DeFi + NFTs: The Crypto Megacycle

Jamie Burke
6 min readSep 30, 2020

In this series I propose we are a year into 5 year long DeFi hype cycle, likely made up of several mini-cycles, where the aggregate effect is a quadrupling of today’s combined market cap and a doubling of the 2017 $600bn highs based on a sustained ‘mainstreaming’ of the industry.

In fact, it’s not impossible we hit that in the next 24 months alone should a few things fall into place. So now I’ve got your attention let me explain how across three posts. This is post (2/3)

(1/3) The Broken DeFi Hype Cycle

(2/3) Retail DeFi: DeFi + NFTs

(3/3) Institutional DeFi: AI Lego, STOs & dPrime

Retail DeFi:

Firstly, for the purpose of this series I would define ‘Retail DeFi’ as both existing consumers that already use crypto today (although primarily via CeFi) and for speculative purposes, as well as entirely new users who without the below innovations would have no interest in directly holding crypto as as asset class.

As discussed in the previous article (linked above) every hype cycle is usually a consequence of a combination of innovations coming together in a timely way. I propose the innovations that will drive demand for Retail DeFi are as follows:

Innovation triggers: NFTs, via ERC-721 & ERC-1155 (Supply) + NFT Marketplaces (Demand)

‘A non-fungible token (NFT), also known as a ‘nifty’, is a special type of cryptographic token which represents something unique; non-fungible tokens are thus not mutually interchangeable by their individual specification’

These two standards allow for all kinds of unique programmable digital goods of multiple token types and characteristics such as:

social currencies, rewards, collectibles, access tokens, digital art, loyalty points, and digital to physical goods redemption.

But actually most things in your life today are non-fungible including your friendships, house, car only narrow use-cases like money are fungible. So NFT use cases are as limitless as your life today