Nftfy - NFT Securitizer
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Nftfy Nest - An environment to boost the liquidity of new tokens, powered by Balancer and Nftfy.
Nftfy is a decentralized securitization protocol that allows anyone to create ERC20 compliant Shares backed by NFTs. This means that many new ERC20 tokens will be created.
Therefore, there was a need to create a curation process and an environment to boost liquidity, in order to develop a tokenomics to properly stimulate the launching of new tokens. This environment is named Nftfy Nest, and its tokenomics is entirely developed within Balancer Protocol. To completely understand, we recommend reading the White Paper and following Nftfy on Medium and on the Discord community.
In this document, it is presented a summary of the following topics.
1. Nftfy Protocol 2. Tokenomics 2.1 Important Concepts i. Nftfy Nest ii. NFY Token iii. NFY Distribution 2.2 Complete Tokenomics Explanation 2.3 Other Features 3. Proposal 4. Nftfy Team 5. Nftfy official
1. The Nftfy Protocol
Generally speaking, securitization is a parasocial procedure related to the creation of securities backed by an asset, right, and/or liability. It divides the ownership of an asset with numerous other parties, being necessary to establish rules that will manage the shareholders’ individual interests. Usually, these rules are described in a contract commonly known as Shareholders’ Agreement, and it has clauses that approach numerous possible scenarios. The securitization process is centralized and will always be when related to real-world assets. However, once this concept is brought within Blockchain domains, more specifically in regard to Non-Fungible Tokens (NFTs), it can be developed in a totally decentralized manner.
In Nftfy, the backing mechanism is entirely decentralized and software-guaranteed, without the necessity of any intermediary such as regulators, auditors, or compliance. Employing the methodology Lex Cryptographia, Nftfy brings legal contractual elements and adapts them into code through Smart Contracts, making them inviolable and robust, and guaranteeing all the user’s rights in a highly simplified way. As a major component in the Shareholders’ Agreement, a simple exit rule is defined, in which it conducts the way the parties should proceed to reverse the securitization process. It is directly within this rule that the Nftfy Protocol works, and all the concepts involved can be found in detail in the article “The decentralized securitization”.
Nftfy executes this procedure in a simple manner. Basically, the protocol certifies two issues:
- The Shares must be backed by the NFTs;
- The rights of the parties involved (Shareholders) must be preserved.
Nftfy protocol simply guarantees this in three steps:
Securitization - Redeem - Claim
Stake your NFT and generate ERC20 compliant Shares. Then, set an Exit Price, which is the maximum price that anyone needs to pay to Redeem the NFT back from the stake.
Creation of 1.000.000 Shares
Exit Price at 2.000.000 DAI
Any user who wants to withdraw the NFT can interact with the contract by paying the Exit Price. This payment can be done using Shares and the cryptocurrency set on the Exit Price.
30% in Shares → 300.000 Shares
70% in coin → 1.400.000 DAI
The payment made in cryptocurrency - in this case, DAI - is staked in a contract Vault and can be Claimed by the other token holders.
The Shareholders who have the remaining Shares can Claim their rights by exchanging their Shares with the proportional amount of coins in the Vault.
Shareholder 1: 10% of shares (100.000 Shares) → Exchange for 200.000 DAI
Shareholder 2: 5% of Shares (50.000 Shares) → Exchange for 100.000 DAI
You can see more about all the three processes in our article on Medium “Nftfy User’s Guide” and in the following figure.
[ See in the official document ]
Figure 1 - Schematic Diagram of the three processes in Nftfy
2. Nftfy Tokenomics
Considering that, from now on, anyone can create a variety of new ERC20 tokens, as discussed on Exponential Framework on DeFi, the number of ERC20 creations will rise too quickly. Therefore, the Nftfy Tokenomics needs to:
- Help these new tokens (ERC20 compliant Shares) to raise a minimum tradable liquidity;
- Protect the market against malicious agents;
- Build a strong and evolved community.
2.1 Important concepts
We explain the tokenomics and how it is integrated with Balancer Protocol, also, the topics of Nftfy Nest, NFY Token and NFY Distribution will be introduced below.
2.1.1 Nftfy Nest
Nftfy Nest is an environment of Liquidity Bootstrapping Pools. The LBPs are selected through a decentralized curation process that:
- Analyses the proportion of total Shares on the LBP;
- Analyses the market capitalization based on the NFY token as reference;
- Stakes the BPT as proof of liquidity;
- Classifies the NFT;
2.1.2 NFY Token
Nftfy Protocol has its own Governance Token: the NFY. It has some important attributions, such as:
- Act as shares collateral on the LBPs;
- Boost the environment of new ERC20 Contracts through Liquidity Mining;
- Provide governance power to token holders (curation and management)
It also has secondary attributions, like:
- Funding the development of NFT Ecosystem;
- Funding new composability features on DeFi Money Legos;
- Reward token holders.
2.1.3 NFY Distribution
Inspired by different benchmarks and developed to create a long-lasting and powerful protocol, the NFY tokens are going to be distributed over the next six years. The distribution of the majority of the tokens (65%) is presented below:
- Liquidity Mining (20%): to boost liquidity of new Shares on Balancer Pools.
- Initial Liquidity (5%): to foster securitization and boost the community.
- DAO Treasury (40%): The DAO will assume the responsibility of managing this amount of tokens and it will have the power to decide whatever is the best option for the protocol.
The other 35% of the tokens are reserved for the Nftfy Team, investors, partnerships, marketing, and vesting mechanisms.
2.2 Complete Tokenomics Explanation
Nftfy tokenomics is designed to deliver to the open market the maximum of good Shares with liquidity. The following figure shows the schematic diagram of its tokenomics.
[ see in the official document ]
Figure 2 - Tokenomics schematic diagram.
As Nftfy Tokenomics uses Balancer Protocol and there are many ERC20 tokens to boost, a mechanism was created to use NFY as collateral to compose the LBPs.
Figure 3 - Nftfy Nest environment with Liquidity Bootstrapping Pools using Shares and NFY tokens.
The Balancer protocol provides the technologies that allow building this tokenomics structure. Beyond the Pools and the Smart Pools, technologies such as Smart Order Routing (SOR) and Multi-Path Route would be also very useful for the protocol.
This tokenomics is supported by two value proposals:
- The community provides liquidity through the NFY token, counterbalancing strong assets, especially DAI and WETH.
- The market value of each NFT is counterbalanced in pools with NFY.
A new version of the tokenomics is being developed, in which improvements have been proposed, such as:
- Scheme of rewards and token burning;
- Token accumulation procedures;
- Shares negotiation by the DAO to provide liquidity;
- Accumulating process of high potential Shares by the DAO.
These value proposals strengthen Nftfy’s community and allow the administration of Tokenomics’ business model. Therefore, the community can work on many fronts to improve the utility of the NFY and to bring liquidity to it. Some examples include the management of the Impermanent Loss, by choosing the pool that best fits their portfolio allocation, and the reduction of the Slippage to negotiate Shares. Furthermore, the community will benefit from a six-year liquidity mining process.
2.3 Other Features
A difficulty that a token issuer goes through is to create a users’ base for the newly created Shares. Also, the NFY holders are the most interested community in participating in this kind of initiative. Therefore, any token issuer can make airdrops to Liquidity Providers on Nftfy Nest pools, and all the community continues to benefit constantly for a long time. This process provides a complete mechanism of Shares offering and it has the following features:
- Airdrops to an interested community
- Liquidity providers
- Proof of Liquidity
- Liquidity Mining
- Governance power
Nftfy Protocol is requesting support on the following topics:
- Associate Balancer’s brand as a supporter of the Nftfy Protocol.
- Promotion of Nftfy Protocol by the Balancer Community.
- List NFY as valid to receive BAL in pools. (When appropriate)
- 1,000 liquid BAL.
- 4,000 BAL to compose the LBP BAL/NFY in the 80/20 proportion.
- Proof-of-liquidity for 6 years with the BPTs of this pool.
- Pool 0x2ddd5425a2c78ceb168d52a65fda21600a03035f
BAL Community Support
- Boost Nftfy community at the beginning by:
- Joining our Discord Group
- Using Nftfy protocol
- Buying Shares
- Launching your own Security Dex Offerings (SDOs)
- Boost Nftfy community at the beginning by:
In this regard, Nftfy promotes other different ways to use Balancer protocol, providing important contributions, such as:
- New tokens offerings and Liquidity Mining, which stimulate the use of Balancer Protocol;
- Nftfy Nest, a full ecosystem to launch liquid Shares;
- Simplified UX to structure an IPO;
- Degen IPOs (Nftfy Nest + Balancer);
- Degen LBPs;
- Degen Airdrops;
- Degen Securities (Nftfy Protocol);
- The constant development of technologies and structures that facilitate the integration of new users, in order to boost liquidity for newly created tokens.
Creator and architect of the Nftfy solution. Electronic Engineer, Belong to the BlockchainBH Community, an association responsible to teach and popularize Blockchain to the Brazilian Community. Was co-founder and CEO of Cryptonita Social Trading startup for two years, and it was there that he learned about the legal rules (Shareholders’ Agreement) that the Nftfy Protocol is based on.
Ph.D., Yale, Computer Science
Blockchain Architect, Toptal Freelancer, Smart Contracts Specialist,
Creator of the wallet Cashu with support of more than 30 Cryptocurrencies
Lawyer, Member of BlockchainBH Community an association responsible to teach and popularize Blockchain to the Brazilian Community.
MBA Professor of Blockchain and Cryptoeconomics.
Solutions Architect, Team Lead with 12 years in Software Development
Experience with DeFi Applications and Crypto Exchange
Master in Electrical Engineer, Product manager, Public relations
Blockchain and DeFi enthusiast, Tokenomics designer.
Lalo Trage, Cláudio Trage and João Hazim
One of the main content sharing companies in Portuguese for the crypto market - approximately 20 thousand followers. The founders developed their own methodology for fundamental analysis of crypto projects and since then have been mentors and consultants for investment groups.
NFY Official: 0xc633baf9fde99800226c74328024525192294d2b
Live Demo (Rinkeby):
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