Proposal - Create a NFTX Liquidity Pool

I propose that a NFTX pool is set up, and a small treasury amount is used to provide ongoing liquidity. Example - 1ETH / 20 Bears

Why NFTX?
By adding your NFT to an NFTX vault you mint an ERC-20 token that has a 1:1 claim on a random NFT inside the vault.

Unlike a non-fungible token (NFT), an ERC-20 is fungible (all tokens are the same) and this allows it to be:

  • Instantly sold at an AMM (like Sushiswap)
  • Pooled in an AMM to earn trading fees
  • Staked
  • Used as collateral to borrow stablecoins
    Tokens can be used to redeem a random vault NFT at any time.

Benefits
-Allows a fraction of bear to be purchased.
-Allows bear holders to exit if necessary.
-Allows bear holders to swap their bears for another in the pool.
-Stabilizes price floor. If something is listed very low on opensea, it can be purchased by a user and sold to the NFTX pool (arbitrage trade), raising the OS floor price and increasing volume.
-Another shop window for project exposure.
-Fees earned (paid out in bears) can be used for giveaways/burns etc.

Downsides

  • Impermanent loss may occur in providing liquidity. If price was to rise steeply, liquidity bears would be sold for ETH. If price was to decline steeply, the ETH would be sold for bears.

As a ETH/NFT/DEFI centric DAO I believe this is a step in the right direction and welcome all discussion.

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I do like the concept. What is the difference between NFTX and NFT20? I’ve seen both in different discord groups but I haven’t used either so thats the extent of my understanding. Thanks for the info above it provides more clarity. I think what you’re proposing is a small investment so no issues there.

I believe NFT20 only supports pools for tokens using the ERC-20 standard. The Buzzed Bears are an ERC-721 token standard so likely incompatible.

I’m indifferent towards an NFTX pool in general. I think it generally just benefits AMM’s and non-committed holders. I might be wrong here but from my perspective, a liquidity pool’s function and benefits wouldn’t align with the interests of the DAO. From my experience they tend to bring in more flippers that will continue to undercut the floor price if the liquidity buy-in is cheaper than the tokens floor price.

If I am wrong in some way I would like to to hear from somebody with strong knowledge on their utility for NFT projects.

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Wow great perspective. You completely changed my view on this. Thanks for the info

I would like to circle back on this. an LP is simply a pool of bears at a price that can be traded willingly. think of it as a buyer of last resort. there is always the OS floor, so we always have a seller of last resort.

the problem with many liquidity pools is they are not seeded well enough. It will need to absorb any heavy selling. BUT price is dynamic, so it wont just drain at 1 price.

The Liquidity pool provides an exit for people without constantly undercutting the floor.

They also will not be losing any OS fees. Sure there are sushiswap fees etc…

Will arbs exist, yes,. And the people who capitalize on those arbs are not bad they are helping provide efficient markets.

The Buzzed Bears essentially become the buyer of last resort as the main LP provider. Constantly sweeping floors for no gas and earing tokens as staking rewards.

NFTX is moving faster on add ons and interface. I think they are actually going to try to fill the OS void. There is discussion of introducing sorting. Right now it is best for floor bears. Etc etc… which comes to another usage of the NFTX pool. If there is a trait NO ONE likes… the pool is the perfect place for that bear…

I am fully in favor of an NFTX liquidity pool and as I said in chat. With this in place as well as when staking comes up I think supply of OS bears would dwindle… steadily and rapidly.

My Proposal would be to buy 100 Bears from the floor at a cost of roughly 6 eth (gas included, but done at a time that is beneficial… no more than right over .01 …) and couple that with another 10 eth in the pool. I am not certain, but I think this would be enough to have a steady pool that could absorb anything necessary.

INDIVIDUALS are more than welcome to stake on their own as well of those who have uber amounts of bears. There is a way to use the tokens as access to airdrops and voting etc. the deeper and more staked the pool the better.

adds a game theory play into it. Rewards for staking or hibernating … which is better?

MAIN DOWNSIDES IMO :

IF : there is a group that wants to drain it, it is there. My assumption is after buying floor and after the time spent accumulating most people looking to DUMP are out…

IL : I don’t fully understand this, but I think the benefits to the community outweigh the IL .

IF SOME ONE HAS GOOD KNOWLEDGE ON IL PLEASE CHIME IN

NFTX Quick Explainer

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