A New Path for NFT Fractionalization: Flooring Protocol | TKX Weekly

TKX CAPITAL
3 min readNov 17, 2023

by @Guaaronnnn
editor @uuwagyuu
sponsor TKX CAPITAL

The NFT market is struggling, with sales dipping and not as much excitement. Previous attempts at NFT fractionalization didn’t take off because the fragments were illiquid and didn’t reflect the true value of the NFTs, and standardization was a challenge. Now, Flooring Protocol is drawing interest by solving these issues, suggesting a brighter future for NFT fractionalization.

Introduction

Flooring Protocol, built by @FreeLunchCapital, who is an NFT whale, reinvents NFT fractionalization to boost the market’s liquidity and expand access within the NFT marketplace. This platform transforms NFTs into µTokens, easing the way for more people to share in well-known collections such as CryptoPunks. Users can put their NFTs into a Vault for basic fractionalization or a Safebox to maintain the rarity of special NFTs. With its native FLC token, the protocol supports earning through yield farming and participating in governance.

How it works

Vault and Safebox

Vault: The Vault in Flooring Protocol is a secure storage option for NFTs. Users can deposit their NFTs into the Vault, relinquishing sole ownership and receiving µTokens in return. These µTokens are pegged to the floor price of the NFT project, making them a representation of the NFT’s value. Vaults are designed for users who are open to fractionalizing their NFTs and don’t mind giving up full ownership.

Safebox: The Safebox, on the other hand, allows users to maintain ownership of their NFTs while still benefiting from µTokens. To use a Safebox, users stake FLC (Flooring Lab Credit) and deposit their NFT into it. They receive µTokens and a unique safebox key in return. This key captures the premium of rare NFTs above the floor price. Safeboxes have an expiration period, and users can renew their Safebox keys to extend their duration, ensuring an ongoing and dynamic ecosystem within the protocol.

µTokens

When an NFT is deposited into Flooring Protocol, it’s broken down into a million µTokens, which brings even blue-ship NFTs from collections like CryptoPunks within reach of regular investors. These µTokens are tied to the collection’s floor price, ensuring a stable and fair value. They’re also ERC-20 tokens, making them as easy to trade as regular crypto. When it comes to redemption, µToken holders can exchange their holdings for a floor price NFT from the associated collection, selected randomly, ensuring a fair trade based on the underlying asset’s value.

Flooring Lab Credit (FLC)

FLC, or Flooring Lab Credit, is the native token of the Flooring Protocol. It serves multiple purposes within the ecosystem. Users can acquire FLC through various means, including expired safebox auctions, liquidity mining rewards, giveaways, and exchanges like Uniswap or Flooring Protocol Trade. FLC can be staked to open a Safebox or renew a Safebox key, extending its duration. Additionally, FLC offers access to VIP privileges, earned through staking, which provide benefits related to safebox time equity.

Thoughts

Flooring Protocol sets itself apart by seamlessly merging NFT fractionalization, ERC-20 token trading, and well-thought-out tokenomics. It not only splits NFTs into μTokens but also uses Uniswap V3 to foster a liquid market for these tokens, allowing for a smooth value transfer to the ERC-20 token sphere. The protocol addresses the issue of valuing rare NFT traits through its dual deposit model — offering both Vault for immediate liquidity and Safebox for retaining value.

Summary

Flooring Protocol is making waves in the NFT sector by revamping fractionalization to address liquidity and accessibility challenges. Developed by @FreeLunchCapital, it turns NFTs into tradeable µTokens, democratizing ownership of coveted collections. The platform offers two innovative storage options: the Vault for straightforward fractionalization, and the Safebox, which preserves the value of rarer NFTs. Its native token, FLC, further enriches the ecosystem by enabling staking, yield farming, and governance. By integrating with Uniswap V3, Flooring Protocol ensures smooth trading of µTokens, solving the issue of pricing rare traits and promoting a liquid and inclusive NFT marketplace.

Reference

https://www.flooring.io/collections
https://docs.flooringlab.com/flooring-protocol/introduction/getting-started

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