The core idea to bridge NFTs and DeFi was generated during the early 2021 NFT hype, when numerous articles reported on large purchases of numerous NFTs that had all kind of digital products as an underlying, extending the craze from digital artwork to sport clips, Twitter posts and many more. In an attempt to understand the economic value of such NFTs non could be identified, instead the value was set to be whatever the market was willing to pay. Hence, it begs the question:

What would the same person pay for an NFT that had an actual monetary underlying?

After conducting a feasibility study for an innovative use case to tokenize (ERC-721) YouTube videos with the idea to redirect ad-based revenue streams to new owners, a few significant barriers were identified which led to the adjustment to design such infrastructure for website owners who monetize their websites with an ad network in order to earn a passive income. However, the underlying product is not limited to websites and videos only, but also social media accounts, digital billboards, apps etc. Simply put anything that can be considered as inventory for advertisement placement.

Further research revealed the possibility to create a new type of digital asset, which similar to mortgages in the U.S., could be securitized. This realization begs the second question:

Can such NFTs be securitized as a new type of asset-backed security, opening up a new market?

First conversations with financial institutions confirm their interest, yet would require a more detailed description of the business model and the asset, especially when it comes to the technical execution. Consequently, the aim of the Chainlink Fall 2021 Hackathon is to create a minimum viable product (MVP) to show a possible technical solution for the core functions of the intended business case and to establish a basis upon which further business-related decisions can be made.