NFT Keys Unlock Access to Proxy Vault Rewards
Establishing Utility for the BTC Proxy NFTs
10000 NFTs were created in early 2022 to commemorate the partnership between BTC Proxy — Blockchain.com — Alphabit and the minting of 125 $BTCpx onto the Polygon Network. Some of these NFTs were given away for marketing purposes and incentives for the community but the majority remain in the custody of the protocol.
Now, they have been given their utility. These NFTs are KEYS to vaults that will contain 1 or more assets that the key holders will have access to claim.
KEYS can be obtained by using 100 USDC whereby the vault contract will take that 100 USDC and swap it on the Quickswap PRXY/USDC pool for PRXY tokens at the market rate. This mechanism is meant to have a price impact on the PRXY token for each NFT Key purchased. The contract will deposit the purchased PRXY tokens into the vault and the NFT Keys are sent to the purchaser so they can stake it to claim the tokens in the vault at a setRelease rate.
The setRelease rate is an admin function in the contract that will distribute 10% of the assets in the vault and distribute that rate to all stakers of the Keys. Rewards are claimable in real time per block. A 10% setRelease is not the same as the APY as setRelease is related to the NUMBER of tokens in the Vault and not its value. Therefore, if the price of PRXY tokens increases due to the purchase of Keys, the APY would become higher than the 10% setRelease rate due to the price inflation from the changing ratio of the USDC and PRXY tokens in the Quickswap pool.
The Vault will lock up 9 PRXY tokens for every 1 token that is setReleased therefore, it is a highly beneficial tokenomic model that will create inflationary price pressure and deflationary circulating supply.
The setPrice is an admin function that sets the USDC cost to purchase the NFT Key. The higher the setPrice the more impact it will have on PRXY token price. Initially, setPrice is proposed to be set at 100 USDC. Since the price of the PRXY reward tokens will be impacted with each new Key purchase we have attempted to quantify the projections in Table 1. As new NFT Keys are purchased it will have a 0.36% impact on the price of PRXY token which will in turn affect how many PRXY tokens will be added to the vault. The increasing PRXY price would decrease the number of tokens being added by each key purchase but increase the reward rate for each staker according to the table.
Multiple Token Rewards Inside Vault
SetRelease % can be applied to all tokens that are placed in the Vault allowing more than one token to be used as rewards. A 2nd token can be used to provide additional rewards to existing stakers or to incentivize the early stakers. Early stakers can benefit by setRelease since it will allocate the same % of a 2nd reward token to the smaller number of early participants while the reward is large. The reward amount of the 2nd token will eventually become smaller per key holder as it becomes diluted amongst a larger number of participants as the campaign continues. Since the 2nd token is not constantly being supplied like the PRXY token it will eventually become depleted.
A proposal of an additional 1 BTCpx can be deposited into the vault or used in an airdrop as a reward to incentivize early adoption and to reach of our target of 2500 participants.
Under setRelease all KEY stakers can receive multiple token rewards.
NFT Series 9000+ will not be eligible for this campaign at this time to ensure integrity of the rewards. They will be considered for eligibility once campaign sees some traction.
In Conclusion: Protocol Benefits of using NFT Keys
- NFT Key purchases increases the supply of PRXY tokens in the Vault and increases the reward rate to the stakers through setRelease
- NFT Key purchases decreases the supply of PRXY tokens in the Quickswap PRXY/USDC pool creating inflationary price pressure of the PRXY token
- NFT Keys can achieve a secondary market value which can be traded and sold amongst collectors in marketplaces such as Opensea
