The recent months have witnessed an exponential growth of NFT-based financial services. Trading and swapping NFTs, utilizing them as collateral, and speculating on NFT perpetual exchanges have become the norm. Such unprecedented growth has necessitated a robust NFT ecosystem, with adequate liquidity to sustain the underlying financial activities.
The sustainability of NFT liquidity, much like DeFi and fungible ERC20 tokens, is intrinsically linked to the incentivization mechanisms employed. As such, the emergence of leNFT as a potential solution is something we are very excited about!
The case for sustainable NFT liquidity
leNFT is creating an NFT-fi application that employs the inflation of its protocol token, LE, to provide LPs with a sustainable incentive. The platform will start by offering two products: NFT AMM and NFT Lending Market.
The NFT AMM leverages a concentrated liquidity model to ensure the most efficient liquidity utilization. It's highly customizable, allowing LPs to set their own price curve, customize their fee, and even participate in single-sided LPing. The LP token is an NFT that can be staked into the pool's gauge.
The NFT Lending Market provides instant liquidity via a peer-to-pool architecture. It supports multiple assets per pool (such as the NFT Bluechips pool and the Yuga Labs pool) and offers permissionless pool adding. The LP token can also be staked in the pool's gauge.
To incentivize LPs, leNFT uses a liquidity gauge system that directs $LE inflation according to the votes of veLE holders. Users can receive veLE by locking LE and besides being able to direct liquidity they get shares of the protocol's revenue which is fully directed towards $LE lockers. The revenue originates from lending market liquidation fees and AMM trading fees, which are taken as a cut of the fees set by the LPs.
What are the next steps?
While we haven't set a launch date yet, we're targeting a late May launch date.
On launch day, users will be able to purchase the Genesis NFT token, which celebrates the birth of the protocol and provides LE rewards, an LTV boost on the lending platform, and access to exclusive features. You can read more about it here.
We'll be closely monitoring the TVLs of the protocol's pools after launch and adjusting safeguards as needed to ensure that they continue to grow safely. Additionally, we'll be paying close attention to the liquidity of the LE/ETH pool supported by the Genesis Mint and rethinking our LM strategy based on that data.
We will be working closely with aggregators in order to make sure leNFT is integrated and its liquidity can be tapped regardless of the venue users use to trade.
A complete overhaul of the branding and UI is underway, with the aim of creating a more user-friendly and streamlined experience.
A final message
We would like to express our gratitude to our community for their unwavering support from the very beginning. Whether it was offering feedback, typing the obligatory morning ‘gm’, or lending a helping hand, we appreciate you being there for us. We believe that our best is yet to come and we're excited to share it with you. Stay tuned for further updates, I'll drop the links below.
Cheers,
piggydev