How to use the Pillheads NFT20 Pool
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 an NFT to an existing pool to 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 any other NFT of the same pool, no need to tokenize.
NFT20 also allows you to own a fractional share of an NFT in the collection. For example, if you own 50 PILLHEADS(ERC20) then it means that you own 50% of a floor Pillhead NFT(cheapest Pillhead).
What is an NFT20 Pool and what can you do with it?
The NFT20 Pool contains Pillhead NFTs that other users have deposited, and you can perform different actions on it using PILLHEADS. PILLHEADS is an ERC20 token created specifically for the Pillhead NFT20 Pool and it can be traded on Uniswap.
Use cases for the NFT20 pool and PILLHEADS:
- You can deposit a Pillhead NFT into the pool for 95 PILLHEADS tokens.
- You can use 100 PILLHEADS tokens to swap out any Pillhead NFT in the pool.
- You can swap a Pillhead NFT with any other Pillhead NFT in the pool.
- You can buy directly using ETH from the pool*
- You can exchange your ETH for PILLHEADS on Uniswap*
- You can exchange your PILLHEADS tokens for ETH on Uniswap*
- You can provide Liquidity for the PILLHEADS-ETH Pair and earn trading fees.
*When there is enough liquidity
Note: All Pillheads are treated equally in the pool so you should only deposit Pillheads that you think are common (i.e. floor Pillheads).
We will go over each of the above use cases in more detail below.
1. Swapping a Pillhead with another Pillhead in the pool
Select the “Swap NFT to NFT” toggle at the top of the trading box.
- In “FROM”, select a Pillhead from your wallet.
- In “TO”, select the Pillhead from the pool that you want.
- Click on “APPROVE” which is a one-time transaction giving the DEX the authority to execute your transactions, and finally click on “SWAP” to complete the process.
Note: Unlike using PILLHEADS(ERC20), you can swap a Pillhead in your wallet for another Pillhead in the pool without the 5% fee and only pay the gas fee for the swap transaction.
2. Depositing a Pillhead into the Pool for PILLHEADS(ERC20)
You can deposit a Pillhead into the pool and in return, you will get 95 PILLHEADS tokens. The remaining 5 tokens act as a 5% fee which is distributed to $MUSE stakers.
3. Buying a Pillhead from the Pool using 100 PILLHEADS(ERC20)
If you toggle 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 PILLHEADS(ERC20) for any Pillhead NFT of your choice.
4. Buying/selling a Pillhead directly from the pool
NOTE: This feature is available after the Uniswap pool creation by the community, and enough liquidity added.
There’s also a feature where you can directly buy a Pillhead in the pool using ETH without dealing with PILLHEADS(ERC20). The NFT20 platform will do all the Uniswap operations for you in a single transaction. There’s a 5% fee but it might be more cost-efficient since you can save on gas fees.
Users can also sell right into this pool by clicking the toggle from “Buy From Pool” to “Sell From Wallet”.
5. Exchanging ETH for PILLHEADS(ERC20) on Uniswap
NOTE: This feature is available after the Uniswap pool creation by the community.
Since PILLHEADS is an ERC20 token, you can directly get it from Uniswap. You can also directly click on this link to access the PILLHEADS Uniswap exchange page.
6. Exchanging PILLHEADS(ERC20) to ETH
NOTE: This feature is available after the Uniswap pool creation by the community.
You can exchange PILLHEADS(ERC20) for ETH on Uniswap. The great part about this is that you do not need to look for a buyer (compared to OpenSea).
7. Provide Liquidity for PILLHEADS-ETH Pair
You can provide Liquidity to the PILLHEADS/ETH pair and earn trading fees.
To add liquidity on the Uniswap PILLHEADS/ETH pair you will need to provide PILLHEADS(ERC20) and ETH.
How does the Floor Price and the token price of PILLHEADS change?
The floor price of a Pillhead in the Pool on NFT20 and the token price of PILLHEADS(ERC20) fluctuate with buy and sell transactions.
If more people buy PILLHEADS tokens, then the PILLHEADS token price and the floor price (100 PILLHEADS) of a Pillhead NFT in the pool go up. Similarly, if more people liquidate their PILLHEADS tokens for ETH, the price goes down.
