Nibbl’s most frequently asked questions.
Nibbl uses a 2-bonding curve model to ensure liquidity and let the original NFT owner decide how much liquidity they need to start the trading of the IONs.
About Nibbl
What is Nibbl?
Nibbl is a web3 protocol that lets you make editions of your NFTs. With Nibbl, you can make NFT editions, and create a community of like-minded collectors who own these NFT editions.
Nibbl makes it possible to make editions of an existing NFT without having to create a new NFT. You can lock your NFT in a smart contract and then create editions of it without having to create a new NFT. This is impossible on other platforms where you must create a new NFT before making editions of it.
What are IONs?
ION is short for Identity of NFTs. It’s a term we use to describe ERC-20 tokens that represent the parent NFT. To obtain ions, you first lock the original NFT in a smart contract vault, then create ERC-20 ions. Ions behave like other ERC-20 tokens, so they are fungible, and compatible with Dapps and projects on Ethereum.
What are NFT-backed editions?
NFT-backed editions are ERC-1155 editions of an NFT backed by ions.
After making ERC-20 ions of an NFT, you can use them to create ERC-1155 editions. This means that your ERC-1155 editions are backed by ERC-20 ions which are in turn backed by the original NFT.
Why should I editionize my NFTs on Nibbl?
Either as a protocol or collection, you get access to unique features that make your editionization experience more rewarding on Nibbl.
Benefits for protocols:
- Incentivise users
- Grow community
- Attract the attention of the community whose NFT they editionized.
Benefits for collections:
- Adding community members
- Reward current holders
- Editionize NFT bundles
Benefits for artists:
- Increases the value of your NFT
- Increased distribution
- Create more efficient DAOs
- Reward your holders
What benefits do I get from buying NFT-backed editions on Nibbl?
Depending on the editions that you buy, some of the benefits you can get are:
- Ability to participate in governance
- Future rewards with editions
- Access to token-gated discords
- Social proof.
Does Nibbl support Polygon?
Yes, Nibbl is the first editionization platform to build on Polygon. Building on Polygon enables us to offer NFT creators a friendly environment to editionize their NFTs and build a large community faster and cheaper. With Polygon, we can successfully bridge an NFT from Ethereum, an L1, and editionize it on Polygon, an L2. This makes it possible for thousands of people to collectively own the NFT while avoiding high gas fees on Ethereum.
Apart from bridging an NFT from Ethereum, Polygon-native NFTs can also be editionized.
What other blockchains do Nibbl support?
Nibbl supports the Ethereum blockchain. We also have plans to support all EVM chains.
Who controls the vaults where NFTs are locked up after editionization?
A smart contract controls and keeps the NFTs in the vault. We don’t host NFTs on any centralized platforms. When you editionize your NFT on Nibbl, you lock it in a smart contract vault. The smart contract will only release the NFT in the event of a buyout.
Editionization
What is NFT editionization, and how does it work?
NFT editionization means creating editions of existing NFTs. To editionize an NFT, you first lock it in a smart contract, then make editions of it.
Do I pay to editionize my NFT on Nibbl?
No, editionization on Nibbl is free of charge.
Why do I have to add funds while editionizing my NFT on Nibbl?
When you editionize an NFT, you receive a certain number of editions (defined by you). In order to account for those editions, we would need corresponding funds to back them. You can think of it as equivalent to starting a new pool on Uniswap (Say TokenX/ETH pool), where you are required to add some ETH liquidity as well.
Why do I have to add lesser funds than initially required?
You can add the complete sum of required funds (i.e. 25% of valuation), but sometimes this amount can be considerable, especially when editionizing high value NFTs. So you can add lesser funds that need to be in a defined range.
How are liquidity and valuation related?
The relation between liquidity and valuation is defined by Reserve Ratio. Reserve Ratio defines how buying and selling functions for editions and ions. Currently, Reserve Ratio is 25%, which means valuation is 4x liquidity.
How does the editionization of multiple NFTs work?
Multiple NFTs are locked in a basket and the whole basket is editionized. Once someone buys out the basket, they can withdraw the NFTs from the basket.
What is royalty?
After editionizing your NFT on Nibbl, we let you earn a portion of each trade as a fee (0.75–1.5%). Curator fees function like royalties. You can redeem your curator fees anytime and to any address.
Buyout
What is a buyout?
A buyout occurs when someone puts money at the current buyout valuation of the NFT in the vault, providing an exit to other owners.
Without a buyout, it will be impossible to unlock an NFT in a vault after editionization. A buyout is necessary for a scenario where the NFT generates low interest, and the original owner wants to buy out the entire NFT, or another person is willing to buy the NFT and provide an exit to other holders.
Can anyone trigger a buyout?
Anyone can trigger a buyout. Once you put money at the current buyout valuation and the timer is active, you’ll trigger the buyout.
However, no one can place a new buyout bid once a buyout is triggered. You can only place a new buyout bid when the current buyout is rejected.
How does buyout rejection work?
The buyout is rejected when the average valuation of the editions goes up by a certain number (15% currently).
How does the Nibbl buyout game work?
Nibbl’s buyout game is price based. It is a much simpler and faster alternative that doesn’t involve complicated governance processes. Our buyout game is divided into three stages.
In the first stage, a shark (the collector who wants to buy out the NFT) triggers a buyout to buy the locked NFT by depositing money at the buyout valuation of the editions.
In the second stage, the fish (community members who don’t want the buyout to happen) come together and put more money into the system by buying more editions. This increases the NFT valuation.
Also, in the second stage, the crabs (community members who want the buyout to be successful) come together and try to reduce the buying pressure by selling their editions. This reduces the NFT valuation.
Depending on the efforts made by the fish, the buyout is either rejected or accepted in the third stage.
If the fish buy enough editions to increase the NFT valuation by 15% before the buyout expires (4 days after the buyout was triggered), the buyout is rejected.
But if the NFT valuation doesn’t increase by 15% during the buyout period, the buyout is accepted, and the shark successfully unlocks the NFT.
Trade
What is a bonding curve?
A bonding curve is a mathematical concept that describes the relationship between an asset’s price and supply.
On a bonding curve, current price = tokenSupply²
This means that when someone buys an ION, the next buyer will pay a higher price to purchase the same ION, giving the early investors more profit if they decide to sell later.
How does Nibbl’s bonding curve design solve liquidity challenges?
Nibbl uses a 2-bonding curve model to ensure liquidity and let the original NFT owner decide how much liquidity they need to start the trading of the tokens.
Imagine you want to editionize a doodle worth 100 ETH. You’ll need to add liquidity to support the bonding curve from 0 to 100 ETH. The lowest amount of liquidity you can add is 5%, and the maximum is 30%.
This initial liquidity is called a secondary curve. Let’s say you add 10 ETH for an initial valuation of 100 ETH; this means the reserve ratio of the secondary curve is 10%. When there’s trading on the primary curve, we take a part of the fees to increase the secondary curve. This makes the secondary curve’s reserve ratio approach that of the primary curve. This mechanism ensures that there’s always liquidity for your NFT.
How do trading fees work on Nibbl?
In our protocol, there are three different types of fees.
- Admin Fee — For the Nibbl team
- Curator Fee — For NFT curator
- Curve Fee — Used to fill the gap in required liquidity and current liquidity.
How do buying and selling work on Nibbl?
When buying, you simply mint new IONs depending on the amount of ETH you give in. When selling, you burn your IONs for ETH that were locked previously.
Why does supply increase when someone buys?
When someone buys, new IONs are generated in exchange for ETH. Therefore, price and supply both increase.
Where do I find more information on Nibbl?
You can find more about Nibbl by visiting our website. You can also join our Discord and Telegram. Follow us on Twitter.
