We are excited to announce the release of Stock Staking on NFTX, which will allow holders of NFT stock to deposit their holdings in NFTX vaults in order to receive income without the usual risks associated with liquidity offering.
We will explain what Stock Staking is, its benefits, how to become a list provider, and much more. All right, let’s start at the beginning.
The Concept of Stock Staking: What Is It?
The addition of Stock Staking to the NFTX V2 Protocol makes it possible for anybody to deposit floor-priced NFTs into a vault in exchange for a stake in the vault’s fees. This allows you to earn money on all of your forgotten ground NFTs, which you could have been missing out on otherwise.
As Stock Staking is an upgrade to the protocol as a whole, it is immediately available to any vaults on the Ethereum Mainnet that have been implemented using the NFTX V2 Protocol. Follow the link “How do I take advantage of Stock Staking?” for a quick primer on the topic, then continue reading this article to learn about the various NFTX Staking options.
Why are we implementing Stock Staking, and what are its benefits?
We have received many inquiries over the past few months concerning the potential risks associated with staking liquidity positions on NFTX. Although adding liquidity to a vault has shown to be quite profitable for a few larger players in the game, there are drawbacks to be aware of, most notably Impermanent Losses (IL). TL;DR – It would have been preferable to just maintain the NFT the more one asset of your liquidity position grows in relation to the other (i.e. ground increasing in ETH ratio).
In order to remove this obstacle for the segment of clients who are prepared to deposit NFTs into the vault but don’t wish (or are unable) to present the necessary liquidity (ETH), we have developed a mechanism called Stock Staking. With this staking option, you can sell your unused NFTs to the vault in exchange for shares and receive a dividend of up to three or four figures every year, depending on the volume of transactions processed by the vault. Once you’re done staking, you can redeem your NFTs for (around) their original amount depending on the redemption fees set by your vault. Keep in mind that there is a fee associated with redeeming NFTs from NFTX vaults, and always verify that fee on the vault details page before redeeming.
Stock Staking, in addition to its benefits for yield farmers, is expected to draw in a large number of additional NFTs to all of the currently active vaults, increasing the available choices for Market consumers to purchase and/or swap NFTs and thus further enhancing the usefulness of NFTX as the first NFT liquidity protocol.
Finally, the availability of Stock Staking to any vault paves the way for yet-to-be-launched NFT projects to leverage NFTX Vaults as a distribution and treasury mechanism, enabling a vault full of ground property to be instantly integrated into any projects that hook up with NFTX vaults, such as Gem, Genie, and other future NFT aggregators.
Modifying the protocol to include
Because Stock stakers profit from the same protocol vault charges as Liquidity stakers, there are a few key differences.
At the outset, Liquidity stakers received one hundred percent of all fees accrued throughout vault exercise (i.e. Mint, Redeem, Swap). The following are the changes that have been made:
- 80% of all charges are distributed to Liquidity stakers.
- 20% of all charges are distributed to Stock stakers.
This fee structure is finalized on a protocol level and is not vault-specific. Over the next few weeks, the core team and contributors will be keeping a close eye on the liquidity-to-stock ratio to make sure that the staking incentives are evenly distributed.
If there is only a liquidity staker, the remaining 20% of fees collected will be returned to the NFTX DAO’s coffers until a stock staker is added.
Has this been audited?
Sure, another Code 4rena competition has been run through your whole codebase. Here you will find the complete and final results:
https://code4rena.com/contests/2021-12-nftx-contest
Why can I not use the CryptoPunks vault?
In order to ensure a smooth launch, the CryptoPunks vault has been disabled for the next 24 hours. On January 21st, at 17:30 CET, the CryptoPunks safe will once again be fully operational.
Web site: https://nftx.io
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Docs: https://docs.nftx.io
Academy: https://academy.nftx.io
