BootstrapNFT

The above is the main sign of BootstrapNFT.
It is the main Logo of BootstrapNFT on a white background.
It is the main Logo of BootstrapNFT on a dark background.
More logo versions to display.

Inspiration

Insufficient liquidity of NFTs

The current NFT market is in a dilemma. On the one hand, new NFT projects continue to emerge, for example, celebrities and big brands launch NFTs; on the other hand, each NFT project would have tens of thousands of NFT works, and every NFT transaction depends on matching a single buyer to a single seller, which causes the extremely low liquidity of NFTs.

At the same time, due to the uniqueness of NFT assets, there are also great differences between the same series of NFTs, and transaction decisions are subjectively affected. Popular NFT models are widely sought after, while ordinary models are unpopular, further resulting in poor liquidity of most NFTs.

NFT overtop initial price

In the NFT space, speculation-based pricing is undoubtedly a real issue. Many projects don't have enough value to justify high prices. Instead, they rely solely on "influencers" to drive prices up. This leads people to invest in such projects due to the fear of missing out caused by the FOMO mentality. When the boom fades, they will only lose everything.

For users who have not yet entered the market, the threshold for purchasing an NFT with a few or dozens of ETHs is too high. Most people cannot afford to buy high-priced NFTs, let alone build NFT investment portfolios. This makes NFTs exclusive for the whale.

A real community creator will do initial pricing at a reasonable level.

What it does

BootstrapNFT improves the liquidity of NFT projects by fragmenting NFTs. It allows more people to trade NFTs at lower prices, enabling more investors to own coveted early-stage NFTs. Meanwhile, it creates a price floor by creating vTokens with similar prices, making it easier for investors to redeem the original NFT assets.

BootstrapNFT sets the initial price of NFT through a "Dutch auction", or "drop auction". Its auction price will decrease sequentially from high to low, preventing the price of new NFTs from soaring due to early speculation and hype. It helps reduce the FOMO sentiment to a certain extent and makes the initial pricing of NFT projects at a reasonable level.

Overall, BootstrapNFT is an NFT liquidity auction platform, establishing a liquidity market for NFT projects and conducting a "Dutch auction" (the auction price decreases in order from high to low), which enables healthy and stable price discovery of NFT assets.

Any issuer with an NFT can build a vault and mint a fungible ERC20 token (vToken). After the NFT fragmentation, the issuer can establish a liquidity startup pool and set the weight of the custom liquidity pool, which can be either linear or exponential, so as to adjust the value of the token and prevent the new NFT prices from skyrocketing caused by early speculation.

The BootstrapNFT project attempts to solve the chaos in the NFT market such as opaque pricing and robot preemption so that people would have enough opportunities to participate in transactions at fair prices.

How we built it

Vault creation

Any project can create a vault for any NFT asset on Ethereum to lock the NFT aggregate assets pledged (deposited) by the users.

Mint vToken

Any player can deposit eligible NFTs into the corresponding vault to mint alternative NFT-backed tokens called "vTokens". vToken represents a 1:1 claim to a random NFT from within the vault (1NFT=1vToken).

Create a smart pool

Projects can use their minted vTokens to create a liquidity market for other users to trade. It allows projects to customize the weights of their funding pools. For example, a 90/10 liquidity pool can be created, in which 90% of the liquidity pool is vToken and 10% is reserve assets (such as USDC, ETH, etc.). As liquidity and trading volume build-up, the NFT-backed vTokens enter a price discovery phase and discover the "floor price".

Initial price discovery

BootstrapNFT constantly changes the weight of each asset in the pool. The weight is dynamic and changes over the lifetime of the token sale. It keeps changing based on the programmed direction. For example, a sale that lasts 3 days, goes from 90%/10% vToken/USDC to 10%/90% vToken/USDC.

In the process of lowering the price, bidders will successively buy vTokens at a fair price. In a well-structured sale, the upward pressure on buying offsets the downward pressure on the pool, resulting in a price equilibrium. The initial price is determined by the lowest price in the Dutch auction. BootstrapNFT is helping establish a reliable initial price discovery for NFTs to make them more widely applicable to decentralized finance on Ethereum.

Redeem NFT

Targeted redemption The specific NFTs are targeted-redeemed from the vault by paying a targeted redemption fee (usually 5%, 1.05 vTokens). You can also go to the liquidity pool to exchange and redeem without vToken.

Random redemption Enter the amount (integer) you want to redeem and approve the BootstrapNFT contract with a low or no fee. Once the approved transaction is confirmed, you can randomly redeem the desired amount of NFT from the vault.

Challenges we ran into

Technical Security Parameter Settings

Contract deployment security issues are a challenge for us. Polygon, which is most similar to the Ethereum network but offers greater scalability, low gas fees, and faster transactions, will help BootstrapNFT better serve the NFT market and provide the NFT market with increased liquidity.

Market Facilitation and Wider Adoption

The project is currently in its early stages and requires more marketing and branding to promote the project's implementation and adoption.

NFT Diverse Standards Compatible

There are various forms of NFT, which are based on its underlying standards, for example, the common standard protocols in the Ethereum network are ERC-721, ERC-1155, etc. As an NFT liquidity auction platform, it will be a major challenge for the project to integrate the maximum range of standards.

Accomplishments that we're proud of

BootstrapNFT provides the NFT founding team and the wider community with the advantages of:

high liquidity

Fragmentation increases the liquidity of NFTs by allowing more people to trade NFTs at lower prices. At the same time, users do not need to match a single buyer to a seller following traditional NFT transactions. Smart order routing means that users can obtain vTokens at lower slippage prices and redeem NFTs at any time, thereby improving the liquidity of NFTs.

high fairness

Continued downward pressure on prices discourages users/bots from front-running and bulk-buying, giving people ample opportunity to participate in the trade at fair prices, which naturally leads to fair and equitable distribution.

Stable price discovery

It is optimized for small orders so that large quantities bought by whales cannot affect the price. A well-liquid startup pool is able to accommodate a lot of buying and pull back before other potential buyers join. The price volatility is minimized for a healthy and stable price discovery process.

What we learned

By driving the BootstrapNFT project, we have been deeply involved in the NFT market and have learned how NFTfi projects currently operate and the shortcomings that exist. On the technical side, we learned about Mumbai Testnet's contract deployment and related testing.

What's next for BootstrapNFT

Milestone： Development of NFT fragmentation functionality; Development of NFT initial price discovery functionality; The application test network goes live on September 30; The app will be launched officially on November 30; More NFT collections onboarded and partnerships established; More early-stage NFT projects & communities enabled initial price bidding; Fully enhanced BootstrapNFT startup pool liquidity; Most extensive initial pricing platform for NFT projects.