Excited to announce that we've partnered up with @nftperp to launch a yield farm for their upcoming collection, Mafia Nuts, after the collection's art reveal π₯
β€,π & Comment "Farm Deez Nuts" for a chance at a Mafia Nuts WL
Keep reading to learn about NFT Yield Farming π§΅π
(1/14) What is NFT Yield Farming?
Yield Farming is the best way to have your NFTs work for you πΈ
NFT collections that want to enhance their liquidity incentivize their holders to provide liquidity by compensating them with more NFTs π
How does it work β
(2/14)
π‘ Users provide NFTs & ETH which are automatically deployed in a @caviarAMM liquidity pool
βͺ For providing this service, users are compensated in two ways:
1οΈβ£ Receive trading fees, earning 1% each time someone trades in the pool π±
2οΈβ£ Receive yield farming rewards πΉ
Yield farming allows projects to reward users that are providing liquidity for their collections by continuously giving them tokens for a defined period of time
I.e. it is a way to trustlessly improve liquidity π
(2/13) How does it work?
1οΈβ£ Collection team deposits NFTs into a yield farm
2οΈβ£ Holders provide liquidity using their NFTs from the collection + ETH
3οΈβ£ These liquidity providers (LPs) are compensated using the tokens deposited in stage 1οΈβ£ according to their share of the pool
Liquidity is the lifeblood of any NFT collection π§
Without it, prices can be volatile and sporadic, causing trading volumes to drop and even leading to the collapse of some projects π
A π§΅ thread on why liquidity is so important and why Baton is a game changer π
1/Firstly, what even is liquidity?
Liquidity refers to the cost of trading NFTs in a collection. In other words, how expensive it is to buy and sell NFTs in that collection π΅
What determines how liquid trading a specific collection is?
2/1οΈβ£ Transaction Costs e.g. royalties, gas fees, marketplace fees, etc.
2οΈβ£ Perceived riskiness of the NFT collection
3οΈβ£ Dedicated Liquidity