Combining NFTs with DeFi mechanics
The SatoshiFinanceToken (SFT) is the utility token for the SatoshiFaces ecosystem. The SatoshiFaces project represents a collection of 4999 unique NFT artworks created by the award-winning and renowned British artist Ed Merlin Murray. It combines digital art with DeFi mechanics, as every SatoshiFaces NFT held generates SFT tokens daily. Since our successful launch in April, there have been nearly 3000 artworks sold for a combined value of over $2,000,000.
In this article we will cover the following topics:
- SFT Token Distribution
- Token Generation/Staking Rewards
- Token Use Cases
- Ongoing Token Burn
- Uniswap Listing
The SatoshiFinaceToken distribution is unique in several ways:
- There were no pre-minted company, team, advisor or marketing tokens with aggressive vesting schedules
- 100% of tokens are distributed to SatoshiFaces NFT owners, which hold the entire power of managing the token supply
- All SFTs entering circulating supply from day one are generated from the 4999 NFTs, which essentially act as Nodes and return daily rewards to their owners
This is a fair incentive for the SatoshiFaces team to create utility to increase the value of the SatoshiFinanceToken. The more use cases we build, the more people use SFT on our platform, the more revenue we generate.
The token distribution chart is as follows:
Token Generation/Staking Rewards
Staking rewards will function differently from traditional crypto reward structures. Rather than holding tokens to obtain rewards at a fixed or flexible APY, users will hold SatoshiFaces NFT artworks. In essence, these artworks will act as Nodes, not securing the chain as we are layer 2, but ensuring a decentralised distribution of the token supply.
The NFT artworks (Nodes) will generate 5 SFTs per day for the first year, reducing by 25% per annum until10 years have passed, after which the total maximum supply of SFTs in circulation has been reached. At the time of writing an artwork is 0.4 ETH or $1500. Over the course of a year and accounting for the intiail purchase bonus, an artwork will generate 2325 SFTs. At the list price of $0.50 the artwork (NFT) will generate a $1126 or 77.5% APY. The higher the SFT price goes relative to the NFT price the higher the APY % rises.
When users claim on the SatoshiFaces wallet page, they are minting SFTs directly into the circulating supply. The circulating supply shown on tracker sites such as Coingecko will be the current minted supply. To remain transparent, we will add tickers for the current minted circulating supply, current max circulating supply (assuming claims what they can), and max total supply on the SatoshiFace SFT page. The specifics, at the time of writing, are as follows:
- Circulating Minted Supply — 338,164
- Circulating Max Supply — 1,924,270
- Max Supply (After 10 years) — 36,912,116
- Max supply after 20% burn of all tokens spent on utility (after 10 years) — 30,000,000
The token generation schedule of the artwork will be as follows:
At its core, the SatoshiFinanceToken is a utility token used to interact with all elements of an ever-evolving Satoshi ecosystem. Listed below are a few examples of how SFTs will be utilised. We will create further articles explaining the different components closer to their relevant launch. The applications for SFTs will be continually built and implemented as the ecosystem continues to expand.
1. SatoshiFace Name Changes
The initial SFT utility implemented into the SatoshiFaces ecosystem allowed users to choose a unique name for their NFT artwork. The owners can choose any unclaimed, alphanumeric name for their artworks. The selection of a unique, recognizable name can add an additional layer of rarity to the art piece. Additionally, users can also allocate a name closer to their heart, perhaps of a family member or a beloved pet. In doing so, it adds a touch of sentimentality to their artwork. The names can be changed an infinite amount of times as long as the piece name hasn’t already been assigned to another artwork. The cost of a name change per artwork is 250 SFTs. Subsequently, every time a user wants to change a name, they would need to wait a minimum of 50 days (50 x 5SFT) worth of artwork staking rewards until the required SFT to initiate the change has been generated.
- 250 SFT per Name Change
2. Satoshi’s NFT Launchpad and Marketplace
The SatoshiFace NFT Launchpad will provide the ideal platform for renowned artists to make their mark on this digital world. The creative team at SatoshiFaces will work with a panel of established artists to curate various one-off individual pieces or small collections, also known as NFT drops. Art that one would feel happy to display on their purpose-built Qonos digital display.
We will utilise our SatoshiFaces platform as an NFT Launchpad and Marketplace to work with artists from the early stages. We will familiarise them with all the requirements needed to create their own NFT and support them throughout the process, from onboarding to selling the artwork.
SFT will play an integral part in this Launchpad, as participation in the drops will require SFT tokens. Some special drops with significant demand will require purchasers to have a certain amount of collateral in SFT tokens that must be securely held in their wallet. Those who meet the collateral requirements will be granted early access to these special drops before they go public. Ultimately, this creates demand for the SFT tokens and encourages users to hold them in their wallets.
- SFT required to purchase NFT artworks from the SatoshiFace Launchpad
- SFT tier requirements for wallets to hold to gain access to initial “in-demand” drops
3. Gamification / Factions
Elements of gamification will accompany the developing storyline. The initial round will see artwork owners be split into various factions, all serving different purposes and roles in Satoshi’s World. Within these factions, users will be assigned certain tasks which are relevant to an evolving and dynamic storyline. By completing these tasks, they will earn rewards with some further potential monetary benefits.
SFT will be incorporated in several ways. Entrance into each faction will require an “initiation fee” which will go into a faction’s fund. These payments are controlled by community appointed leaders. The SFT fund can be spent in numerous ways, such as:
- Unlocking custom made 3D worlds relevant to your Faction
- Unlocking NFT airdrops to all Faction members
- Unlocking partner token airdrops to all Faction members
- And many more benefits to be incorporated
This form of gamification will build on the community engagement that we have currently experienced in our social media channels and allow users to reap the benefits of active participation. We see this evolving into X token partnering with SatoshiFace and airdropping tokens to the Faction that completes a certain task first.
Beyond that, there will be internal tasks and challenges that will allow winning Factions access to elements of our platform first. For example, they may receive early access to in-demand Launchpad drops first or may win prizes such as custom-designed NFT’s or existing Faces and SFT tokens.
We appreciate that having these SFT transfers on the ETH chain isn’t viable due to network-related fees. In circumventing the fee-related issues, we will design a centralised wallet built into Discord whereby users can make an initial deposit into a “Personal” main account and from there into a “Faction” subaccount. They can withdraw from the central “Personal” wallet to their private on-chain wallet freely.
- SFT will be the Currency of “Satoshi’s World”
- All elements of the gamification process will be run with SFT as the underlying currency
4. 3D Worlds
On top of 3D worlds relevant to the storyline and gamification, we will be partnering with a recognised 3D NFT provider (announcement coming soon) to create purpose-built showcase rooms. Users can store their SatoshiFaces and any other NFT they own in their web3 enabled wallet. The detail on these 3D worlds will be unlike anything we have seen in space thus far. The 3D rooms will be purchasable only with SFT tokens and will act as an additional tradable NFT minted on-chain. They will be created with a limited supply in mind, and the increasing complexity of the rooms will be exemplified in the varying prices.
We will develop the idea of 3D rooms with functionality to allow multiple users to gain access to a single room through their web3 connected wallet. This will open up the possibility of an SF auction house and conference rooms where NFT Launchpad artworks can be showcased and auctioned live in front of hundreds of users, all for SFT tokens.
- Bespoke 3D rooms to showcase NFT’s all purchasable with SFTs
- Access to live auctions requiring an initial “entrance fee” in SFT with all subsequent “bidding” for Launchpad artworks in the native SFT
5. SatoshiFinance DeFi Platform — Collateralized NFTs
The SatoshiFinance DeFi platform will allow NFT’s to be used as collateral when obtaining loans in a fully decentralised manner.
For example, as the NFT and tokenised asset class develops, we will see real-world assets become tokenised for ease of transaction and holding. This would be particularly beneficial for an industry like the watch industry, where a significant proportion of luxury “high-end” watch purchases have become speculatory in nature. Owners no longer wish to wear their watches but rather purchase them as investment pieces with gradual monetary growth in mind. This has only been increased in recent years with zero to negative interest rates. These owners have to initially incur the cost of purchase shipping, then perhaps storage and insurance during the ownership, then again shipping and sale commissions when selling. These can often be as high as 10% on sites like Chrono24, with most shipping companies being unwilling to ship items over $10,000 for any reasonable rate. There is significant wastage in the process as it currently stands. How can tokenisation help, you may ask?
A company perhaps based in Zurich or Geneva can operate as a central entity where people can send their watches initially, have them assessed, and receive an NFT on-chain in return. This NFT can include pictures of the watch, information such as its condition and whether it comes with a box and papers etc. The central company now stores the watch in their purpose-built facility. The owner in return receives an NFT that represents the watch and its associated real-world market value. The owner can then:
- Hold onto the watch for free in his wallet
- Trade the watch on digital markets for very minimal fees (The central Swiss-based company can charge a small % fee for each trade to cover more than cover their costs)
- Use the Satoshi DeFi platform to use his tokenised watch NFT to obtain a loan at favourable rates.
As the watch has an underlying value and market data to substantiate it, lenders may offer him a more favourable LTV (Loan-to-value) rate at a better % interest. He can then take out a loan at a mutually agreed rate against his NFT. If he makes the payments by the term, he gets his NFT back, and the lender gets his % return. If he defaults on the loan, he loses the collateral, and the lender is now, through the purpose-built smart contract, sent the NFT. He can decide to keep it, trade it on a digital marketplace or send it back to the Swiss company, pay a transaction cost and have the underlying asset (The watch) shipped to him.
This example shows the potential of tokenised assets, especially in the DeFi industry. We plan to capitalise on this future growth with an easy-to-use the functional platform of which the SFT token will be at heart. Potential use cases for the SatoshiFinanceToken in specifically the DeFi platform include but are not limited to:
- Minimum SFT held to access additional tiers of borrowing and lending. For example, 0 SFT required to lend/borrow under $5,000. 100 SFT required to lend/borrow between $5,000 and $10,000. 300 SFT required to borrow between $10,000-$20,000. ETC.
- SFT can be used to save 25% on transaction-related costs on the platform
- Many more use cases to come as the intricacies of the platform are further developed
SFT Usage & Ongoing Token Burn
As mentioned in the beginning, the company has not pre-minted any tokens, and there are no vesting schedule or “team token releases”. To encourage the continual development of the utilities surrounding SFTs, the company’s supply is directly correlated to expenditure on utility. The contract address will receive funds that users have spent on utilities such as name changes and those listed above. The funds received will be used in the following way:
- 20% burn at the end of every quarter until 6,912,116 tokens are burnt, leaving the max total supply at 30,000,000
- 30% marketing allocation to promote the use and increase the demand for SFTs
- 40% development allocation to be spent on the development of additional utility for the token
- 10% Liquidity Provider Incentive
The 20% Token burn will increase the deflationary nature of the SFT token and will be announced with the transaction address when completed at the end of every quarter.
On Thursday, the 13th of May 2021, the SFT token will be listed on Uniswap. An additional article will be published explaining how to trade and add liquidity using Uniswap for those unfamiliar with their platform. At the time of listing, the initial circulating minted supply will be in the region of 500,000 SFTs. The listing price will be $0.50 with 100% of the SFT generated through utility thus far (name changes) to provide initial liquidity. Further incentives will be made public to encourage users to provide additional liquidity.
- Circulating supply at the time of launch ca. 500,000 SFTs
- Token Listing Price — $0.50
- Initial Market Cap — $250,000
- Locked Token liquidity supplied by SatoshiFaces at point of listing — 100,000 SFT & 12.5 ETH
- Liquidity Provider Incentives will be released before Uniswap Launch
- Artwork Generating 77.5% APY at launch.
SFT Contract Address — 0xF4Ea51408E7cEcE8eB9EBBaF3bFBCEc74aC574F4
Disclaimer — The information provided within this article is subject to change and should not be construed in any way as financial advice. SFT is solely a utility token designed to interact with the Satoshi platforms. The SFT has not been subject to a token sale; all tokens are generated by SatoshiFace artwork NFTs.