The $NFT Token
The $NFT token is the governance and utility token that powers NFT Protocol.
$NFT is required to participate in NFT Protocol governance at gov.nft.org & https://snapshot.org/#/nft/all, is used to calculate protocol fees and reward and incentivize protocol users.
The function of NFT Protocol governance is to assist in making project and product development decisions, approve expenditures from the $NFT governance pool towards the success of NFT Protocol, and manage the distribution and allocation of protocol revenue.
Beta Phase - Phase 1
The NFT.org DEX (v3) is currently in a public beta phase.
The goal during Phase 1 of our plans for the $NFT token this year is to incentivize early adoption and liquidity provision, increase $NFT token distribution, build a foundation for long term viability of the protocol and reward existing $NFT token holders.
NFT Protocol governance has approved funds from the governance pool to be allocated towards a liquidity mining program which will run the duration of the beta phase of the NFT.org DEX. During this period Ethereum addresses which create a swap containing 1 or more NFTs (on either side of the swap) that is taken on the NFT.org DEX will be eligible to claim $NFT tokens when the program claim window opens upon culmination of the beta phase. $NFT tokens from the program will be allocated on a “per swap taken” basis - i.e., the token pool for the program will be divided by the total number of qualified swaps taken during this three month period and each address will be eligible to claim a number of tokens according to how many qualified taken swaps were created by each address. NFT Protocol governance has approved up to 1.5 million $NFT tokens to be allocated towards this program, but the size of the token pool for this program will ultimately be determined by the NFT Protocol core team. If upon analyzing DEX usage data after culmination of the beta phase the core team feels more than 1.5 million $NFT tokens are required to serve Phase 1’s goals the amount exceeding 1.5 million $NFT will need to be approved by governance. More details on this program can be found on the NFT Protocol governance forum here.
Protocol Fee Rewards
Any $NFT token holder who holds tokens throughout the beta phase AND participates in at least one governance action during the beta phase will be eligible to claim a portion of the protocol fees gathered throughout the beta phase.
The lowest quantity of $NFT held by a given address throughout the beta phase will be used as the basis for this calculation.
For example - token holder A holds 30,000 $NFT when the beta phase begins but sells 10,000 $NFT during the beta phase and finishes the beta phase holding 20,000 $NFT. Token holder A would thus be considered to own 20,000 $NFT in the total pool of eligible $NFT tokens. If the total pool of eligible $NFT tokens is determined to be 1,000,000 $NFT tokens, token holder A will be eligible to claim 2% (20,000 / 1,000,000 = .02) of the protocol fees gathered throughout the beta phase.
We are targeting Q4 2022 for a v3.1 launch and beta phase culmination which will mark the end of the liquidity mining and protocol fee rewards programs.
Beyond Beta: v3.1 of the NFT.org DEX - Phase 2
The long term success and viability of NFT Protocol, the NFT.org DEX and the $NFT token depend largely upon adoption of the protocol and platform and their ability to generate revenue.
It is for this reason that v3.1 of the NFT.org DEX will include a programmable fee structure. A programmable fee structure will not only permit a more dynamic, value-based fee structure, but also allow the fee structure to be adjusted as needed to ensure the success and viability of the protocol and platform and support the value of the $NFT token.
In this way the launch of v3.1 of the NFT.org DEX will represent a shift away from the focus being on increasing $NFT token distribution and towards building revenue potential and thus new opportunities and mechanisms for $NFT token holders to participate in governance, approve expenditures from the governance pool and manage protocol fee distribution and allocation.
v3.1 of the NFT.org DEX will also mark the first phase of vertical integration with the Blockparty platform. Phase 2 of our plans for the $NFT token will thus include additional utilities and incentives for Blockparty creators using NFT Protocol.