New feature: Inkify - Liquid NFT's - Your All in One DeFi Community

New feature: Inkify - Liquid NFT's

Piptoctopus

An idea I've had rattling around in my head for awhile now - unlocking the liquidity that NFT's can hold.

Inkify - Value Proposition

The ERC721 standard enables NFT's (Non-Fungible Tokens) to be created as digital collectibles - but it also enables physical products to be "digitized" and therefore ownership rights of the physical to be assigned to the digital copy, all transcribed and signed on a distributed ledger.

Liquidity

By design, NFT's are non-fungible (it cannot be split into smaller units) like ERC20 tokens.

If you want to sell an NFT it is a 1:1 swap and you get the whole token - but what if you want to release a % of its value, not the whole amount?

Inkify dApp

Deposit your NFT + any notes to be transcribed to token i.e. Assigned Rights, attachment to legal documents etc.
Set amount of ERC20 tokens to be minted in ratio to NFT i.e. 1:15000
Name your new ERC20 token
Set rules i.e. lock up of % of tokens etc

Contract Rules

The NFT remains locked in escrow - the owner can only unlock the NFT if they send the TOTAL amount of minted tokens to the escrow contract.

Each token represents a % of NFT ownership.

Thoughts?

GGCrypto

This idea is growing in popularity for the rare, expensive NFTs and is currently possible using NIFTX. It takes it a step further by offering a built in market for buying/selling shares and attempting to buyout other holders. It might be easier to just integrate their platform than trying to recreate it.

https://github.com/metalithio
https://landing.niftex.com/

Piptoctopus

GGCrypto nice I didn't know this solution existed

DelinquentMind

The concept of being able to collateralise an asset on chain is gaining popularity and makes a lot of sense. You can get the liquidity when you need it, and then give it back when you don't. You pay interest or a service fee for the service.

You could mint a token like you say if you want to split ownership, which would only make sense in certain cases. Otherwise, you could just borrow USDC etc against its value. Of course, you would be exposing yourself to liquidation events, and perhaps the market for certain NFTs is illiquid so you'd need to think about how to handle it. In general though it's a solid idea and makes a lot of sense.

I can actually give you an example. I'm a long term holder of VeChain, and in that ecosystem there are X-Nodes. These are NFTs that were minted shortly after mainnet was launched for early holders of a certain size. They grant you a share of bonus 'gas' (VTHO) generation from a locked pool. Hence, the XN represents a share in the future generation of gas from that pool. I would like to have liquidity against this, but at the moment it's not possible in the VeChain, but that will most likely change soon. I am sure that must be loads of these kinds of situations.

YCEO1

I love this idea. Another way we can create more liquidity is to wrap NFTs. Wrapping the NFT will give it an ERC 20 standard while providing liquidity and establishing a base floor price for the NFT. This brings the NFT to live and gives it much more use case. Collateralize a portion of it to borrow an asset, sell a portion of the NFT, or stake a portion to generate yield. The abilities are endless once it gets accepted.

Piptoctopus

So in essence this is the same thing - you would create ERC20 representatives of the ERC721 token (NFT) - as many as you like i.e. 100, 100k, 1m etc - which "inkifies" the NFT.

The NFT remains locked, but it's now liquid. To move the physical (well, digital) NFT to another wallet all of its ERC20 reps, need to be held in a wallet as a key to unlock the NFT.

YCEO1

Piptoctopus Gotcha, I believe it will be a great addition to the platform.