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 () and Roman Beck ()
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Jan Schwiderowski: IT University of Copenhagen
Asger Balle Pedersen: IT University of Copenhagen
Jonas Kasper Jensen: IT University of Copenhagen
Roman Beck: IT University of Copenhagen

Electronic Markets, 2023, vol. 33, issue 1, No 44, 16 pages

Abstract: 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.

Keywords: Decentralized finance (DeFi); Non-fungible tokens (NFT); Blockchain; Digital assets; Financial markets; Value creation (search for similar items in EconPapers)
JEL-codes: G19 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s12525-023-00658-z

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