Q&As from Peer-Review: A deep dive into NFT listings, account caps, D-Day and more…
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As part of our launch, we allocated time for peer-review of our information. This is so a fresh pair of eyes can tell us if they see any issues with our design or if additional clarifications are required. We can then prudently consider whether we need to make changes or update our communication.
I write this article to address the queries of Ishant Ayadassen (one of our reviewers) regarding how we list NFTs, deal with maximum caps, and achieve a level playing field for all members, in addition to clarifications surrounding what we’ve dubbed the “D-Day Event”.
It’s obvious that those diving deep into our design will come up with questions that maybe we might have addressed too briefly or simply missed. However, I consider some of the questions Ishant had to be important enough to address. I list these out below.
1. Do you have a schedule for the listing of NFTs?
Absolutely.
We intend to list new NFTs for auction on a daily basis with a set end time. Six hours before the end time, the joining fee of 5 BUNs doubles to 10 BUNs. Since each bid received in the last 15 seconds resets the timer, this means that an auction could go into overtime beyond the original end time. The joining fee will double every 6 hours in overtime until it reaches 40,960 BUNs (approximately 78 hours).
Re-listed auctions (i.e., those NFTs that are re-listed for sale by members) can be listed at any time and will have 170 hours to achieve a reserve price. When a reserve is met, the battle bidding auction starts with a timer of 24 hours to allow all people to join in. The reserve is added to the auction receipt. If it doesn’t get to the reserve, the auction is delisted. To note, any member can join in a re-listed auction at any time by paying the same share of the reserve price that prior members paid to join that auction.
2. What is the process to bid?
First, members must pay a joining fee to bid on a new (first-time listed) NFT, or pledge BUNs to meet a member’s share of a reserve price for re-listed NFTs. If the reserve is not met (i.e., the auction doesn’t go ahead), the pledged BUNs are returned to the member.
Second, members must allocate an amount they’re willing to spend on each auction. They can “clear” that amount at any time and the balance is returned to their account, or add more to it.
An example of the bidding control panel is shown below.
Once members have allocated an amount they’d like to bid for an auction, they can then set the bid bot or bid manually, or both. If the amount is entirely consumed they will need to re-allocate more to continue bidding. This is good for members to control the amount they’ve allocated per auction.
Lastly, members can bid on one or multiple auctions at the same time.
3. Do all bids get sent to the Oven automatically from biddings?
No.
BUNs for an auction only get credited to the Oven when the auction concludes. In the meantime, the Oven will accumulate BUNs spent for other services, such as whitelisting email addresses of invitees or of public cryptographic addresses, NFT Re-listing fees, etc.
4. What’s a D-Day scenario?
D-day is a theoretical event where Loot NFT has no more BUNs to sell and the Oven has not redistributed BUNs yet to the Loot NFT ecosystem. As D-Day approaches, BUNs become more scarce and the last members that have BUNs (as long as they have joined an auction), are the ones that can win the NFTs.
If all auctions are still in progress on the platform at that time, this could result in a cascade of auctions ending, filling up the Oven as they do so. However, since the Oven only distributes at 00:00 UTC on Sunday, there may be a situation where members have to wait until that time to participate again (it also means that no new members can sign up until that time).
That’s D-Day.
5. How long do we have to wait for a D-Day?
As I said above, D-Day is theoretical and dependent on several factors, such as how long an auction lasts, how many members are bidding in the last 15 seconds, how many NFTs are on auction, what the re-listing reserves are, how many BUNs are off-platform, or lost, or “hodled,” etc. Technically, our models show that it is possible in a 21-day period, but that’s a very big “if”.
6. Doesn’t a D-Day scenario mean that new auctions will only be available to members that have kept BUNs to pay the joining fee before they lockup to other participants?
No.
All of our listings end weekly following an Oven release. It means that members can still join an auction at 5 BUNs before the joining fee doubles (only in first-listing scenarios).
7. So, you’ve capped your revenues?
Yes and no.
There are other avenues for growth, such as creating Loot NFT sub-sites on a country basis to help creators there; they could then gravitate to the Loot NFT site, much like the football world cup which has different qualifying regions before getting to the world cup. These sub-sites could use tokens with different tokenomics but the same or similar approaches.
8. About the cap of 50,000 per account… how do you stop members from buying from Loot NFT and sending them off-site and purchasing more so that they have more than 50,000 BUNs combined?
A member’s cap is the sum of all BUNs they’ve sent off-site (since BUNs are blockchain assets) and their balance on Loot NFT (which includes amount allocated in live auctions). Hence, they are not be able to buy more from Loot NFT unless they use their BUNs on Loot NFT. In order to send BUNs off site, they’re also required to pass our KYC checks, which stops multiple accounts from being used to buy BUNs and consolidate off of Loot NFT.
9. Can a member buy BUNs at any time or is the cap of 50,000 BUNs a onetime lifetime cap?
Members may buy BUNs at any time and the cap is a hard cap at any one time.
For e.g., if John buys 50,000 BUNs and spends 1,000 BUNs in an auction, he will be able to purchase up to 1,000 BUNs.
A couple of important notes here:
(a) BUNs are sold in packs of 25 BUNs, which means that if a member spends 1 BUN at an auction and wants to buy BUNs, he/she won’t be able to do so. That member must make room for at least 1 pack.
(b) If a member has allocated BUNs to auctions or pledged to a re-listing, these BUNs are treated as if they hadn’t left the account of that member (since they still have control of those BUNs).
For e.g., John has 50,000 BUNs. He allocates 5,000 BUNs to an auction. His account balance shows 45,000 BUNs. He tries to purchase more BUNs. He can’t until he returns the BUNs from the auction. For reserve pledges, these amounts are locked-in and can’t be cancelled. It is only returned if the auction doesn’t go ahead.
10. If I’ve sent 50,000 BUNs off site and I’m not able to sign up unless I buy BUNs, but they’re all off-site and I can’t buy more, what do I do?
Send the BUNs back to Loot NFT.
Each member has a public BUN address on Loot NFT. Once the off-site BUNs are received, you can log in. If you don’t know your Loot NFT public BUN address after your email One-Time-Password confirmation (in this specific event) you’ll be presented automatically with your account’s public BUN address.
11. Can members send in BUNs from another non-whitelisted public BUN address to their account?
Yes, but any amounts over their 50,000 BUN cap (which includes BUNs held on Loot NFT) will be sent to the Oven for re-distribution to the Loot NFT ecosystem. Members must therefore be mindful not to send more than the cap they’re entitled to, otherwise they will lose the additional amount.
12. Are there any additional benefits to more BUNs out of the Oven to holding a degree?
Maybe. We may give degree holders a benefit that raise their maximum BUN cap from 50,000 BUNs by 10% (1st degree), 20% (2nd degree), 40% (3rd degree), 70% (4th degree), and 110% (5th degree) to make room for the increase in rewards those members receive.
13. If you add more NFTs everyday and you have a limited supply, doesn’t that mean that over time the remaining NFTs get valued less?
That’s a great question and the answer is that we don’t know. I generally don’t talk about the future value of NFTs as I don’t want my words to be taken out of context, but I think that in this instance I can list certain aspects that may affect an NFTs value for general informational purposes.
For fungible tokens valued in a pair to another, inflating one token in relation to the other generally means that the inflated one loses value. In our case, we are adding more NFTs while keeping BUNs fixed. This is more like valuing gold (or a painting) with respect to an inflationary US dollar, although even that is a stretch, but you get the idea.
On Loot NFT, there’s a few things that need to be taken in consideration:
(a) The arena has at a maximum of 20 first-listed NFTs and 20 re-listed NFTs at the same time (40 NFTs on auction); this proportion of first-time/re-lists NFTs may be varied depending on participation. All other items wait on a first come, first serve basis in the “Upcoming” section. Once a spot frees up in the arena, that next NFT goes on auction. This focuses the attention of the bidder only on a few items at any one time.
(b) Members that want to complete sets have to hold on to a number of NFTs, thus effectively taking them out of circulation, temporarily. For e.g., if a member has a 3/5 they may want to get to the 5/5 to get the mystery gift.
(c) Some NFTs may attract more attention than others, such as if we have a custom car by a particular creator in a set of mechanical objects.
(d) NFTs may not be sold by “hodlers” since NFTs may have value in themselves to those members.
(e) NFTs can be sent off-site. This reduces the amount of NFTs in the ecosystem and can balance out with the incoming NFTs such that certain NFTs may have more value off-Loot NFT than on it to a member. This means that a fresh contingent of NFTs can take the spots of the older ones.
(f) The number of members on the Loot NFT is relevant to the bidding fervor at auction.
(g) In a decentralized ecosystem, we will transition to pricing the BUNs with a set amount of ADA (Cardano Native Token); for example 1 pack for 5 ADA - to note we originally intended to launch by selling BUNs to ADA, before replacing it with USDC for several practical reasons. Hence, in relative fiat terms, BUNs may fluctuate in the future with the price of ADA.
Concluding Remarks
I appreciate that the above is not for everyone, hence why I’ve posted it in the complex section for those that want to go down the rabbit hole.
For everyone else, it’s simple — there are 50,000 BUNs cap per member, which you use to participate at auction. Simply pay the joining fee, set the amount you want to allocate to bid per auction, bid to get NFTs, collect sets, and have fun competing in the arena.
Lastly, I want to thank Ishant for seeking clarification on these items, and prompting me to expand further.
❤️ Loot NFT
