PunkMaster token was created to fill a niche in the Hive Punks marketplace by creating flexibility, fungibility and providing continuous liquidity to the community. This is achieved by using a derivative utility token on Hive-engine to provide floor price tracking and fractional units representing Hive Punk assets held and backed by the issuing account (@vipservice). The full white paper is available HERE
Mechanics behind the PunkMaster Token (PUNKZ):
- 100 PUNKZ Tokens will always be backed by 1 Hive Punk, held by @vipservice
- PUNKZ Tokens are sold on Hive-engine slightly above the Hive Punk market floor price (+10%)
- PUNKZ Tokens are bought back below market floor price (-20%)
- Anyone may trade in any Hive Punk for 100 PUNKZ at any time. Hold the PUNKZ or sell on Hive-engine instantly for SWAP.HIVE
- Anyone may trade in 100 PUNKZ tokens + 1 HIVE token to redeem a randomly selected Hive Punk from @vipservice inventory, 100 rarity or below
- PUNKZ Pawn- leave your Hive Punk with me for up to two weeks in exchange for 100 PUNKZ, with a 20% premium to unpawn (paid in HIVE)
- PUNKZ Swap- trade in any floor Hive Punk plus 1 HIVE in exchange for a randomly selected Hive Punk from @vipservice, 100 rarity or below
The inherent value proposition may not be immediately obvious so I will elaborate further. PUNKZ Tokens allow the community to mitigate and hedge their risk exposure by reducing their entry to the floor price for buyers, while ensuring exit liquidity at all times for sellers. All without having to understand the specifics behind this particular NFT collection, such as which traits are rare or desirable and what is truly valuable. NFTs are volatile and prices can fluctuate rapidly from day to day - by limiting risk to the market floor prices the downside potential is reduced greatly while still giving 1:1 price exposure on growth on the overall collection.
When you are holding only a few Hive Punks you may or may not find yourself any immediately interested buyers depending on the specific traits they have. Much like unique art pieces different Hive Punks all have their own special demand. PUNKZ eliminates this barrier to trading by representing NFTs as fungible tokens which are indistinguishable from one another.
Additionally the 100-to-1 conversion rate of PUNKZ to Hive Punks represents 1% fractional ownership for every PUNKZ token held. This allows users to tap into the value of their Hive Punk without having to completely sell off their assets, should they want to cash out a fraction of a Hive Punk for liquidity in the future.
Since the market is free and open for anyone to trade this also presents an opportunity for market makers to come in and fill the spread between buy and sell orders. This means offering bids for PUNKZ using SWAP.HIVE, which can then be resold at a premium slightly under the existing ask prices.
I hope that PunkMaster Token helps to broaden the options and creativity when it comes to NFT use cases. We will continue integrating more fun ideas in the future especially within the Punk Legends Discord Community so come check us out and be part of the club!
