Introduction:
Michi Protocol emerges as the inaugural trustless points trading protocol, enabling the seamless exchange of points from various protocols such as Eigenlayer, Renzo, and Kelp DAO prior to their Token Generation Event (TGE). Traditionally constrained by off-chain storage and wallet address linkage, Michi Protocol innovates by leveraging ERC-6551 Accounts (Tokenbound Accounts) to facilitate on-chain tradability and liquidity of these points.
Key Features:
ERC-6551 Tokenbound Accounts: At the core of Michi Protocol's innovation is the use of ERC-6551 Accounts, which are essentially NFT-owned wallets. The transfer of these NFTs equivalates to the transfer of the associated wallet and its points, thus allowing a trustless and collateral-free trading experience.
Michi Wallet NFTs: Users can mint Michi Wallet NFTs, which own ERC-6551 wallets. These wallets can hold tokens that earn points, which can later be sold along with the NFTs, thus transferring the accrued points to the buyer.
Point Trading Market: Michi Protocol introduces a marketplace where users can list their Michi Wallet NFTs (and the points within) for sale, creating a liquid market for trading points earned from various protocols.
Operational Flow:
Creating Michi Wallet: Users begin by minting a Michi Wallet NFT that owns an ERC-6551 wallet.
Depositing Tokens: Tokens that are supported by Michi can be deposited into the ERC-6551 wallets to start earning points from different protocols.
Accruing Points: Over time, these tokens generate points which are reflected in the user's wallet dashboard.
Withdrawing Tokens: Users can withdraw their tokens anytime, retaining the earned points within the Michi Wallet.
Selling Points: Accumulated points can be sold by listing the Michi Wallet NFT on Michi's marketplace.
Marketplace Dynamics:
The marketplace allows for the buying and selling of points through Michi Wallet NFTs. Sellers list their NFTs with associated points, and buyers can purchase these to acquire the points. Transactions can be made in ETH or USDC, with the platform enforcing trustless exchanges and transparency in average sale prices.
ERC-6551 Integration:
Tokenbound's ERC-6551 standard plays a pivotal role by enabling NFTs to own wallets, thus facilitating the entire mechanism of points accumulation and trading within the Michi Protocol. This standard does not necessitate any modifications to existing NFT contracts, offering a seamless integration into the Ethereum ecosystem.
Conclusion:
Michi Protocol stands out by addressing the limitations surrounding the tradability of off-chain points. Through the innovative use of ERC-6551 Tokenbound Accounts, Michi not only makes it possible to trade points on-chain but also enhances the security and liquidity of points earned across various DeFi protocols. This development represents a significant leap forward in the utility and accessibility of points within the broader cryptocurrency landscape.