Overview
Fungify creates CNFT-CFT pooling infrastructure and let's you easily host a pool for your CNFT project, unlocking extended utility for your CNFTs.
Introduction
Fungers first and foremost like to have fun. We also like Cardano, Plutus, and CNFT-CFT pools; a foundational component required to advance CNFT capabilities. The Fungers will make possible CNFT-CFT pooling.
We see CNFTs having value far beyond the art commonly associated with them. We see them as ownership in the metaverse, access to exclusive communities, rights to content, shares of digitally native organizations, and more.
Problems
Communities/DAOs on Ethereum have started favoring more limited access, granted by NFT ownership, to foster more productive conversations and exclusivity. Having a smaller number of contributors, although still enough for proper decentralization, with a larger financial stake in the success or failure of a community, is becoming a preferred organizational structure. See BAYC, where the price for full membership is more than a hundred thousand USD. Art collections, such as unsigned_algorithms, have enjoyed increases in both popularity, and price tag. Yet, these highly valuable assets are not sufficiently liquid and difficult to obtain an accurate market price for. Thus, rendering them largely incompatible with most DeFi protocols and limiting their ability to earn yield. High prices also prevent smaller players from getting involved.
Solution
CNFT-CFT pools present a solution to the above problems. A CNFT-CFT pool works by locking a CNFT into a pool, specific to that CNFT’s project, in exchange for fungible pTokens. pTokens represent a claim to one of the CNFTs in the pool, and can be redeemed for a CNFT contained in the same pool.
pTokens can be traded on any open market, such as SundaeSwap, where the price will be discovered through arbitrageurs. The price reflects the "floor" of the project. CNFT holders can convert their CNFTs to pTokens through the pool and sell them at this price for immediate liquidity. The liquid market allows CNFTs to be used as collateral for loans. Liquidity providers for market making pairs can earn yield on their pTokens. People can buy fractions of CNFTs represented by pTokens to track a project like an index fund. Assets of the same type can be easily swapped for another, a common use case in the metaverse, where certain quests require certain items.
To summarize, CNFT-CFT pools are a key component required to expand CNFT capabilities and will enable people to do the following:
Earn yield on CNFTs
Have access to immediate liquidity for your CNFTs
Use CNFTs as collateral for loans
Invest in indexes of CNFT projects
Swap CNFTs of the same type effortlessly
Become fractional holders of CNFT projects
Fungify
Fungify lets anyone easily set up a CNFT-CFT pool for their CNFT project, or release their project through it, enabling the above functionalities.
Pools can be created for existing projects, with a recommended initial seeding of 10-20 CNFTs in order for incentives to align for liquidity providers. It could make sense for existing communities/DAOs to seed and grow their own pools to extend the utility of their CNFTs. A CNFT-CFT pool launch works by locking all CNFTs to the pool and airdropping/selling the fungible pTokens.
For V1, there will be a default 5% fee when adding and retrieving from a pool. Fees will be sent directy to a farming script for liquidity providers to collect as yield.
Interested in becoming a Funger? Want to Fungify your project? Have questions?
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