Value Creation and Capture in Decentralized Finance Markets: Non-Fungible Tokens as a Class of Digital Assets

Jan Schwiderowski; Asger Balle Pedersen; Jonas Kasper Jensen; Roman Beck

doi:10.1007/s12525-023-00658-z

Value Creation and Capture in Decentralized Finance Markets: Non-Fungible Tokens as a Class of Digital Assets

Jan Schwiderowski
, Asger Balle Pedersen
, Jonas Kasper Jensen
, Roman Beck

Research output: Journal Article or Conference Article in Journal › Journal article › Research › peer-review

Abstract

Information technology (IT) has radically changed the financial services industry, with the most recent transformation toward Fintech and decentralized finance (DeFi), driven by blockchain. Especially non-fungible token (NFT) assets within DeFi are redefining how value is created and disseminated, for instance in the art industry. However, DeFi and NFT market dynamics are not yet well understood. Using a thematic analysis based on 14 interviews with major NFT stakeholders (i.e., marketplace providers, artists, and investing collectors), we identify these NFT stakeholders’ different motivations and strategic options and explain the value creation and capture dynamics in the NFT art market resulting from their interactions. We argue for decomposing an NFT’s value into an NFT-intrinsic and an NFT-extrinsic part. Finally, we elaborate that art NFTs are not a new class of assets because many of their properties are similar to related assets such as physical art and cryptocurrencies.

Original language	English
Article number	45
Journal	Electronic Markets
Volume	33
Number of pages	16
ISSN	1019-6781
DOIs	https://doi.org/10.1007/s12525-023-00658-z
Publication status	Published - 2023

Keywords

decentralized finance (Defi)
non-fungible tokens (NFT)
blockchain
digital assets
financial markets
value creation

Access to Document

10.1007/s12525-023-00658-z

s12525-023-00658-zFinal published version, 1.01 MBLicence: CC BY

https://link.springer.com/content/pdf/10.1007/s12525-023-00658-z.pdf?pdf=buttonLicence: CC BY

The European Commission (Publisher)
Pedersen, A. B. (Reviewer)
8 May 2024
Activity: Publication peer-review and editorial work types › Peer review of manuscripts › Research

Cite this

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title = "Value Creation and Capture in Decentralized Finance Markets: Non-Fungible Tokens as a Class of Digital Assets",

abstract = "Information technology (IT) has radically changed the financial services industry, with the most recent transformation toward Fintech and decentralized finance (DeFi), driven by blockchain. Especially non-fungible token (NFT) assets within DeFi are redefining how value is created and disseminated, for instance in the art industry. However, DeFi and NFT market dynamics are not yet well understood. Using a thematic analysis based on 14 interviews with major NFT stakeholders (i.e., marketplace providers, artists, and investing collectors), we identify these NFT stakeholders{\textquoteright} different motivations and strategic options and explain the value creation and capture dynamics in the NFT art market resulting from their interactions. We argue for decomposing an NFT{\textquoteright}s value into an NFT-intrinsic and an NFT-extrinsic part. Finally, we elaborate that art NFTs are not a new class of assets because many of their properties are similar to related assets such as physical art and cryptocurrencies.",

keywords = "decentralized finance (Defi), non-fungible tokens (NFT), blockchain, digital assets, financial markets, value creation, decentralized finance (Defi), non-fungible tokens (NFT), blockchain, digital assets, financial markets, value creation",

author = "Jan Schwiderowski and Pedersen, \{Asger Balle\} and Jensen, \{Jonas Kasper\} and Roman Beck",

year = "2023",

doi = "10.1007/s12525-023-00658-z",

language = "English",

volume = "33",

journal = "Electronic Markets",

issn = "1019-6781",

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T1 - Value Creation and Capture in Decentralized Finance Markets: Non-Fungible Tokens as a Class of Digital Assets

AU - Schwiderowski, Jan

AU - Pedersen, Asger Balle

AU - Jensen, Jonas Kasper

AU - Beck, Roman

PY - 2023

Y1 - 2023

N2 - Information technology (IT) has radically changed the financial services industry, with the most recent transformation toward Fintech and decentralized finance (DeFi), driven by blockchain. Especially non-fungible token (NFT) assets within DeFi are redefining how value is created and disseminated, for instance in the art industry. However, DeFi and NFT market dynamics are not yet well understood. Using a thematic analysis based on 14 interviews with major NFT stakeholders (i.e., marketplace providers, artists, and investing collectors), we identify these NFT stakeholders’ different motivations and strategic options and explain the value creation and capture dynamics in the NFT art market resulting from their interactions. We argue for decomposing an NFT’s value into an NFT-intrinsic and an NFT-extrinsic part. Finally, we elaborate that art NFTs are not a new class of assets because many of their properties are similar to related assets such as physical art and cryptocurrencies.

AB - Information technology (IT) has radically changed the financial services industry, with the most recent transformation toward Fintech and decentralized finance (DeFi), driven by blockchain. Especially non-fungible token (NFT) assets within DeFi are redefining how value is created and disseminated, for instance in the art industry. However, DeFi and NFT market dynamics are not yet well understood. Using a thematic analysis based on 14 interviews with major NFT stakeholders (i.e., marketplace providers, artists, and investing collectors), we identify these NFT stakeholders’ different motivations and strategic options and explain the value creation and capture dynamics in the NFT art market resulting from their interactions. We argue for decomposing an NFT’s value into an NFT-intrinsic and an NFT-extrinsic part. Finally, we elaborate that art NFTs are not a new class of assets because many of their properties are similar to related assets such as physical art and cryptocurrencies.

KW - decentralized finance (Defi)

KW - non-fungible tokens (NFT)

KW - blockchain

KW - digital assets

KW - financial markets

KW - value creation

KW - decentralized finance (Defi)

KW - non-fungible tokens (NFT)

KW - blockchain

KW - digital assets

KW - financial markets

KW - value creation

U2 - 10.1007/s12525-023-00658-z

DO - 10.1007/s12525-023-00658-z

M3 - Journal article

SN - 1019-6781

VL - 33

JO - Electronic Markets

JF - Electronic Markets

M1 - 45

ER -

Value Creation and Capture in Decentralized Finance Markets: Non-Fungible Tokens as a Class of Digital Assets

Abstract

Keywords

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The European Commission (Publisher)

Cite this