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Coinhub | How to get started with NFT fragmentation on Coinhub — Fractional tutorial

Disclaimer: Discreet investment is suggested for the risk of the market. This information doesn’t constitute investment advice. All rights reserved.

Coinhub official website: https://www.coinhub.org/

Coinhub Download link: https://www.coinhub.org/download

Introduction to Fractional

NFT fragmentation agreement Fractional.art was launched on July 27th; on August 20th, $7.9 million in seed round financing was completed, led by Paradigm. Path.eth@Cryptopathic, which owns the original photo of Kabosu Chai Dog (dog coin prototype) on Aug. 22, minted NFT fragmentation tokens NFD on Fractional.art, with an overall valuation of more than $90 million.

The NFT collectibles market has been hot all summer, and it is still hot token. although the transaction volume of NFT continues to hit new highs, compared with the traditional ERC20 tokens, the disadvantages of low liquidity of NFT are constantly exposed. Fractional solves this problem through the play of DeFi+NFT, providing NFT holders with the ability to fragment the held NFT assets, that is, dividing the ownership of NFT into ERC20 pass tokens, lowering the threshold for ordinary users to participate. And release liquidity for NFT holders, thereby improving capital efficiency.

Tutorials

Connect the wallet

Switch the Coinhub wallet to the ETH public chain, enter the discovery page, find the Fractional, and connect the wallet automatically after entering.

User role

There are two main roles on Fractional, namely, the buyer and the seller (officially defined as the curator). The buyer is the user who buys the NFT fragmented token, and the seller is the user who holds the NFT fragmentation for sale. Selling and buying fragments on Fractional is more like a 1DO process, with each publicly offered NFT officially defined as a Valut (value).

Valut pairs should have three states: Live Sale, Live Auction, Auction Ended;, in which Live Auction and Auction Ended may not occur, depending on whether the auction reserve price is confirmed.

Key indicator: RESERVE PRICE- auction reserve price / starting price

The auction reserve price of Valut is the price (in ETH) required to initiate an auction to fully obtain the NFT it contains. The reserve price of the auction can be determined at the time of the curator’s creation, but the final reserve price is determined by the weighted average of the votes of all fragmented token holders.

If only one person initiates a vote on the auction reserve price and the number of NFT fragmented tokens held is less than 50% of the total supply (or the auction reserve price is set to 0), the auction reserve price will not be set and cannot be bought out by other users. In addition, holders of fragmented tokens cannot set an auction reserve price that is 5 times higher or lower than the current weighted average.

The reserve price of the auction can only be changed by voting and is not affected by the implied valuation of the treasury based on the supply of tokens in the liquidity pool.

Examples are as follows:

If you have 100% ownership tokens and set the reserve price to 100 ETH, the reserve price is 100 ETH. But if you own 75 per cent of the tokens and the other 25 per cent of the voting rights vote at the reserve price of 50ETH, the final reserve price will be 81.25 ETH.

If you only own 49% of the supply of tokens and vote on the reserve price, but other people with the remaining 51% of tokens do not vote on the reserve price, the reserve price will not be set for the vault.

In other words, when an individual or group deposits enough ETH to reach or exceed the auction reserve price determined by Valut, the auction acquisition of Valut starts. If the acquisition is successful, the holders of all NFT fragments of Valut can convert the tokens into ETH and make a profit.

The entry of the reserve price of the auction, the details page of each Valut, the location is as follows:

Buy NFT fragmented tokens

Click Explore in the menu bar to enter the visible Valut list in the store, find the Valut you are interested in, and enter the details page to purchase. Corresponding to the three states of Valut, the purchase types are divided into the following three types:

1. Fractions- buys fragmented tokens

After the fragmentation of NFT and the seller (curator) has created the LP in UNI, the buyer buys Valut’s NFT fragmentation tokens.

The essential transaction is based on UNI’s SWAP, the purchase process is similar to the DEX transaction, there will be a slippery point, and if the input quantity is too large, there will be a hint of insufficient liquidity. Generally, for a newly opened Valut, the early token liquidity is relatively low and does not support large exchange. After entering the amount of exchange, you can see the expected number of fragmented tokens received.

2. Byout- buys out NFT

If the Valut confirms the reserve price and does not start the auction, the user can choose to buy out the Valut directly, ensuring that the bid price is not lower than the auction reserve price, that is, before the official auction starts, terminate the auction ahead of time, use the auction reserve price to buy NFT directly, and other users who have purchased fragmented tokens can convert the tokens into ETH.

3. Live Auction- auction bid

When Valut reaches the auction standard, bids can be made during the auction period, and the highest bidder can be guaranteed to bid higher than the current highest bid.

Initiate NFT fragmentation

1. Fragmented NFT tokens

Click the menu in the lower right corner to switch to “Fractionalize”. After clicking to enter, you can see the ERC721 NFT assets that currently support fragmentation. Select the NFT to be fragmented, and set the NAME name of Valut, the supply of SUPPLY tokens, the symbol / abbreviation of SYMBOL tokens, the reserve price of RESERVE PRICE, and the proportion of annual management fees charged by ANNUAL MANAGEMENT FEE to purchasing users.

After the setting is completed, click “Continue” to proceed to the next step of authorization, and the final Fractionalize confirmation, that is, complete. As the editor’s current NFT is the land of Cryptovoxels, it is not suitable for fragmented sale for the time being. You can experience the actual process on your own.

2. Add LP to UNI

This process is not complicated, just like preparing LP tokens before we go to LP mining, the key point is to get the contract address of fragmented tokens. This step is recommended to operate on PC. You can download the Coinhub plug-in wallet.

The above is the Fractional operation tutorial, the reference material comes from the official documentation, if there is an obvious error in the article, welcome to communicate and correct, and finally welcome you to download the Coinhub experience!

At the same time, you are welcome to join the Coinhub fan group to communicate:https://t.me/Coinhub_CN