KIRA & NFTs Staking

In this article we will explore Non-Fungible Tokens (NFTs), concept of re-fungibility, spending pools, token buckets and explain how NFTs can be used to generate passive income for their holders. You will also learn how NFTs interact with KIRA Network to benefit its security and discover new mechanisms that provide market access and price discovery of Non-Fungible Assets.

TLDR

• NFTs (Non Fungible Tokens) — digital representation of unique tangible and intangible assets
• Staking NFTs secures the KIRA Network through the Multi Bonded Proof of Stake consensus
• KIRA Governance defines interest rates for staking NFTs
• All NFTs on KIRA can be divided into fractional shares and treated as fungible assets
• KIRA’s Re-Fungible NFTs can be split and used for lending, trading and more
• KIRA will enable “basketing” of less valuable tokens effectively enabling creation of NFT baskets
• Upcoming campaign — farm $KEX with NFTs, or stake $KEX to receive KIRA NFTs as rewards

What are NFTs?

Let’s start from the very beginning and explain what an NFT is. The NFT acronym stands for Non-Fungible Token, that is a digital (cryptographic) representation of unique tangible and intangible assets. Such assets may represent a piece of artwork, for example, a physical painting or a unique digital art, or in-game items, such as skins, weapons or characters. Just like their original tangible and intangible assets, NFTs are distinct, meaning that they are not mutually interchangeable, or non-fungible. A majority of NFTs are currently created on Ethereum using either ERC-721 or ERC-1155 standards however newer EVM compatible networks like Binance Smart Chain are already adapting similar ERC standards for NFT support.

NFTs Today

Over the last few years we’ve seen tremendous growth in adoption of NFTs. Their ability to represent many different asset types, scarcity, collectable nature besides growth of the digital real estate market continue to establish NFTs as one of the dominant asset classes. At the same time, NFTs face challenges on the liquidity side — most are bought with a HODL strategy (similar to the real art world where buyers retain position for a few years), thus limiting trading and liquidity. Some are even acquired with the sole purpose of being burned / destroyed to increase their scarcity. KIRA’s solution to the liquidity challenge is staking or locking an NFT asset to generate passive income, while continuing to retain full custody of the NFT and ability to realize value represented by the locked asset.

Securing Blockchain with NTFs

There are natural synergies between Non-Fungible Tokens and the KIRA Network, as such assets increase KIRA security with their value, but because flow of those assets at stake is not limited KIRA Network activity increases along corresponding rewards from the network fees. KIRA’s Multi-Bonded Proof of Stake (MBPoS) consensus enables staking of NFTs by automatically issuing 1:1 staking derivatives that represent all staked tokens regardless of their fungible or non fungible asset type. Value locked into the KIRA Network vouches for honest operation of non-sybil validators which in turn increases trust in the network security and allows it to settle interchain transfers and host dApps which would not be safe to use in case of networks with low values at stake.

How does NFT Staking Work?

To facilitate NFT staking, users transfer their NFTs to KIRA Network and submit a request transaction that enables KIRA Network Governance to assign a corresponding interest / revenue rate to this asset. If whitelisted (determined that the asset brings value to the network) by the governance, NFT can be staked and its delegators can claim block and fee rewards in similar fashion as delegators do with any fungible asset.

KIRA Network Governance defines APY (Annualized Percentage Yield) for staking individual NFTs as well as their tokenized baskets. Reward rates depend on factors such as how much security / Total Value Locked (TVL) would such NFT assets contribute, as well as how much would the network’s activity increase due to their circulation and use within the network. This mechanism not only secures the KIRA Network but also induces the flow of assets into the network to optimize revenues generated by the network and all dApps deployed within.

NFT Staking Derivatives

• For every NFT token delegated, a 1:1 staking derivative (sNFT) is issued to the token holder. The sNFT is transferable and can be traded directly on the KIRA Network via an OTC swap, dedicated order books, Automated Market Maker (AMM) pools or auctions. All NFTs and their derivatives on the KIRA Network can be re-funged, meaning divided into fractional shares and treated as fungible assets, which today is not possible with traditional NFTs. The re-fungible staking derivatives can further claim a portion block and fee rewards based on Governance defined interest rates.

Re-fungible NFTs

• KIRA Network’s Re-Fungible NFTs enable their owners to split (create divisible shares of) otherwise indivisible NFTs, so that it can be used for lending or trading by others. The original owner, in such case, will have the ability to buy back the asset at the Net Asset Value (NAV). This capability enables seamless price discovery of highly valuable assets, such as real estate, where an NFT may represent a collection of many other fungible assets. For example, an NFT representing a physical building may be a collection of NFTs that represent individual units / apartments within that building. Owner of a tokenized asset will hold full ownership (per local laws and regulations) as long as s/he is an accredited investor. S/he will also be required to put a deposit at-stake to vouch for legitimacy of the asset and its value.

Spending Pools

• Holders of NFT assets, who claim traditional revenues from their assets (e.g. real estate renting, ticket sales in art galleries or other sources) can incentivize other user to acquire and trade re-fungible NFT or sNFT shares by creating Spending Pools that automatically or manually (depending on the mode of operation) distribute deposited profits to their shareholders.

Token Baskets

• KIRA Network will further enable “basketing” of less valuable tokens effectively enabling creation of NFT baskets, which can be traded in a similar fashion to fungible tokens by using KIRA’s permissionless Interchain Exchange Protocol. Token bucketing along with NFT “re-funging”, enables KIRA to provide a feature-rich and liquid marketplace for traditional NFTs.
• Token Baskets can be created by one or by many users, or by the network’s governance body. Owners of such baskets will have the ability to whitelist any fungible or non-fungible token thus enabling deposits into their baskets. Token holders who deposit their whitelisted assets to the Token Baskets receive fungible bTokens that represent their deposited assets, which can be traded or even staked. Redemption of original assets is possible when users return bTokens back to their issuing Token Basket. Users redeeming NFTs from the basket receive a random asset back from the pool in proportion to the number of bTokens returned. This ensures fairness and integrity of the bToken market price.

So, what does it all mean for such a dynamic and growing digital asset space? With KIRA Network, NFTs will gain new utility as stakeable assets while maintaining a level of liquidity that was previously reserved only for traditional / fungible crypto assets. NFT buyers will have the ability to monetize their assets and use their tokens without compromising security or having to depend on centralized custodians to provide market access. Liquid marketplace will increase demand for NFTs and motivate creators and artists to generate new collectibles thus increasing their earning potential. Companies and projects that create digital assets can partner with KIRA and become the pioneers in accessing the infinite economy of the interchain ecosystem.

Upcoming NFT Staking on KIRA

Starting with our first-ever edition of KIRA NFTs, created by several well known artists in crypto space and released as common, uncommon and rare NFTs, KIRA Network will be releasing an ERC20 staking platform, via https://kira.network, in the lead up to our mainnet release.

On our staking platform, NFTs will be able to farm $KEX, and $KEX holders will be able to stake $KEX tokens and receive KIRA NFTs as rewards. Half of all KIRA NFTs will be given to our community via a series of NFT giveaways, while the remaining half can only be earned by staking $KEX.

The first stage of our KIRA NFT release will only include NFTs minted by KIRA Network, but in later stages we will be including other NFTs minted by partner projects. This is the beginning of our NFT staking showcase to educate our community on how NFTs and other assets can be used to secure KIRA KIRA Network while generating passive income to its users.

If you want to learn more, reach out and join us!

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