We are an anon, self-funded team that has started to sweep floors with a plan to market make for the NFTX marketplace. (see details of our first acquisition below)
We are requesting a modest amount of ETH to cover gas costs for seeding liquidity on NFTX.
At NFTX’s launch, well over 100 floor CryptoPunks were acquired by the treasury, creating a moat for NFTX that very few projects can compete with.
NFTX has since added many of these Punks to the PUNK vault, providing a liquid and successful marketplace for buyers and sellers.
Unfortunately, in instances where NFTX or the community have not been able to provide significant inventory (see BAYC), the vault enters a negative feedback loop where volumes dry up along with fees, giving very little incentive for others to add inventory. This results in the vault becoming dormant.
While in some instances the community/developers will seed the vault themselves with great success (see PURR), this type of activity will be the exception and not the rule until NFTX has demonstrated what many of us already know - that it is a critical platform for NFT distribution and yield.
FloorDAO aims to solve this by acquiring assets (from minting or secondary markets) and seeding vaults on NFTX with the plan to provide long-term liquidity and/or inventory.
We want to take the lessons from PUNK and PURR and apply this to vaults with strategic importance moving forward.
- NFTX vaults need liquidity to start the flywheel of Fees + Volume => More Inventory => More Fees + Volume.
- Liquidity can be hard to come by as creators/communities do not understand the benefits of NFTX and individuals seeding the 20+ items to kickstart a vault is often financially prohibitive.
- Sweep floors to seed NFTX vaults and kickstart the flywheel.
- Seed liquidity for a minimum of 6 months, although in most cases we expect inventory to remain in NFTX indefinitely.
Today, we acquired 35 memberships to GEN.ART which will provide FloorDAO with a perpetual claim on all future mints.
This means that for every GEN.ART drop, we will be able to seed an NFTX vault with a significant amount of liquidity.
Our plan is simple, for all GEN.ART mints that we participate in:
- Create an NFTX vault
- Seed 25% LP liquidity (subject to change)
- Seed 75% single-sided liquidity (subject to change)
- Increase LP liquidity as market stabilizes and IL risk reduces
- In the immediate term - a liquid secondary marketplace for all GEN.ART drops.
- In the longer term - a liquid secondary marketplace for a broader range of collections.
@ 120 GWEI the estimated cost for each seed would be:
- Mint 35 GEN.ART: 1.1 ETH
- Vault creation: 0.15 ETH
- Sushi pool creation: 0.4 ETH
- Mint & stake (9): 0.25 ETH
- Single sided stake (27): 0.4 ETH
- Approvals: 0.1 ETH
Total: ~2.4 ETH
We are requesting ETH to cover the seeding of 10 GEN.ART drops (minting the drop through to vault creation and seeding liquidity on NFTX).
Total ask: 24 ETH
Funds would be sent to a separate wallet and gas expenditure recovered after each mint to allow for clear tracking of fees.
Caveat 1: above is an upper-end estimate, FloorDAO would wait for gas prices to drop to what it considers reasonable levels before minting. Any left over gas money would be used on future mints and require less funding from NFTX.
Caveat 2: we require single-sided staking to be in place so that we can skip the 5% mint fee before we can begin seeding liquidity. In the meantime, inventory items will be minted and held in our wallet.