A Deep Dive into NFTs in the DMM Ecosystem
With many wonderful developments in the DMM Ecosystem, we are happy to introduce an integral mechanism for expanding the DMM Ecosystem’s adoption while achieving its core vision: Decentralized Asset Introducer Non-Fungible Tokens (NFTs for short). This blog post will focus on the inner workings of these NFTs and how they will affect the ecosystem.
What are NFTs, and How do they Function in the DMM Ecosystem?
NFTs are ERC-721 tokens that, until now, have been used to represent digital art. Unlike their current use case right now, NFTs in the DMM Ecosystem will serve a unique purpose. NFTs in the DMM ecosystem are a digital representation of being an asset introducer for an underlying country block. These NFTs will serve two vital purposes: produce financial stake for each asset introducer (while also lowering the circulating supply of DMG), and give principal and affiliate members the ability to introduce assets. Being an asset introducer in the DMM ecosystem will grant country blocks a specific permission — the ability to draw down funds behind mTokens. Inherently, these NFTs function as franchise rights for the ecosystem, so those who believe that DMM will accomplish its desired goals should want to acquire these NFTs early.
All principal and affiliate members or people who wish to become asset introducers must do two things. 1) Own an NFT for your specific region 2) Have the DAO vote to allow you to draw down funds, therefore “activating” your NFT to perform its functional use. Since NFTs are finite, as the ecosystem grows, we believe these NFTs will increase in value and lock up more DMG from the circulating supply. It is beneficial for those who want to become asset introducers to do so early before larger financial institutions join the ecosystem as principal or affiliate members.
NFT Sale and Economics
The simplest way of obtaining an NFT is by purchasing it outright. The system is designed to incentivize early participation by applying a linear discount over 18 months. At the time of writing, the discount is marked at 90%. Meaning, if you purchase an NFT nine months after the system’s launch, there’s only 50% of the discount left, leaving you with a 45% effective discount (50% of 90%, equals 45%). Secondly, users will be able to stake mTokens to get NFTs (with staking being released in a patch, shortly after launch). To do this, users will stake a specified value of mTokens for a selected period of time. The primary benefit of staking is users will be able to amplify the discount from 90% to up to 99% (even as the discount decays linearly over time). These mechanisms will incentivize users to participate earlier in the NFT ecosystem and move large amounts of DMG out of the circulating supply.
The emphasis and longevity we are placing on this system cannot be understated. We foresee having 50 million DMG tokens locked in this system over the medium term and roughly 100 million DMG over a longer period of time. It is important to note that there is currently no way to destroy an NFT and retrieve the underlying DMG. Over time, depending on how each NFT owner acts and performs, the DAO will decide how to revoke an NFT and unlock its underlying DMG under extenuating circumstances.
The Foundation’s Tokens
Upon each user acquiring an NFT, we will price match them using the locked tokens from the incentive bucket to amplify the DMG backing each NFT. This does a couple of important things in tandem:
- Increase the value of each NFT as well as the financial stake behind each one
- Reduce the future circulating supply. By taking tokens that are currently locked by the DMM Foundation and keeping them locked, they are prevented from touching circulation
Why is this important?
NFTs are an essential addition to the DMM Ecosystem. They are a conduit for increasing adoption and bridging the world of DeFi to the legacy financial system. Inherently, the DMM ecosystem aims to offer cheaper and broader access to credit than what is currently being offered globally by legacy finance. We built this system to have an impact and bridge the gap in financial inclusion.
Not only will the increase in the quantity of asset introducers positively affect DMG holders (circulating supply will dramatically decrease), but the ecosystem will also be further impacted by token burns, which should increase dramatically upon each new asset introducers’ assets and their surplus of interest.
A Sneak Peek of How NFTs will Look:
The graphical representation of the NFTs resembles cards with the flag of the country on it, with visual flair to denote a principle or affiliate. Each NFT will also have a unique identifier and a serial number that determines the order in which the NFTs were minted. Newer ones having higher serial numbers and older ones a lower one.
About DMM
DeFi Money Market (DMM) is an ecosystem built on the Ethereum blockchain that bridges interest-generating real-world assets into the Decentralized Finance (DeFi) ecosystem in a transparent, trust-minimized, overcollateralized, and permissionless manner.
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