Liquidity gateway in the NFT ecosystem —the Pandora way

Ankit Raj
Pandora Finance
Published in
3 min readMar 3, 2021

NFT is getting bigger and bigger day by day (If you are new to the NFT ecosystem, you can look at our introductory article here).

Opensea and Rarible did a commendable job so far in the NFT space. It gave the creator a platform to create any NFT and make it available for sale. Creators across the globe created NFT and made it available to the marketplace. But the biggest issue here is the liquidity in the NFT ecosystem, which isn’t happening because of its unique representation. It isn’t easy to bring liquidity for the asset when each asset is unique in itself.

Past few months few projects came forward with an idea of NFT fractionalisation. Assets are converted to NFT and then fractionalised and make available the fractioned share to the end-user. Undoubtedly this is a good way to do it, but it won’t bring the liquidity for small value NFT since small value NFT doesn’t need fractionalisation.

The second method is a bit more interesting via PiNFT. Last week we worked and came up with a hybrid wrapped PiNFT token standards in the format of ERC20, which can be traded on Uniswap, Maker, AAVE, and others. This PiNFT will bring liquidity to the NFT ecosystem and make it possible for cross-chain trade on other platforms very easily.

We want to share a small glimpse of our work PiNFT from last week. We will be covering the detailed description of the standards of PiNFT in another blog post.

Fig: PiNFT bringing liquidity in NFT space

The first step is to categorise the NFT in a particular segment based on the originator. It can be any category; for simplicity, we are considering it here as the source. Let’s say there is the creator X, who created 5 different art pieces, and the base price of each art is as follows.

Art1: 100 DAI

Art2: 200 DAI

Art3: 300 DAI

Art4: 100 DAI

Art5: 300 DAI

All these arts will be wrapped together in the form of PiNFT. PiNFT is the hybrid standard developed in-house by the Pandora team, which has the functionality of both fungible and non-fungible token standards.

Here, every creator will have their own liquidity pool in terms of wrapped token format, which basically represents the value of art created by them. So if any trader is trading their NFT more and more, it simply means it has more value in it. And while making the trade of each NFT, there is a transaction fee that will be going to the NFT Artist Liquidity pool. So if any person X has invested some money in that pool, then that person X as the liquidity provider will get the transaction fee for each NFT trade. More trade will lead to more profit for liquidity providers. In the next step, the wrapped token will be changed to PiNFT, which will eventually derive any ERC 20 and 721 transactions on any chain.

What next?

This PiNFT can be traded on a cross-chain platform like BSC, Polkadot, and others, and at the same time, it will be available for trade, lend and leverage on Uniswap, AAVE, and other Defi dapp on other platforms.

We at Pandora are committed to bringing the real-world and digital assets accessible globally on-chain. If you want to be part of the journey, you can connect with us.

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Ankit Raj
Pandora Finance

Blockchain Engineer | Distributed system | Ex- Red Hat | Ethereum foundation grantee