A Detailed Guide for using the Chubbies NFT20 Pool

solazy.eth

Follow

Jun 17, 2021 · 7 min read

There are currently two good ways of getting a Chubbie. You can purchase one through OpenSea (or other secondary markets) or exchange one on the NFT20 pool. If you’re reading this article, chances are you are already familiar with how to buy NFTs on OpenSea. If not, there are great tutorial like this video tutorial (Chubbies was used as an example!) that walks you through how to set up MetaMask wallet and buy on OpenSea.

There are times when it makes more sense to get a Chubbie from the NFT20 pool instead of using OpenSea.

We understand the learning curve to use NFT20 is pretty steep as it took us quite some time ourselves to get a hang of it. This guide expands on the NFT20 guide for Chubbies written by the Very Nifty team and attempts to go over how to use NFT20 in more detail. The guide will use Chubbies as an example but it will work for any other NFT that has an NFT20 pool.

What is NFT20?

NFT20 is a permissionless p2p protocol to tokenize NFTs and make them tradable on decentralized exchanges such as UniSwap or Sushiswap.

Anyone with an NFT can create a new pool or add his NFT to an existing pool and get ERC20 Token derivatives of their NFTs in a permission-less way, those tokens can be transferred and traded on DEXes right away. You can also swap your NFT for anyother NFT of the same pool, no need to tokenize.

Art and NFTs are priceless. Their prices are highly subjective and volatile. When an NFT collection is hot, there will be plenty of demand and it’s very easy to sell on OpenSea as long as the price was set right. However, when the NFT collection is not in demand (it’s inevitable at times unless it’s CryptoPunks or perhaps BAYC), it will be hard to sell it because there are no buyers on OpenSea. Imagine there’s a place where you can liquidate your NFTs without needing to find a buyer. The liquidity pool on NFT20 serves this purpose.

NFT20 also allows you to own a fractional share of an NFT in the collection. For example, if you own 50 CHUBBIES20 then it means that you own 50% of a Floor Chubbie(the cheapest Chubbie). Since the Floor Price for Chubbies is cheap, this use case doesn’t quite apply to Chubbies.

NFT20 currently works well for NFTs that have their own contracts, like Chubbies. As of now, it doesn’t quite work for NFTs uploaded through OpenSea Collection Manager as they all share one single centralized contract. It will be hard to manage all OpenSea collections under one pool.

There are other similar exchanges like NFTx that provide functionalities like fractional shares and a liquidity pool for NFT projects. Chubbies already have a significant pool of more than 500 Chubbies on NFT20 and over $50,000 USD in liquidity so we are sticking to it.

What is an NFT20 Pool and what can you do with them?

The NFT20 Pool contains Chubbies that other users have deposited and you can perform different actions on it using CHUBBIES20. CHUBBIES20 is an ERC20 token created specifically for the Chubbies NFT20 Pool and it can be traded on Uniswap.

Use cases for the NFT20 pool and CHUBBIES20:

1. You can deposit a Chubbie into the pool for 95 CHUBBIES20 tokens.
2. You can use 100 CHUBBIES20 tokens to swap out any Chubbie in the pool.
3. You can swap a Chubbie with any other Chubbie in the pool.
4. You can buy directly using ETH from the pool.
5. You can exchange your ETH for CHUBBIES20 on Uniswap.
6. You can exchange your CHUBBIES20 tokens for ETH on Uniswap when there is enough liquidity.
7. You can provide Liquidity for CHUBBIES20-ETH Pair and earn rewards in $MUSE.

Note: All Chubbies are treated equally in the pool so you should only deposit Chubbies that you think are common (i.e Floor Chubbies)— not the rare ones, like a Set, Astronaut, Shiny etc. You will most probably get a better offer on OpenSea for those.

We will go over each of the above use cases in more detail below.

1. Swapping a Chubbie with another Chubbie in the pool

1. Select the “Swap NFT to NFT” toggle above.
2. In “FROM”, select a Chubbie from your wallet
3. In “TO”, select that cute Chubbie from the pool that you like better

Note: Unlike using CHUBBIES20, you can swap a Chubbie in your wallet for another Chubbie in the pool without the 5% fee and only pay a gas fee.

2. Depositing a Chubbie into the pool

You can deposit a Chubbie into the pool and in return, you will get 95 CHUBBIES20 tokens. The remaining 5 act as a 5% fee and get distributed to $MUSE token holders.

3. Buying a Chubbie from the pool using 100 CHUBBIES20

If you click on the arrows between the “FROM” and “TO” fields, it will let you change the direction of the swap (just like Uniswap). Now you can swap 100 CHUBBIES20 for a Chubbie!

4. Buying a Chubbie directly from the pool

There’s also a new feature where you can also directly buy a Chubbies from the pool using ETH without dealing with CHUBBIES20. The NFT20 platform will do all the Uniswap operations for you in 1 transaction. According to the NFT20 Team, there’s a 5% fee to it but it might be more cost-efficient since you can save on gas fees.

5. Exchanging ETH for CHUBBIES20 on Uniswap

Since CHUBBIES20 is an ERC20 token, you can directly get it from Uniswap. You can also directly click on this link to access the CHUBBIES20 Uniswap exchange page.

6. Exchanging CHUBBIES20 and change it to ETH

Similarly, you can exchange CHUBBIES20 for ETH on Uniswap. The great part about this is that you do not need to look for a buyer (compared to OpenSea). Here’s the Uniswap link.

There will need to be enough liquidity in CHUBBIES20 in order to perform this operation. Chubbies has been providing liquidity to CHUBBIES20 through ChubbieFund.

7. Provide Liquidity for CHUBBIES20-ETH Pair and earn rewards in $MUSE

You can provide Liquidity to the CHUBBIES20/ETH pair and earn $MUSE tokens.

1. Add liquidity to the Uniswap CHUBBIES20/ETH pair. You will need to provide CHUBBIES20 and ETH in order to do it. You will receive Uniswap LP tokens.
2. Deposit the Uniswap LP token you have received on the NFT20 farm page and start earning $MUSE.

From the NFT20 Lite Paper — $MUSE token serves as the governance token for the NFT20 exchange and holders will receive 5% in transaction fees collected through all NFT trades on NFT20.

The farm for CHUBBIES20 is active as of the time of the writing but it might be replaced by another more actively used NFT20 pool when the NFT20 Team sees fit.

How do the Floor Price and the token price of CHUBBIES20 change?

The Floor Price of Chubbies on NFT20 and the token price of CHUBBIES20 fluctuates with the buy and sell transactions.

From our understanding, if more people buy CHUBBIES20 tokens, then the CHUBBIES20 token price and the Floor Price (100 CHUBBIES20) of a Chubbie on the NFT20 pool go up. If more people liquidate their CHUBBIES20 tokens for ETH, the price goes down.

When is a good time to use the NFT20 pool?

You should compare the Floor Price of NFT20 and OpenSea and decide what’s best for you.

• When you see a rare and cute Chubbie in the pool and want to rescue it with the Floor Price or by swapping it with another Chubbie in your wallet.
• When you want to liquidate your Floor Chubbies quickly — unlike OpenSea, you don’t need to find a buyer.
• When you see that the Floor Price is too low and think that CHUBBIES20 can only go up.

Beware, there are a lot of bots listening to trades on the pool and might start and execute a transaction faster than you by paying a higher gas fee. You will risk losing the gas fee if a transaction fails.

Summary

There are currently 500+ Chubbies in the Chubbies NFT20 pool and the Chubbies NFT20 wallet remains the largest token holder for Chubbies.

ChubbieFund (10% of the presale) has dedicated more than $50,000 USD to provide liquidity for CHUBBIES20 and will continue to provide more liquidity when necessary, as long as there are still funds remaining.

By utilizing NFT20, you will be able to liquidate your Floor Chubbies for ETH easily. Note: the Floor Price will depend on the supply and demand mentioned above.

Are there any Chubbies in the NFT20 pool now that interests you?

Disclaimer: Chubbies is an NFT project with an NFT20 pool. We appreciate NFT20 but are not affiliated with the NFT20 team. Invest at your own risk.