The liquidity of NFTs is a significant barrier to their mainstream acceptance, and fragmenting NFTs has become a dominant approach to address this liquidity issue. Flooring Protocol aims to tackle the current imbalances in the NFT market by enhancing the liquidity of high-value NFTs and reducing entry barriers. In the future, Flooring Protocol plans to launch μTokens representing renowned NFT collections on major cryptocurrency exchanges. For instance, users will be able to directly buy and sell μAzuki, μBAYC, μPudgy, and other ERC-20 tokens on these platforms.

The Vault primarily serves two functions:

1). NFT Fragmentation: Users can deposit NFTs and receive 1 million μTokens (ERC-20 tokens) signifying fractional ownership, unleashing NFT liquidity.

2). Value Maintenance: The Vault retains NFT collateral, and any holder of that series of μTokens can deposit 1 million μTokens to randomly redeem any NFT from the pool. This maintains the inherent value and redeemability of μTokens (though μTokens can only be redeemed for NFTs within the same series, users can swap different series of μTokens on Uniswap).

The primary distinction between Safebox and Vault is exclusivity. After depositing an NFT into the Safebox, users receive 1M μTokens and a Safebox Key. This key grants the holder the sole privilege to unlock and redeem the NFT before the Safebox expires, while others can not access or redeem.

Upon creating a Safebox, users set an lock period. Before expiration, the key holder may choose to extend the lock-up period. If the Safebox expires, any user can auction the NFT within the next 24 hours, with the highest bidder winning. After the auction ends, the new key owner has a 24-hour grace period to unlock the NFT or extend the lock-up. If no auction is initiated within 24 hours post-expiration, any user can unlock and redeem the NFT with 1M μTokens.

The Key is designed not just to secure ownership but also to capture the premium of rare NFTs. For instance, if the floor price of 1 BAYC is 30 ETH and a user's rare BAYC is worth 40 ETH, depositing it into the Safebox will yield 1M µ-BAYC = 30 ETH at floor price, while the key would represent a 10 ETH premium. The premium can be discovered through auctions.

μTokens represent fractional ownership of NFT series. Each token equates to 1/1,000,000 of an NFT and can be used to redeem random NFTs from the chosen series pool. Features include:

• Series-specific: Meaning μ-BAYC can't be used to redeem Azuki series NFTs.

• Enhanced liquidity: Deposit NFTs to instantly unlock liquidity.

• Flexible trading: Freely tradeable on Uniswap.

$FLC is the native token of the protocol, primarily used for creating and renting Safeboxes, participating in auctions, obtaining fee discounts, and accessing exclusive VIP tiers.

• During Safebox creation, users need to stake $FLC, with the amount being proportional to the staking duration and current reserve rate. Refer to: https://docs.flooringlab.com/flooring-protocol/features/safebox/using-safeboxes

• Staked $FLC quantity determines users' VIP tiers, with higher tiers unlocking exclusive protocol benefits.

• LPs that add liquidity to the $FLC or μToken pools receive $FLC mining rewards.

• FLC is the pricing unit for Safebox Key auctions (users can also bid with $ETH).

In summary

This project employs two key components and two tokens to liberate liquidity for high-value NFTs. Currently in its inception, it has been audited by Halborn and OtterSec. Users can mine liquidity to unlock $FLC tokens. As for the price discovery mechanism of rare NFTs, its effectiveness needs to be taken a while to see.

Thanks to Flooring Protocol X for the image data of Cover Page.

❗Risk Warning: This report is an internal analysis by Brillian Research and is not intended as investment advice. The cryptocurrency market is a high-risk investment and investment assets are subject to various possibilities of loss and return to zero, so please be aware of the risks!

The liquidity of NFTs is a significant barrier to their mainstream acceptance, and fragmenting NFTs has become a dominant approach to address this liquidity issue. Flooring Protocol aims to tackle the current imbalances in the NFT market by enhancing the liquidity of high-value NFTs and reducing entry barriers. In the future, Flooring Protocol plans to launch μTokens representing renowned NFT collections on major cryptocurrency exchanges. For instance, users will be able to directly buy and sell μAzuki, μBAYC, μPudgy, and other ERC-20 tokens on these platforms.

The Vault primarily serves two functions:

1). NFT Fragmentation: Users can deposit NFTs and receive 1 million μTokens (ERC-20 tokens) signifying fractional ownership, unleashing NFT liquidity.

2). Value Maintenance: The Vault retains NFT collateral, and any holder of that series of μTokens can deposit 1 million μTokens to randomly redeem any NFT from the pool. This maintains the inherent value and redeemability of μTokens (though μTokens can only be redeemed for NFTs within the same series, users can swap different series of μTokens on Uniswap).

The primary distinction between Safebox and Vault is exclusivity. After depositing an NFT into the Safebox, users receive 1M μTokens and a Safebox Key. This key grants the holder the sole privilege to unlock and redeem the NFT before the Safebox expires, while others can not access or redeem.

Upon creating a Safebox, users set an lock period. Before expiration, the key holder may choose to extend the lock-up period. If the Safebox expires, any user can auction the NFT within the next 24 hours, with the highest bidder winning. After the auction ends, the new key owner has a 24-hour grace period to unlock the NFT or extend the lock-up. If no auction is initiated within 24 hours post-expiration, any user can unlock and redeem the NFT with 1M μTokens.

The Key is designed not just to secure ownership but also to capture the premium of rare NFTs. For instance, if the floor price of 1 BAYC is 30 ETH and a user's rare BAYC is worth 40 ETH, depositing it into the Safebox will yield 1M µ-BAYC = 30 ETH at floor price, while the key would represent a 10 ETH premium. The premium can be discovered through auctions.

μTokens represent fractional ownership of NFT series. Each token equates to 1/1,000,000 of an NFT and can be used to redeem random NFTs from the chosen series pool. Features include:

• Series-specific: Meaning μ-BAYC can't be used to redeem Azuki series NFTs.

• Enhanced liquidity: Deposit NFTs to instantly unlock liquidity.

• Flexible trading: Freely tradeable on Uniswap.

$FLC is the native token of the protocol, primarily used for creating and renting Safeboxes, participating in auctions, obtaining fee discounts, and accessing exclusive VIP tiers.

• During Safebox creation, users need to stake $FLC, with the amount being proportional to the staking duration and current reserve rate. Refer to: https://docs.flooringlab.com/flooring-protocol/features/safebox/using-safeboxes

• Staked $FLC quantity determines users' VIP tiers, with higher tiers unlocking exclusive protocol benefits.

• LPs that add liquidity to the $FLC or μToken pools receive $FLC mining rewards.

• FLC is the pricing unit for Safebox Key auctions (users can also bid with $ETH).

In summary

This project employs two key components and two tokens to liberate liquidity for high-value NFTs. Currently in its inception, it has been audited by Halborn and OtterSec. Users can mine liquidity to unlock $FLC tokens. As for the price discovery mechanism of rare NFTs, its effectiveness needs to be taken a while to see.

Thanks to Flooring Protocol X for the image data of Cover Page.

❗Risk Warning: This report is an internal analysis by Brillian Research and is not intended as investment advice. The cryptocurrency market is a high-risk investment and investment assets are subject to various possibilities of loss and return to zero, so please be aware of the risks!