What is Aavegotchi? Where NFTs meet DeFi
Aavegotchi aims to combine the exploding DeFi movement with non-fungible tokens (NFTs). DeFi and NFTs are arguably the two fastest-growing sectors in cryptocurrency, definitely in the Ethereum ecosystem. Aavegotchi enables users to create rare collectibles that they mint by staking DeFi assets. As you may have guessed, these are DeFi assets deposited in the Aave lending platform. Here we will take a look at what is Aavegotchi, along with a GHST token review.
What is Aavegotchi?
Aavegotchi is the first project attempting to combine the potential of DeFi and NFTs in one product. Essentially, Aavegotchis are crypto-collectibles living on the Ethereum blockchain as an ERC721 token. This is the type of non-fungible tokens you find in popular blockchain games such as CryptoKitties, Axie Infinity, or used to create digital art in Rarible.
So it’s a new blockchain game?
Aavegotchi’s will also have traits and wearables, such as their level, age, or equipped items (child NFTs), to increase their rarity. Traits and wearables are not fixed from creation, meaning over time, you can evolve your Aavegotchi. Thus, increasing its overall value by playing the game. So in that sense, Aavegotchi will be a blockchain game, however, it also has DeFi tokenomics built-in.
Understanding the value… Aavegotchi’s have intrinsic value because users need aTokens to stake as collateral to mint them. Meaning if there is a 100 aDAI stake to create the Aavegotchi, then the intrinsic value would be 100 aDAI plus the accrued interest from Aave’s lending pool.
- Given the platform combines DeFi lending and NFTs in one, we can theory-craft future use cases such as depositing your Aavegotchi as collateral for a loan.
Farm GHST tokens… Users will also be able to earn rewards in GHST tokens by training their Aavegotchis within the game, much like liquidity mining. GHST is the platform’s native token, primarily used for buying and selling different NFTs within the ecosystem. Furthermore, GHST intends to be a governance token for when the platform transitions to being AavegotchiDAO.