How to Use the Cool Cats Liquidity 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 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 COOL20 then it means that you own 50% of a Floor Cool Cats(the cheapest Cool Cats).
What is an NFT20 Pool and what can you do with them?
The NFT20 Pool contains Cool Cats that other users have deposited and you can perform different actions on it using COOL20. COOL20 is an ERC20 token created specifically for the Cool Cats NFT20 Pool and it can be traded on Uniswap.
Use cases for the NFT20 pool and COOL20:
- You can deposit a Cool Cats into the pool for 95 COOL20 tokens.
- You can use 100 COOL20 tokens to swap out any Cool Cats in the pool.
- You can swap a Cool Cats with any other Cool Cats in the pool.
- You can buy directly using ETH from the pool.
- You can exchange your ETH for COOL20 on Uniswap.
- You can exchange your COOL20 tokens for ETH on Uniswap when there is enough liquidity.
- You can provide Liquidity for COOL20-ETH Pair and earn rewards in $MUSE.
Note: All Cool Cats are treated equally in the pool so you should only deposit Cool Cats that you think are common (i.e Floor Cool Cats)
We will go over each of the above use cases in more detail below.
1. Swapping a Cool Cats with another Cool Cats in the pool
- Select the “Swap NFT to NFT” toggle above.
- In “FROM”, select a Cool Cats from your wallet
- In “TO”, select a Cool Cats from the pool that you like better
Note: Unlike using COOL20, you can swap a Cool Cats in your wallet for another Cool Cats in the pool without the 5% fee and only pay a gas fee.
2. Depositing a Cool Cats into the pool
You can deposit a Cool Cats into the pool and in return, you will get 95 COOL20 tokens. The remaining 5 act as a 5% fee and get distributed to $MUSE token holders.
3. Buying a Cool Cats from the pool using 100 COOL20
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 COOL20 for a Cool Cats!
4. Buying a Cool Cats directly from the pool
There’s also a new feature where you can also directly buy a Cool Cats from the pool using ETH without dealing with COOL20. The NFT20 platform will do all the Uniswap operations for you in 1 transaction. 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 COOL20 on Uniswap
Since COOL20 is an ERC20 token, you can directly get it from Uniswap. You can also directly click on this link to access the COOL20 Uniswap exchange page.
6. Exchanging COOL20 to ETH
Similarly, you can exchange COOL20 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 COOL20 in order to perform this operation.
7. Provide Liquidity for COOL20-ETH Pair
You can provide Liquidity to the COOL20/ETH pair .
- Add liquidity to the Uniswap COOL20/ETH pair. .You will need to provide COOL20 and ETH in order to do it.
How does the Floor Price and the token price of COOL20 change?
The Floor Price of Cool Cats on NFT20 and the token price of COOL20 fluctuates with the buy and sell transactions.
If more people buy COOL20 tokens, then the COOL20 token price and the Floor Price (100 COOL20) of a Cool Cats on the NFT20 pool go up. If more people liquidate their COOL20 tokens for ETH, the price goes down.
Thanks to AltJumpman for creating the pool for the Cool Cats community
