The NFT20 protocol converts NFT into ERC20 tokens and obtains better liquidity on decentralized trading platforms such as Uniswap.
Written by: Leo Young
NFT is limited by its own characteristics, and liquidity has become a barrier to the financialization and popularization of the digital art market. NFT20 is another decentralized NFT derivatives trading market and protocol.
The name NFT20 reflects the product structure. The AAVE, ZRX, and BAL tokens on Ethereum are homogenized tokens, which can be freely circulated just like legal currencies. These tokens adopt the ERC-20 token standard. NFT artwork is more like a unique commodity, each one is different. Most NFTs on Ethereum adopt the ERC721 and ERC1155 standards. To make the circulation of NFTs convenient, they must become ERC-20 standard tokens. NFT20 comes from this meaning, making NFT easy to circulate.
Anyone can use NFT20 to add NFT to the corresponding fund pool and obtain corresponding NFT20 tokens for trading on decentralized exchanges. Through the NFT secondary market, individuals can invest in the NFT market without purchasing a single piece of NFT work. It is convenient for novices to trade, and it is convenient for collectors and investors to enjoy fair prices.
Function introduction
Users can perform the following operations in NFT20:
- coin
- auction
- NFT Exchange
The three functions are explained in detail below:
coin
Users can deposit NFT20 DEX in NFT in exchange for corresponding ERC-20 tokens. For example, for every Hashmask NFT deposited in the Hashmasks Pool, 100 MASK20 ERC-20 tokens can be exchanged. MASK20 can be traded on Uniswap’s MASK20-ETH trading pair. Or it can also provide liquidity for the fund pool to get rewards.
There are currently sixty-six open fund pools and fourteen tradable NFT20 tokens.
NFT20 top six NFT asset transaction data
Each ERC-20 token has an ETH trading pair in Uniswap. The top three fund pools with the highest liquidity are Hashmasks, Dokidoki20, and Meme LTD. The liquidity pool funds exceed 390,000 US dollars, 170,000 US dollars, and 130,000 US dollars, respectively.
NFT20 encourages users to deposit NFT works of equivalent value into the fund pool. Arbitrageurs can arbitrage between the OpenSea and Uniswap fund pools to bring the price of NFT works closer.
auction
I have a Hashmask work. I think the price of this work should be higher than the market price of 100 MSAK20. Then you can initiate a Dutch auction and use the market to determine the price of this work. If the work is not sold, I can cancel the auction at any time.
NFT Exchange
If I have a Hashmask work, and I like a work in the Hashmask pool. Then I can deposit my NFT work into the Hashmask fund pool in exchange for 100 MASK20 tokens. I will use these 100 MASK20 tokens to exchange for my favorite NFT works.
Example
All kinds of users in the NFT ecosystem can use NFT20 to meet their needs.
NFT holders. Any holder of NFT works can deposit works into the fund pool in exchange for NFT20 tokens to obtain liquidity and liquidity. The NFT20 token itself is also a good NFT investment opportunity. Its own transaction volume and liquidity guarantee that both buyers and sellers can obtain fair prices.
NFT creator. NFT project developers can also create funding pools for their projects in NFT20. A well-liquid fund pool is convenient for users to trade and guarantees fair prices. Since the fund pool trading pair encourages high liquidity, it can also be used as an NFT sales mechanism.
NFT investors. Investors can easily invest in NFT through token derivatives without identifying or purchasing individual NFT works.
Governance and tokens
The operation of the NFT20 platform passed the community DAO resolution. Holders of the governance token MUSE vote to decide whether the proposal will be implemented. The matters that MUSE token holders can participate in decision-making include:
- NFT20 distributes the proportion of handling fees to MUSE holders
- “Profit Farming” Project Permit Criteria
- Team composition and marketing expenses
- Other to be determined
Currently, the main deployment contract is managed by DAO. Since the team has greater control over the project at the beginning of the project, NFT20 publicly expressed its hope to gradually find a fully decentralized governance model suitable for project development.
Value capture
The main function of MUSE tokens is community governance. In addition, holders can also get dividends from platform income.
Trading or minting on NFT20 will charge a 5% handling fee, and holders of MUSE tokens can receive part of the income.
The income to MUSE token holders will be distributed in ERC-20 tokens of various NFT projects. For example Mask20, MCAT20, ROPE20, etc. In this way, community users can obtain the overall income of the NFT market on a larger scale.
In the long run, MUSE tokens can not only capture the NFT market value, but will eventually become a flexible hedging tool.
The platform has not yet begun to charge fees, and the specific implementation will be announced later.
Token economy
The total amount of MUSE is 1 million. Among them, 500,000 has been distributed, and rewards through community games and mining will be completed at the end of February this year. 300,000 will be used for “income farming” rewards, and 500 tokens will be released every day. The remaining 100,000 will be allocated to developers and 100,000 will be allocated to DAO, which will be locked for twelve months.
Liquidity incentives
Daily liquidity rewards 500 MUSE. Currently, ETH-MUSE trading pair liquidity providers receive 250 MUSE rewards every day. Eight NFT20 token fund pool liquidity providers including MASK20, DUDE20, and ROPE20 will receive 31.25 MUSE rewards.
At present, if the liquidity of the NFT project in the Uniswap or Sushiswap fund pool exceeds US$10,000, the liquidity reward can be obtained. This standard will be changed at any time by the DAO vote.
Founding team
NFT20 was founded by independent developers Jules and Adam , both of whom have four years of Ethereum development experience. The website design was provided by Carlos Veloso with design support.
The project started without any external investment or pre-sale, and it was released in the VeryNifty NFT store.
Adam is an independent serial entrepreneur.
Jules is now a free full-stack developer. 2017 Co-founded DAppBoard . Then joined Consensys to do DEX and smart contract analysis work.
The two created the blockchain game VeryNifty at the same time.
Outlook
NFT20 is still a small team, but the community is active. There are currently seven or eight active community contributors.
As the NFT index market grows and community autonomy matures, it will surely attract more outstanding developers and bring more ideas.
From the user’s point of view, from the NFT20 APP interface, the product design is simple and easy to use.
Although the team is small, the execution is impressive. On March 13th, “Moon Cats” (” Archaeology” NFT project MoonCats come back, what chance? “) became popular, and “Moon Cats” trading was opened on the 13th. Deposited more than 600 “Mooncat” NFT within two days of going online, and the liquidity of the MCAT20 fund pool reached USD 240,000.
The team is currently seeking venture capital financing through the sale of MUSE, with an amount of approximately US$500,000. The two founders, Adam and Jules, each sold personal share tokens for $100,000 as daily salary. The remaining 300,000 needs to be approved by MUSE holders to sell community fund tokens to raise funds.
risk
The agreement itself is complex and involves a large number of smart contracts. The current contract has not been audited. Users need to use it with caution. No one can guarantee that there will be no loopholes in the contract.
in conclusion
The NFT20 team has rich experience in Ethereum smart contract development. Although the development team is small, the product is simple and easy to use, and the update speed is very fast.
Token distribution is fair and reasonable. Community governance is open and transparent.
In addition, the community is active and can continuously attract new ideas.
The goal of NFT20 is to find NFT usage scenarios and perfect NFT transactions, exchanges, and sales.
NFT20 is expected to have a place in the NFT index market. At the same time as we continue to expand new features, we can expect explosive growth in the number of users.
