NFTs: The Next Killer Financial Asset

Julia Maltby
7 min readDec 13, 2021

The pace of innovation around NFTs is unlike anything I’ve ever seen before. In Q3 2021 NFT sales exceeded $10 billion in trade volume, a 704% increase from Q2 2021. (source) Last week an NFT project sold for the highest price in history for a living artist — $91.8M. While the revenue generated was impressive, I’d argue this sale was particularly significant due to the number of participants — over 28,000 buyers purchased ~266,455 NFTs from the project in a matter of days. (source)

Digital Artist Pak’s NFT drop breaks auction records at $91.8M
Digital artist Pak breaks art auction record at $91.8M in sales

There are an immeasurable number of sub-trends, and associated new products and services, surrounding NFTs. From verticalized marketplaces to NFT-driven social networks, the market seems to be rocketing in a million different directions. I’m finding NFT implications for consumer fintech particularly fascinating at the moment, specifically around the applications enabling consumers to utilize and leverage NFTs more meaningfully as financial assets.

Before diving in, some quick framing for the discussion. As I recently wrote about here, there are a multitude of motivations that drive consumers to invest in NFTs. Some view NFTs as art, others as assets, and some view them as mechanisms to unlock both real and digital world utilities. NFT ownership, particularly of “famous” projects, also unlocks status and social capital. Importantly, most consumers invest in NFTs for more than one of these reasons. Basically, NFTs, like many real world assets, offer multiple sources of value to their owners.

In thinking through consumer-fintech applications for NFTs, I find it helpful to use a real word example of another multifaceted asset — a second home. Ideally, a home is an asset that appreciates in value, while also providing “utility” to its owners (e.g. using it for vacations). However, the home as a financial asset, or tool, goes far beyond straightforward price appreciation. Homes have been used as lending collateral for centuries, and, largely due to companies like Airbnb, the home as a mechanism for supplemental income has been normalized. Companies like Realm also help consumers proactively use their homes to generate passive, or future income, in creative ways.

In short, homes — and second homes in particular — are highly multi-purpose assets from a financial standpoint, and hundreds of products and services exist to help consumers get the most value out of them.

Now, let’s compare owning a house to owning an NFT. In their current state, I’d argue that “good” NFTs theoretically deliver on at least two main value propositions. One, they serve as stand alone assets that appreciate in value and two, they provide real world utilities. BAYC is a perfect example of this. The value has gone up from .08 ETH at mint in April to ~50 ETH for the cheapest bored ape today. Bored ape owners also get access to exclusive real experiences, like this private yacht party during NFT.NYC. It’s worth noting the vast majority of projects don’t deliver on price appreciation and utility to the same extent, but theoretically NFTs can provide both.

Importantly, focusing specifically on the financial versus utility benefits of NFT ownership, the only value for most, currently, is price appreciation. Compare this to all the mechanisms by which consumers can derive financial value from home ownership, and you can see where I think the “consumer fintech” NFT market is heading. Three specific use cases I find interesting are fractional NFT ownership, “renting/sharing” of NFTs (and associated utilities), and NFT collateralized lending. Importantly, this is obviously nowhere near an exhaustive list.

Fractional Ownership:

Fractional ownership of NFTs is a relatively straightforward concept and has emerging analogies in the home equity market as well (e.g., HomeTap). Rather than purchasing an NFT outright, fractionalization enables consumers to own a piece of an NFT. As the prices of “blue chip” NFT projects soar, fractional ownership will enable consumers to engage with NFT communities they’d otherwise be priced out of. For the NFT owner, there’s immense value in generating partial liquidity from an NFT without having to sell it outright.

Like owning a fraction of any other asset, ownership percentage is commensurate with investment relative to the assets full price. (e.g. if an NFT is worth $100, and you pay $10 for a fraction, you own 10%). Beyond fractionalizing single NFTs, there’s also an opportunity to own fractions of a collection of NFTs (effectively, an NFT index fund). is arguably the frontrunner in the fractional NFT market, but others are following suit. Bridgesplit, for example, is building a full suite of liquidity offerings for NFT owners.

There are still improvements to be made around the actual process of fractionalizing shares. But, beyond that, I think 2022 will see a rise of product offerings for managing and governing the communities of fractional share owners.

Renting/Sharing NFTs:

Again, the concept of renting, or sharing, NFTs is relatively straightforward and, again, just like a home — owners can rent their NFTs to others for a finite amount of time for an agreed upon price (which could be currency, or another NFT). There are a few early players here, ReNFT being one of the leaders, as well as Trava and Vera Labs.

For the owner, the value of renting an NFT is simple: passive revenue generation. For the “rentee” there are multiple use cases, or motivations for borrowing an NFT. He/she may be interested in “flexing” by temporarily displaying a high profile NFT on a social channel. (It will be interesting to see how this use case evolves as Twitter, and likely other social platforms, start verifying NFT usage.) Rentees may also want to borrow the utility associated with an NFT, in a gaming setting, for example. Importantly, while these transactions are currently occurring between consumers, it’s likely that enterprises and institutions will start engaging here as well (e.g. virtual galleries renting “famous” NFTs for specific, time bound exhibitions).

Beyond the transaction facilitation layer, over the next year I think we’ll see product offerings emerge around discovery, or matchmaking, for renters and rentees (e.g. verticalized lending marketplaces and exchanges). And, beyond basic marketplace functionality, suits of offerings to help manage borrowed and rented NFTs.

NFT Collateralized Lending:

NFT collateralized lending works much like lending for any other asset class such as home mortgages. Let’s say you own a Bored Ape worth $1,000,000. Bored Apes continue to experience insane price appreciation, but you need liquidity. Rather than sell your NFT, you put it up as collateral for a loan, and then use that loan to cash out, or possibly buy more NFTs.

NFTs are just recently starting to be regarded as true financial assets, so unsurprisingly the offerings here are arguably in infancy. NFTFi is a notable example, which is building a marketplace for lenders to borrow with NFTs as the core asset category.

Looking Forward:

Again, these use cases barely scratch the surface of consumer oriented fintech applications for NFTs (not to mention an incredible number of less consumer leaning fintech opportunities involving NFTs, such as insurance). Overall, there are two more macro trends underpinning the success of these, and other, applications, I’m thinking about.

First, NFT appraisal. Again, as I recently wrote about here, there are a multitude of ways to think about the value of an NFT — both in terms of economics and utility. But, TLDR, it remains a highly unregulated wild west. Valuations are overwhelmingly subjective, even as more and more consumers are investing in NFTs solely for financial returns. There are a few players here (e.g. Upshot), but I hope to see more platforms and services in 2022 that assist in consumer friendly data driven appraisal tools for NFTs. (Honestly, there seems to be some low hanging fruit here. For example, mechanisms for providing an analysis on the strength of an NFT’s discord community based on volume, % of bots, “quality” of conversations, etc. This may never be an exact science, but right now consumers are individually doing the legwork to assess community “health”, as it has such strong implications for an NFT project’s valuation).

Second, NFT curation. We’re already starting to see this with vertical specific NFT marketplaces, but “curation” here is generally more artistic (e.g. marketplaces for photography NFTs as opposed to other art mediums). These platforms are needed. But, as NFTs continue to be regarded as financial assets, there’s also an emerging need for financial curation, in a sense. Again, proper appraisal is critical for this to work. But from there, as NFTs or NFT fractions start to get pooled and bundled, thinking about each as an asset with expected returns, individualized levels of risk, etc. and how those idiosyncrasies play together in conjunction with others in the pool, will be very interesting.

As always, if you’re building in the NFT space, or just interested in speaking, I’d love to connect. Please shoot a note to



Julia Maltby

Early Stage Investor @ Flybridge & X-Factor Ventures | GP @ The MBA Fund | Previously @ Underscore VC, WeWork, and Plum Alley Investments | Wharton MBA