ERC-520: Elevating Non-Fungible Tokens valuation and liquidity
Problem statements
NFT on-chain valuation and market liquidity are the key drawbacks hindering the growth of NFTs after the last NFT and Gamify bull run. Both creators and collectors are facing the same issue with collectibles, art, and game NFTs. Many NFT collections are overvalued without a transparent valuation mechanism. Besides that, 99%v of collectors are facing issues with liquidating their assets since the day they acquired them. In the market, solving the most painful matter on unethical creators who engage in rug pulling and honeypot schemes.
ERC-520: Not a Format, but the Zero-Sum DeFi protocol
ERC-520 is a revolutionary protocol driven by ERC-721 (NFT), facilitating the fractionalization of assets into ERC-20 liquidity tokens. This innovative feature allows for the utilization of NFTs as valuation backing within any Automated Market Maker (AMM) system.
At its core, ERC-520 operates on a zero-sum principle, with its total supply predetermined from the outset. When an NFT is liquidated, it becomes locked within the protocol, while simultaneously 1 ERC-20 liquidity token, which is fractionalized to represent a portion of the original NFT’s value.
This unique mechanism ensures a balanced ecosystem where the total value remains constant, while providing liquidity and fungibility to previously illiquid assets. Through ERC-520, participants gain access to a seamless and efficient means of unlocking value from their NFT holdings, while contributing to the vibrant ecosystem of decentralized finance.
Early adoption
ERC-520 is specifically designed to address the needs of intellectual property (IP) creators and meme artists, offering a groundbreaking solution for asset tokenization and valuation.
This innovative protocol places a strong emphasis on IP valuation, providing creators with a powerful tool to tokenize their digital assets effectively. Leveraging the ERC-721 (NFT) standard, ERC-520 enables IP creators to fractionalize their works into ERC-20 tokens, unlocking new avenues for liquidity and investment.
Moreover, meme artists, whose creations represent a form of intellectual property, can harness ERC-520 to transform their memes into tradable assets. By treating memes as valuable IP, ERC-520 expands the possibilities for monetization and investment in this burgeoning creative space.
With ERC-520, the barriers to entry for participation in the NFT market are lowered, fostering greater accessibility and inclusivity for creators of all types. By providing a robust framework for the fractionalization and exchange of digital assets, ERC-520 empowers creators to realize the full value of their IP and meme creations in the dynamic landscape of decentralized finance.
Real-world Asset (RWA)
While the adoption of ERC-520 with IP and meme assets marks just the beginning, the protocol’s potential extends far beyond. Real-world assets (RWA) represent the next frontier in tokenization, offering a bridge between traditional finance and the decentralized ecosystem. With ERC-520, the tokenization of RWA opens up unprecedented opportunities for fractional ownership and investment in assets such as real estate, commodities, and infrastructure projects.
By facilitating the seamless integration of RWA into the blockchain, ERC-520 democratizes access to asset ownership and investment, empowering individuals and institutions alike to participate in previously inaccessible markets. As the adoption of RWA gains momentum, ERC-520 stands poised to revolutionize the landscape of decentralized finance, unlocking value and liquidity in untapped sectors of the global economy.
Opensource
ERC-520 will be released on ManekiMeow and will contribute to GitHub as open source. Developers, you are welcome to connect and share ideas with me via social accounts.
https://twitter.com/canmasu
https://twitter.com/ManekiMeowOrg
