Introducing onchain perpetuals
The perpetual futures market has experienced significant growth recently and has become a mainstay of DeFi. At Nibbl, we strongly believe that a perpetuals DEX for onchain assets offers a solution to the volatility within the dynamic crypto market.
Our product isn’t limited to traditional assets; it’s designed for assets living directly on the blockchain. This opens up a world of possibilities, from NFTs to friend tech keys.
We are happy to announce that we are launching our very own perpetual DEX for onchain assets. We are building features that are bound to streamline trading while giving traders exposure to various asset classes.
Our product will focus initially on NFT perpetuals. But before we talk about our product, let's look at the need for NFT perpetuals, their advantages, and why we are betting on them as the future of NFT finance.
The NFT market, once a niche interest, has exploded into a mainstream sensation. While the first quarter of 2023 witnessed a notable surge in NFT trading volume, it subsequently experienced a gradual decline. Within this ever-changing environment, continuous innovation has emerged within the NFT space, aimed at resolving the challenges encountered by the NFT market.
The Current NFT Market
The NFT market has undergone a remarkable transformation since its inception. From its humble beginnings, it has weathered both bull and bear markets, ultimately establishing itself as a cultural and economic force.
Presently, the NFT market finds itself in a prolonged period of reduced activity, often referred to as the enduring “crypto winter.” During this time, trading volumes have reduced, and NFT sales have experienced a decline.
Despite the discouraging numbers, there’s still hope for the NFT market. It’s staying strong and innovative, thanks to products like lending/borrowing protocols and NFT Perpetuals that are designed to meet its changing needs.
The Need for NFT Perpetuals
As the NFT market matures, the demands of participants evolve. NFT Perpetuals address critical needs, offering:
- Liquidity: NFT Perpetuals create a liquid market, enabling traders to buy and sell NFT exposure without waiting for potential buyers of the actual NFT.
- Risk Management: The NFT market’s volatility can be daunting. NFT Perpetuals offer risk management tools, such as leverage and hedging, to navigate price fluctuations.
- Accessibility: Owning an entire NFT collection can be quite expensive. NFT Perpetuals democratize access, allowing traders to speculate on NFT price movements with smaller investments.
- Betting on Belief: Traders can bet on their beliefs and strategies through NFT Perpetuals. They can open long or short positions easily and efficiently.
How do NFT Perpetuals Work?
NFT Perpetuals operate on principles similar to perpetual contracts in the cryptocurrency market. Key components include:
- Liquidity: Those who provide liquidity deposit their funds into a shared pool, which is then utilized as a source of liquidity for trading activities. The liquidity pool also receives contributions from different fees, like trading and borrowing fees.
- Trading pairs: Similar to cryptocurrency futures, NFT perpetual futures are traded in pairs, typically involving NFTs and stablecoins or other cryptocurrencies. On Nibbl, NFT perpetuals are valued in ETH.
- Leverage: Traders can use leverage to amplify positions, requiring careful risk management.
- Funding Rates: To maintain contract prices close to the spot market, funding rates are periodically exchanged between traders.
- Settlement: Profits and losses are realized upon settlement, based on the NFT’s price movement since contract initiation.
Conclusion
As NFTs solidify their position as a legitimate asset class, NFT Perpetuals offer an important way for traders and investors to navigate this rapidly changing field. While there are both opportunities and risks involved, NFT Perpetuals play a significant role in shaping the ongoing changes in the NFT market.
Although the main focus is going to be trading floor prices of NFTs for some time, we are planning to introduce trading for other on-chain assets like friend tech keys.
As the DeFi market continues to redefine traditional finance, Nibbl stands at the forefront, shaping the future of onchain asset trading.
Stay tuned and keep watching the space for more updates.
Trading competition coming soon.
Learn more about Nibbl by visiting our website. You can also join our Discord and Telegram. Follow us on Twitter.
