NFT Vaults AMA — Recap
At OptyFi, our mission is to make crypto wealth generation opportunities available for everyone — not just for early adopters.
Recently, we announced the launch of the NFT Vaults. By combining the powers of machine learning with the experience of NFT Strategists, we will bring NFT wealth-building opportunities for non-experts.
We collected several questions about the NFT Vaults from our Discord and answered them on a live AMA. The full video is available on YouTube:
Here is a recap of the AMA! 👇
Hi Community! Thanks for coming to our Discord. The NFT Vaults will open in the next few weeks.
In order to answer some of the questions from the community, we decided to host this special AMA with Curtis Point, our Business Developer.
Hi, Curtis! Can you give us an introduction to the NFT Vaults?
The product our community is most familiar with is the yield vaults, which optimizes your stablecoins, your LP tokens, etc. in DeFi.
But what OptyFi is trying to do is to optimize all your decentralized assets, and make them accessible to everybody.
This is why we are launching a second product — the NFT Vaults. They will allow everyday users to get exposure to optimized NFTs.
How do you optimize NFTs? We’re seeking the help of strategists.
Those strategists can be qualitative NFT investors with a track record of success in NFT investing, or quantitative strategists that can look into historical data, trade analysis, and social metrics to make purchase decisions.
In short: the user will only have to deposit his ETH. Strategists, which the DAO will choose, will be responsible for buying and selling the NFTs for the vault.
We will begin with the CryptoPunk vault, and then we will launch BAYC Vault. After that, we intend to go into “themes”, such as Metaverse Land, Gaming, Music NFTs, etc.
The long-term goal is to let our users have exposure to new trends in the NFT landscape without going deep down these topics by themselves.
Since the Punk Vault is our genesis vault, we will offer some pretty good OPTY rewards for depositors. So users will get not only exposure to CryptoPunks, but also our governance token.
Thanks for this fantastic introduction to the NFT Vaults, Curtis.
We can now start answering questions we received on Discord during the week.
Will the NFT Vault let users get exposure to not-so-hyped projects? Or are we targeting only NFT blue chips?
Each vault will have a “theme”.
For the first vaults, themes will be chosen by the OptyFi team.
In the near future, our idea is to let the community decide on those themes.
Let’s say that the community decides to create a Metaverse Land. A strategist will be responsible for buying or selling digital land for the vault.
Maybe the Strategist knows about a lesser-known project on that theme. The Strategist is free to choose which NFT will be more profitable for the vault.
All right! That makes sense!
Let’s go to the second question.
One of the biggest concerns of our community is regarding the time-locking period. The PUNK Vault will have an investment period of one year.
However, many community members are afraid of locking their capital in the vault for twelve months in such a new and unstable market.
What can we say about those concerns, Curtis?
Your capital will be locked on the vaults, but the token vaults will be liquid.
We are considering ways of increasing the liquidity in the secondary market. We may, for example, create a PUNK-ETH pool on Sushiswap. In that case, you would be able to sell your vault tokens back to ETH.
The NFT Vault is similar to a closed-end fund in TradFi.
The funds are invested on a CryptoPunk during the investment period, so there is no way to withdraw your ETH!
In short, the NFT Vaults is a long-term play. However, you will still be able to trade your vault tokens on the secondary market.
Why is it important to have such a considerable period of time for blue-chip NFTs such as CryptoPunk or BAYC? Why not one or three months?
I still believe we are early in the NFT space. NFTs’ utility is getting clearer for more users and institutions.
“OGs” of the space, such as Punks or Bored Apes, offer a huge risk-reward ratio.
If the NFT Market tanks, these NFTs will probably devalue less than other less-known projects. It’s a kind of “low-risk asset” for the NFT Vault.
Okay — this makes a lot of sense, and there are pretty good OPTY incentives for our first depositors.
Now let’s move on to the next question!
NFTs are allowing new ways of monetization. Besides “buy-low-sell-high,” there are possibilities of building services on the metaverse, renting land, getting royalties, etc.
Are the NFT Vaults going to explore these new possibilities for generating income?
Right now, the default strategy is buy-and-hold. But in the next thematic vaults, our strategists will be able to explore these new incoming strategies.
This is what the NFT Vaults product is all about.
Exploring these new income strategies is almost a full-time job. But you can get exposure to these new and complex strategies just by depositing them into our vaults.
That’s exciting! Let’s go to the next question from the community.
What if the NFT market crashes? Can the NFT Vaults do something about it?
First of all, it’s essential to understand that there is a risk of loss on the vault, especially if the entire NFT market crashes.
But even if the entire NFT market goes down, you’ll also earn the OPTY rewards, which help mitigate the risk of losses.
Let’s say the CryptoPunk floor goes down 30%. Everybody will lose 30%, but with OPTY rewards, the loss will be much smaller.
We may develop hedging strategies for the future NFT Vaults to mitigate losses in the mid-term. However, this feature won’t be available during the CryptoPunk Vault.
All right! We got it. Let’s go ahead.
What will be the next NFT blue-chips vaults?
Besides CryptoPunks and BAYCs, we may propose a basket of blue chip NFT projects to the community, which would give our depositors exposure to the most important NFTs assets in the space.
And to be honest, I would be really excited to invest in that vault!
Can you explain the difference between the NFT Vaults and NFT fractionalization?
If you fractionalize a Punk, you’ll get exposure to that Punk, not the whole CryptoPunk market.
In our product, strategists track the market with data analysis to choose the best Punk to buy.
A Punk may have a hoodie, a cigar, etc. By employing data analysis, we can predict if that Punk is undervalued and buy it for the vault.
Soon, it will be possible to have more than one kind of NFT in the same vault.
None of this is possible with NFT fractionalization.
In short, you’ll get exposure to the most undervalued CryptoPunks! Not the rarest or the most beautiful one.
Now we got an astute question from one of our community members.
In his opinion, whales won’t need the NFT Vaults, as they have enough money to buy whatever NFT they want without an asset manager.
On the other hand, retail traders look for more risks to get rich quickly.
In short: who’s the target user of the NFT Vault?
The most obvious use case is the retail investor who does not have enough money to buy a punk.
Besides that, you may have enough capital but not enough time or expertise to go deep into the NFT space and buy a punk yourself.
We’re confident that even whales and sophisticated investors may benefit from the NFT Vault.
Let’s say a whale is confident that Gaming is the next big thing. Instead of spending hours looking into crypto games, the whale can just deposit in the gaming vault.
Besides that, we may be able to create custom vaults in the future — it’s the idea of “vault as a service.” Investment groups will be able to run their own vault with their own strategists for their customers.
The NFT Market is known for its illiquidity. How do we deal with it?
The NFT market is risky.
You can try to mitigate this risk as much as possible by defining maximum exposure to specific projects.
Besides that, we believe our strategists will have the expertise in choosing projects that can be sold.
Let’s go to the last question!
In the future, how do we ensure that we’re just picking high-quality NFTs?
That’s precisely the job of the Strategists. They’re responsible for purchasing decisions on the vaults.
Besides that, we will have Portfolio Managers on the vaults responsible for evaluating the Strategist’s performance. This system will ensure that they’re just picking up good NFTs projects.
That’s it! Thanks for your time, Curtis.
I hope our community can better understand the NFT Vaults.