What does NFT stand for?

NFT stands for Non-Fungible Token and is usually a ‘non-replaceable token’. It means to ‘tokenize’ something unique that cannot be replaced on the blockchain, and the opposite concept is a replaceable token FT (Fungible Token).

Blockchain records transaction details in a ledger and shares the same copy as the original with all network participants, so it can be used as a means to prevent data forgery or prove ownership according to transaction details.

One of the areas that can best utilize the properties of such a blockchain is ‘recording and proof of ownership in the digital realm’. Intangible values such as effort and time as assets, which were not previously classified as assets, can now be converted into assets, and ownership rights can be managed.

What is staking?

Staking is the holding of coins in a cryptocurrency wallet to support the operation of the blockchain network. It consists of freezing the cryptocurrency to receive rewards.

On early stage, it was based on a hybrid proof-of-work/stake mechanism, but gradually the proportion of proof-of-work (PoW) is decreasing and the proof-of-stake (PoS) mechanism is increasing.

Delegated Proof of Stake allows users to use their balances to elect a certain number of representatives, and elected representatives manage blockchain operations on behalf of their voters, and are responsible for security and consensus. Stakeholders can stake their coins and receive periodic rewards for holding funds.

The delegated proof-of-stake model reduces latency and increases network throughput (for example, it can process more transactions per second), which allows consensus to be achieved by fewer verification nodes. On the other hand, since users depend on the selected node group, the level of decentralization generally decreases.

Baking on Tezos?

The method of creating blocks and verifying blocks on the Tezos blockchain is called baking and has the same meaning as mining. For mining, you must participate in the Tezos Proof-of-Stake system, which requires at least 8,000XTZ. The more XTZs you own, the higher the probability of creating blocks and obtaining block creation rewards. If you don’t have an XTZ to bake or don’t want to create a computing infrastructure to generate blocks, you can delegate coins to the baking node. Delegation is when the coin owner lends the coin to the baking node, increasing the likelihood that the baking node creates blocks and receives block creation rewards. In fact, the baking node usually shares the additional revenue generated from the delegated coin with the coin owner. This process ensures that the coin owner cannot use or control the delegated XTZ at will, and the Baking node’s funds cannot be stolen.

DeFi

Decentralized finance (commonly referred to as DeFi) is an experimental form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum. DeFi platforms allow people to lend or borrow funds from others, speculate on price movements on a range of assets using derivatives, trade cryptocurrencies, insure against risks, and earn interest in savings-like accounts. Some DeFi applications promote high-interest rates, but are subject to high risk. By October 2020, over $11 billion was deposited in various decentralized finance protocols, which represented more than a tenfold growth during the course of 2020.

reference: https://en.wikipedia.org/