A list of NFT liquidity solutions How to use derivatives to break the "dimension wall"

NFT can be used to represent the ownership of digital artwork, collectibles, game assets, etc., and a single NFT may have extremely high value. However, because they cannot be divided, NFT assets lack liquidity, and often need to be circulated through auctions and other means, and it is difficult to have a price that everyone recognizes. ShardingDAO, Unicly, and Alchemy each try to mortgage indivisible NFTs to generate easy-to-circulate ERC20 tokens in the form of derivatives, lowering the threshold for users to enter the NFT market.

ShardingDAO is an NFT decomposition and synthesis protocol built on Ethereum and BSC. Users can split NFT into standard ERC20 tokens to trade on decentralized exchanges such as Uniswap. Collectors can also obtain ownership of the entire NFT by staking fragmented tokens and initiating a purchase offer in the agreement. If the offer is passed, the corresponding NFT can be obtained.

Fragmentation

NFT owners can pledge their own NFT in the agreement to mint ERC20 shard tokens. The creator needs to set the name, symbol and minimum subscription amount of the ERC20 token. After a 7-day subscription period, if the minimum subscription amount is reached, ERC20 tokens can be finally issued; if the subscription fails, the mortgaged cryptocurrency needs to be redeemed manually. After successful subscription, the agreement will deduct 5% of shard tokens and 5% of sales revenue to provide liquidity in the secondary market. The original owner of the NFT receives 95% of the sales revenue and 5% of the shard tokens, and 90% of the shard tokens will be distributed to subscribers in proportion.

NFT artist Beeple will open a physical studio in South Carolina, USA: Jinse Finance reported that NFT artist Beeple announced in a tweet that he will open a physical digital art studio in Charleston, South Carolina, USA. Beeple said that during the recent downturn, in Displaying digital art in the real world may be just what the NFT market needs. The whole digital art/NFT community coming together to experience digital artwork IRL (in real life) I think will help attract the next wave of collectors, which is what we need to get out of this bear market. [2022/10/14 14:27:09]

Liquidity Mining

The agreement has already deducted the funds and shard tokens used for the initial addition of liquidity, and the LP tokens pledged by users of shard tokens can participate in mining to obtain SHD token rewards.

Only the top ten pools by TVL can receive mining rewards, and the rewards are distributed equally among these pools. If a new pool meets the conditions, one of the top ten pools can be selected for comparison. If the TVL exceeds the pool, the ranking of the pool can be replaced and mining rewards can be started.

YGG bought 22 DigiDaigaku NFTs worth $51,303: On September 2, the game guild Yield Guild Games (YGG) announced that it would buy 22 DigiDaigaku NFTs worth $51,303. The guild can participate in various activities after the launch of the DigiDaigaku ecosystem. gaming experience.

According to previous news from Jinse Finance, OpenSea data shows that the DigiDaigaku Genesis series NFT has a transaction volume of 376.61 ETH in the past 24 hours, and the 24-hour transaction volume has increased by 130%. The trading volume in the past 24 hours ranks No. 2 in OpenSea.

It is reported that Limit Break, the parent company of NFT project DigiDaigaku, has raised US$200 million through two rounds of financing, led by Josh Buckley, Paradigm and Standard Crypto, and participated by FTX, Coinbase, Positive Sum, Shervinator and Anthos Capital. [2022/9/2 13:05:11]

Mining is divided into two phases. The first phase starts on March 23, 2021 and lasts for 21 days, and is distributed to single-currency stakers of Ethereum and BSC. After the end of the first phase, the second phase will start on April 13 to provide liquidity for shard tokens. The developer DAO will share 20% of the mining rewards.

The popular Korean cartoon "Lychee Bear" LYCHEE&FRIENDS launched a limited NFT series LYCHEE: On June 10, the popular Korean cartoon "Lychee Bear" LYCHEE & FRIENDS announced that it has officially expanded from the real world to the virtual world, and entered the metaverse with a new limited NFT project LYCHEE. The NFT will be issued on the Ethereum blockchain. It is reported that LYCHEE & FRIENDS will work with a number of digital artists to produce a limited edition NFT, using the cartoon character Lychee Bear as the design blueprint, each NFT is matched with a unique design and accessories, and a total of 20 three-dimensional art images will be released. [2022/6/10 4:16:57]

Buy Out Offer

Users who hold more than 15% of the shard tokens can initiate a tender offer to acquire the remaining tokens to redeem the full NFT. The bid sponsor needs to set an acquisition price (higher than the current market price), pledge the shard tokens he owns, and the fee required to acquire the remaining shard tokens.

If, in addition to the tokens pledged by the initiator of the offer, among the holders of the remaining shard tokens, less than or equal to 25% of them vote against it, the tender offer will be valid. The voting period is 3 days. Once the acquisition is successful, the ownership of the NFT will be transferred to the initiator of the offer, and all shard tokens will be destroyed.

The NFT metaverse game CapsCoin received Moonrock Capital's strategic investment: On December 11, Moonrock Capital and CapsCoin announced a long-term partnership to accelerate the development of CapsCoin and ensure its stable growth in the NFT industry. Capscoin stated that Moonrock Capital will become a new shareholder of Capscoin, providing the company with more funds to support Capscoin's product development and accelerate global growth. [2021/12/11 7:32:30]

The protocol obtains the liquidity funds injected into the initial liquidity LP tokens, and the value corresponding to the shard tokens. 20% of the income will be distributed to the developer DAO, and 80% will be deposited into the platform funds. Platform funds flow directly into Shangding Bar, where those who pledge SHD tokens will get benefits.

In addition, mining in ShardingDAO also requires a referral link. Users must have an invitation code to join, and they can also send invitation codes to others after joining. The invitation relationship will provide a boost to mining.

Unicly is an NFT combination, sharding and transaction protocol. The whole process of Unicly is similar to that of ShardingDAO. The distribution of the governance token UNIC is more fair. There is no financing, and developers get 10% of the reward. But Unicly's liquidity solution is not for a single NFT, but for a combination of NFTs.

Sora Ventures and BitForex launched an NFT fund: On April 12, Sora Ventures and BitForex launched a new NFT fund to raise more resources to provide bridges for these projects and enhance their legitimacy. Sora Ventures is currently looking for long-term partners to build this fund. The main goal of this collaboration is to provide funding and community support for NFT projects, accelerating the growth and adoption of NFTs on various ecosystems such as Binance Smart Chain, Polkadot, Solana, Cosmos, and Ethereum.

Sora Ventures was established in January 2018. It is the first digital asset fund in Asia. It manages tens of millions of dollars in assets. Its business covers investment, incubation, community and consulting. It has successfully invested in Mithril, OriginProtocol, Urbit, Immutable, Tari, etc. Many well-known projects. [2021/4/12 20:10:22]

uToken Creation

Anyone who owns an NFT can create their own uToken on Unicly. uToken believes that the market value of a single NFT is limited. By sharding a collection of NFTs, the overall value of uToken is higher, which can be more conducive to the liquidity of NFT assets . Therefore, Unicly allows users to lock any number of ERC-721 or ERC-1155 NFTs into smart contracts to create corresponding uTokens. For example, uMASK, which is more popular in the current protocol, has dozens of NFTs of Hashmasks behind it; uDOKI, which has the best liquidity, has more than 20 Doki Doki NFTs behind it.

After the uToken is created, the corresponding NFT can only be redeemed if the established conditions are met. However, the creator can add NFT to the portfolio at any time. This process will only increase the value of uToken and will not harm the interests of the holders, increasing the flexibility of the protocol.

Liquidity

Unicly itself does not help the creators of uTokens with the initial sale, nor does it generate profits from the minting of uTokens. The creator must create liquidity for the corresponding uToken himself, and the uToken is also sold by the creator himself. In order to support uToken transactions, Unicly has created a decentralized exchange similar to Uniswap, which includes uToken, ETH and stable coins, and the pledgers of UNIC tokens can get part of the transaction fee.

The protocol will also encourage users to provide uToken liquidity through liquidity mining, but only uTokens that enter the whitelist can receive rewards, and holders of the governance token UNIC have the right to vote.

Buyout

Whenever a uToken is created, the creator needs to set the proportion of voting to unlock the corresponding NFT combination, and uToken holders can vote to unlock the corresponding NFT combination. For example, the unlocking ratio of uDOKI is 51%, and only when more than 51% of uDOKI holders vote for unlocking, can the corresponding NFT be redeemed, and uDOKI holders will get the ETH participating in the bidding according to the holding ratio.

Although each uToken corresponds to a group of NFT collections, Unicly also allows collectors to bid on individual NFT collections. When the NFT combination is unlocked, the highest bidder for each NFT will get the corresponding NFT.

Alchemy allows original NFT holders to sell partial ownership, create NFT collections, and convert indivisible NFTs into liquid assets.

Create

Alchemy allows owners of ERC721 tokens to create DAOs with related NFT assets, and the corresponding assets are controlled by the DAO’s governance tokens. Governance tokens can be freely traded and transferred, creating a liquid market for NFT ownership. Owners of governance tokens have voting rights and claim rights to NFT sales, and the value of governance tokens represents the value of the NFTs in the collection.

Each NFT DAO can set the price of buying out the NFT to any value, and collectors can purchase the corresponding NFT from the DAO by transferring the corresponding ETH to the contract. Holders of NFT DAO governance tokens can burn governance tokens to claim ETH for buyouts.

ALCH Token

Every buyout of NFT DAO will send a small fee to ALCH DAO, and distribute it to the ALCH treasury and ALCH pledgers. ALCH holders can obtain fees by staking ALCH tokens. Holders of the ALCH token also control the Alchemy treasury, and holders can vote on how these funds are used to govern and grow the protocol.

Alchemy airdropped 20% of the tokens to community users who hold NFTs, but as of now, there are still a large number of users who have not received them. If they have not been claimed by April 18, the remaining tokens will be used for auction and the proceeds Funds are injected into the vault.

Summary

Essentially, ShardingDAO, Unicly, and Alchemy all mortgage indivisible NFTs and mint them into divisible and tradable ERC20 tokens, lowering the threshold for users to enter the NFT market. Collectors can buy out and redeem NFT after paying the price.

ShardingDAO and Unicly are more focused on providing liquidity for high-quality NFT collections, and most of the governance tokens are distributed to liquidity providers of shard tokens. But in Unicly, the collateral behind each shard token can be composed of multiple NFTs, which is beneficial to increase the value of the collateral and thus provide better liquidity.

Alchemy pays more attention to the governance of sharded tokens. Every NFT that is mortgaged can form an NFT DAO with broader governance authority.

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