Yesterday, Our product director Paul answered us some questions about the first NFT fragmentation on BSC. We did a recap of it. Let’s see what the users care and the answers!!
1. What is the significance of NFT fragmentation?
The fragmentation of NFT is the infrastructure of NFT finance. It deconstructs the previous NFT and helps to make those previously illiquid NFTs flow again.
2. Do all NFTs need to be fragmented?
Not all NFTs need fragmentation, and illiquid long tail assets will not change due to fragmentation.
3. What is the essence of NFT fragmentation?
Partial ownership tokens are a fragmented solution to NFT liquidity problems, allowing users to split a complete NFT into several BEP20 standard fragmented tokens that can be traded on the secondary market, reducing the difficulty of NFT circulation.
This “split” of NFT essentially hosts NFT in a smart contract and then issues BEP20 standard tokens based on this split. Users can price the split tokens themselves.
The new price generated by the BEP20 fragment in each transaction will be fed back to the overall NFT, that is, the price of the NFT is constantly updated with the update of the fragment price, providing a price discovery function. In addition, every time the split NFT fragment is circulated in the secondary market, a part of the proceeds will be distributed to the creator, which the author can claim to the platform as a royalty reservation.
On the one hand, NFT fragmentation reduces the participation threshold of investors, allowing more people to enter the NFT ecosystem and promote its development. On the other hand, it enhances the liquidity of NFT and allows creators to obtain more income on their works. Therefore, this is a very friendly solution for investors and art creators.
4. Which user groups does the fragmentation protocol mainly serve?
All kinds of users in the NFT ecosystem can use KACO to meet their needs.
NFT holders. Any holder of NFT works can deposit works into the fund pool in exchange for BEP20 tokens for liquidity and liquidity. BEP20 tokens themselves are also good NFT investment opportunities. Their own trading volume and liquidity ensure that both buyers and sellers can obtain fair prices.
NFT creator. NFT project developers can also create pools of funds for their respective projects at KACO. A well-liquid pool of funds is easy for users to trade and guarantees fair prices. Because of the high liquidity of the fund pool, trading for incentives can also be used as a NFT sales mechanism.
NFT Investor. Investors can easily invest in NFT through token derivatives without identifying or buying individual NFT works.
5. Can rare NFT be fragmented?
We’ve charted three paths for the rare NFT. First, he can lock the NFT to forge BEP20 tokens, which means that the user thinks he is worth a lot of money, so set the time lock. Then forged tokens can be sold until the low price to pick up. Users can create liquidity. After the time can be used to exchange the original token back to the time did not retrieve the default put to the pool for other users to exchange.
Second, rare NFTs can be auctioned in Dutch style, leaving the market to decide the price.
Third, after that, we will open up the fragmentation of a single rare NFT, allowing it to enjoy its own liquidity and users to price it themselves.
6. Can you introduce how Kaco’s NFT fragmentation protocol works?
KACO allows users to receive BEP20 tokens representing NFT projects by depositing their NFT into a pool on the kNFT dex. When you add your NFT to the kNFT dex, you deposit your NFT into the corresponding NFT project pool, and the kNFT factory will create BEP20 tokens for that NFT project, providing an equal amount of tokens for each NFT you deposit.
For example, the user has 10 Kaco Finance NFTs, 3 of which have high values. However, he believes that the value of the other 7 Kaco Finance NFTs is lower than the market price of the Kaco Finance pool on KACO. So the user casts these 7 NFTs into BEP20 tokens (KKAC), and he can sell his BEP20 tokens (KKAC) on KACO, or exchange them for his favorite NFT works in the pool, which can reduce their prices and help price discovery. The above process will continue until the NFT works reach the reserve price.
7. Can you briefly introduce the overall planning of NFT fragmentation and what big moves we are looking forward to in the next few months?
About NFT fragmentation, our first step is creating a liquidity pool to help NFT projects establish floor prices. This is also the highlight of this month, we will deploy on the BSC to help projects on the BSC, such as Alpaca, Cake, Babyswap, etc., to establish floor prices so that more NFT in hand can be taken out for liquidity. The second step later, we will go online to lock synthesis. Users can lock the rare nft to synthesize tokens, select a good time, before the end of the time, can be redeemed, if found before the end of the unwanted, it will go into the liquidity pool. In the third part, we will go online Dutch auction, if you want to auction off rare goods, here we can set the highest price lowest price, time, we will be based on the block time, linear price reduction, until the card is bought away or finished. This is some of our planning and action afterward.
About Coinversation Protocol
Coinversation Protocol is a synthetic-asset issuance protocol and decentralized contract trading exchange based on the Polkadot parachain. It uses CTOs, the issued by Coinversation Protocol, and DOTs as collateral, to synthesize any cryptocurrencies, stocks, bonds, gold or other off-chain assets through smart contracts and oracles. Users can forge a certain synthetic asset by collateralizing CTOs or DOTs, such as U.S. dollars, and automatically have a long position in the asset. Users can also convert minted assets into other assets through the trading platform, so as to realize the purpose of shorting the asset and longing other assets.
Kaco Finance is the evm version of DEX issued by Polkadot decentralized exchange and synthetic asset protocol Coinversation. Kaco Finance is a cross-chain decentralized trading platform based on Binance Smart Chain and Kusama parachain. Kaco Finance initially aims to provide liquidity AMM and yield farm for the Polkadot ecological project and is committed to realizing the asset bridging function between Kusama and BSC.