NFT packaging protocol Envelop Protocol

28 Jan 2023

The development status and existing problems of NFT

With the popularity of NFTs in recent years , more and more NFTs have been recognized by the market, and the corresponding NFTs have gradually penetrated into many scenarios such as games, art, music, copyright, and the metaverse. The successful emergence of NFT has also led many traditional Internet giants to layout the field of NFT. However , the development of NFT is still immature at present, the infrastructure based on NFT is still incomplete, and the market still lacks information on the valuation of NFT and a series of indices.

The main problems in the current NFT field:

1. The depreciation phenomenon caused by the inability to assess the value of NFTs . Most of the NFTs have no real value support, so that the interests of buyers cannot be guaranteed and may suffer losses.

2. The liquidity of NFT is insufficient. Insufficient liquidity makes NFT priceless in many cases, and there is still a certain lack of NFT market circulation.

3. Creators cannot pre-set royalties, which is at a disadvantage for NFT creation.

Envelop Protocol changes the existing NFT market landscape

Envelop Protocol is a collateral-backed and price-discovery NFT wrapper and cross-chain protocol that primarily provides intrinsic value and liquidity to NFTs . Envelop Protocol mainly realizes the value discovery of NFT through Oracle , index and protocol. Through token stacking 2.0 and micro Dao architecture, holders can share the expenditure and income of related DAO , so as to reshape and Change the existing NFT trading and market landscape.

The main process of Envelop Protocol

Envelop Protocol mainly combines NFT metadata, mortgage assets and set smart contract conditions to synthesize and package NFT assets into wrapped NFTs . We can regard wrapped NFT as a smart contract, transfer and unpack corresponding asset packages through internal protocols of the contract, so as to form the value support of NFT.

NFT structure after Envelop packaging

Ordinary NFT is mainly composed of two parts, namely metadata and newly generated Token , which are packaged to form a token, thus forming the well-known NFT asset. The NFT generated through the Envelop protocol consists of three parts, which are metadata, mortgaged Token assets and smart contract conditions, which brings more expansion methods to the NFT.

NFT value support. The main value of the packaged NFT is the added value of the NFT itself and the value of the mortgaged assets. The added value can be regarded as part of the premium behavior, and the value of the mortgaged assets is the floor price of this NFT . NFTs can be used for mortgage assets. During the packaging and unpacking process, once the price of NFT is lower than the value of the mortgaged assets, investors can unpack and carry out corresponding arbitrage operations, so as to maintain the price of NFT in the market .

Envelop Protocol provides price oracle to NFT, through which the valuation of collateral assets can form the overall valuation of NFT, thus forming the pricing rules of NFT, expanding the trading activity of NFT in the market.

The NFT index can establish a complete index system through the corresponding price monitoring of the wrapped NFT , so as to regulate the transaction behavior of the existing NFT market and promote the healthy development of the NFT market.

The advantages of setting royalty and Smart-Condition

Smart contract conditions can add specific conditions when NFT is generated, such as corresponding NFT transaction royalties. NFT creators can obtain NFT value-enhancing dividends by charging a certain " handling fee " during the NFT transaction process . When the NFT price rises sharply or When frequent transactions occur, NFT creators can obtain corresponding profits.

Transaction royalties are very important for NFT creators and packagers. Although the value of most ordinary NFTs cannot be estimated, and the transaction volume and price are generally not high, it is different for NFTs packaged by Envelop . There is a certain amount of crypto assets as collateral, so it has a certain value in itself. When this part of the mortgage crypto assets rises, then the value of the packaged NFT will also rise.

By setting the form of royalties, in fact, to a certain extent, it brings the dividend of the increase in the price of the mortgaged assets to the NFT creator packager, so this will prompt the creator to actively package potential value assets in the NFT .

For Envelop , the most common feature is the royalty condition, that is, a part of the tokens paid to the initial creator during the transaction process as transaction tax, which can maintain the creator's motivation for creating nfts and also maintain the market development heat.

Of course, creators can set other more intelligent conditions to meet different application scenarios, such as art, music, games, metaverse and other scenarios, so as to further expand the application market, such as building NFT -based IDO market etc.

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