Liquid Collectibles Explained

Henry The Apeth gives an overview of the NFT tokenization process on Liquid Collectibles, using NFA’s as an example

11/12/2021
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This article explains the tokenization of an NFT through LiquidCollectibles. The benefits and risks involved. Along with why LiquidCollectibles is magic for existing holders of floor level NFT’s.

Worth

The tokens are free market and traded on apeswap like any other token, their inherent value is that you can spend 105 of them on an NFT from the pool, so they are worth in essence approximately 1/105 of what the market would expect the cheapest floor of that nft to sell for on nftkey or any other marketplace. As long as you hold 105 NFAi there will always be an ape in the pool for you to claim. You own it. And there are plenty of additional benefits to owning the NFAi, even small amounts. The price is maintained through arbitrage, if NFAi goes to low it will scooped to claim apes and sell on the market. If NFAs go up on the market, NFAi rises with it for the same reasons.

LP Staking

The primary benefit in my opinion is the LP Staking (DYOR on LP staking, impermanent loss). As of this writing the 3 NFT collections on Liquid Collectibles are paying out between 840% — 1360% APR. There will be one more havling in two weeks. Other market factors aside expect approx 420%-630% til the end of time.

Even more staking options are available by tokenizing Apes. Tokenizing a T1 Ape rewards 95 NFAi Tokens. This can be paired as with BNB to enjoy some of the highest BNB LP APR’s around. Although instead of those high APR’s being paired with some crap pump and dump token that no one cares about, it is instead paired DIRECTLY WITH THE NFA COLLECTION via the NFAi token. Their values inherently and forever intertwined.

Supporting your own NFT collection by holding its token!

Just like holding any project’s token, when you hold you help to maintain token price. By holding NFAi, any amount, you are holding part of an ape, and you are holding its value! It’s a win win, you get to invest more in your favorite collection NFAs, but you don’t have buy a full ape if you can’t afford it, or if you got some bucks, buy hundreds of the NFAi, kick that price to the moon. What to do with those NFAi tokens? Hold them like any other project. Between the rise of the NFA floor and previous stated staking options, there plenty of value to be had.

Warnings/Risks

Not an all-inclusive, DYOR.

-The biggest risk of loss is not understanding that tokenizing a NFT does not guarantee you will receive the same NFT back. Using NFA’s as an example, only Tier1 Apes should be tokenized. Tokenizing a higher tier may result in being returned a low tier ape. Which would cause a severe loss of value

-Tokenizing an NFA give you 95 tokens, claiming cost 105. If you ever want to claim an Ape back out of the pool, it will automatically lose 10%.

-Normal risk factors involved with LP Staking, suchand Impermanent Loss. For a more thorough explanation of Impermenant Loss click here

-There is a 4% deposit fee on staking. This is paid for in approx 1–2 days based on current APR at time of writing.

Henry the Apeth’s personal opinion DYOR

The high apr’s pay for all of the above scenarios and fees in the first couple of weeks. For me it was a no brainer and I have absolutely no regrets so far, I’m in big (for me) on several NFT-BNB pools on the site.

Visit LiquidCollectibles website to learn more

https://liquidcollectibles.io/