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DeFi unlocks new potential with income streams. Periodic returns on assets can be manipulated in several efficient ways. In this video, we detail how some of these income streams work and how DeFi uses them through various digital assets.
00:00 – DeFi and manipulating income streams
01:58 – Changing interest streams
04:10 – Tokenizing income streams
06:50 – Creating streaming income
08:34 – NFTs and income streams
09:11 – Income streams as an asset
The first way is the receiver’s address. Some DeFi protocols allow users to determine which address receives the interest payout. One address lends out assets which is the principal amount. Another address receives period interest payments on the asset. That’s pretty cool. This can be redirected to a charitable cause, a fund to hedge investments or other forms of investment.
The second way this works is through tokenization. The process of tokenization is putting assets on the blockchain. These assets are denoted by a token. Income streams can be tokenized and sold on the exchange. The owners of these tokens will now receive periodic interest payments. These tokens can be sold on DeFi based decentralized exchanges.
Another potential use case is through non fungible tokens or NFTs. Where the user can turn their income stream into an NFT, which is unlike a normal token. An NFT cannot be duplicated. It is unique and can have only one owner. This owner will receive the income stream and not someone else. These NFTs can be created and like normal tokens they can be sold on exchanges.
There are endless use cases of DeFi, this is one which is going to be used more and more. In traditional finance, income streams are very linear. They go from one account to another, which no change. DeFi allows users to manipulate income streams, tokenize them, and even sell them.
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