fantasy football game, entered a licensing agreement with Italian giant Juventus to issue scarce digital tokens representing the team’s players. Cristiano Ronaldo’s card is getting issued today.
Juventus joins other European clubs which have agreed to create digital collectibles based on their players via Sorare, including Atletico Madrid, Porto and AS Roma. There will be 111 Cristiano Ronaldo cards, which Sorare players can use to compete in fantasy soccer leagues and trade on secondary markets, according to a company statement shared with The Defiant.
The digital cards are issued under the Ethereum token standard ERC721, also known as non-fungible tokens, first introduced by CryptoKitties in 2017.
Image source: Sorare
Unlike ether, bitcoin and ERC20 tokens used in many dapps, NFTs aren’t interchangeable and have unique identifiers to represent specific virtual or physical objects. Their uniqueness can create scarcity and raise the token price. The card representing Olympique Lyonnais player Moussa Dembele, for example, recently sold for 9.68 ETH ($2.4 million).
Sorare is one of a growing number of applications using NFTs. These provably unique digital tokens lend themselves well to online gaming, as they can represent from collectible cards, to in-game items like weapons and skins. It might seem trivial, but the market for virtual stuff used for gaming is a huge, estimated to be worth $50 billion, or about half of the entire online gaming market.
The difference with traditional in-game items is that NFTs let players actually own these virtual objects and trade them in secondary markets outside of the games themselves. Cristiano Ronaldo card owners will be able to trade the NFT in marketplaces such as OpenSea, and potentially even use them as collateral to take out a loan in DeFi.
And NFTs —which can also be used to represent other scarce objects, from art to event tickets— are gaining steam. Average daily ERC721 transactions in the past month are at 12,000, or double the average for the same period last year, according to data compiled by Bloxy. NFT transactions even surpassed ERC20 transactions momentarily in November, as players rushed to buy tokens of another fantasy card game called GodsUnchained.
Image source: CoinMetrics
The NFT market is still small relative to ERC20s, though. About 40 ERC721 tokens are in active use daily, compared with 2,600 ERC20 tokens, and the number of ERC20 daily transfers is about 10 times higher than ERC721 transfers, according to Bloxy data.
Companies like Sorare, GodsUnchained and Decentraland, are betting that will change as activity on their platforms picks up. CryptoKitties though, the OG NFT, still dominates the market.
So This is What a Bank Run Looks Like on DeFi
Three days after bZx’s second attack, the protocol is still paused and users are waiting to close out trades and take out their money.
bZx @bzxHQ@DegenSpartan @ConsenSysCodefi Yes, it's a bank run. However, obviously there's nothing abnormal with the DAI, USDC, etc pools, so this is simply a function of panic.6:13 PM ∙ Feb 18, 2020
bZx founders said they’re committed to avoiding any losses for lenders but many didn’t want to stick around to find out if they’d pull that off. And while funds in bZx actually increased after the first Valentine’s Day attack —probably as a result of higher ether rates and media exposure— they plunged after the second one. This has caused ether rates on the platform to spike as liquidity dried out.
MakerDAO Scrambles to Fix Potential Flash Loan Exploit
All of DeFi is in high alert after the bZx exploits made it clear that hackers can use flash loans —loans that can be taken out without putting up any capital as long as they’re paid back in the same transaction— to manipulate the system.
With MakerDAO holding more than half of all the ETH in decentralized finance, it’s a big target, and token movements spurred speculation hackers are preparing an exploit. An attack on MakerDAO would be dramatic for DeFi, as most platforms are heavily exposed to Dai, the stablecoin issued by the system.
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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. (Pre-order The Infinite Machine here). I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.
