Blockchain projects are finding it easier to raise capital through token offerings as excitement builds around innovative use cases across industries, from decentralized finance to gaming. DEX AMMs like Uniswap have proven to be the most efficient way of starting a liquid market for any asset. Young thinly traded projects, though, still face significant liquidity risks arising from short-term speculative capital investing in crypto tokens and inefficiencies in current AMM models.
Bunicorn is an Automated Market Maker (AMM) for the Binance Smart Chain designed to reduce liquidity risks in token offerings. The DEX unifies several innovative AMM models to reduce impermanent loss and slippage, and create a fairer token distribution process. They include Balancer-style liquidity bootstrapping pools (LBP) and Kyber-style Amplified pools. For more details, please see A Deep Dive on Bunicorn.
Projects, however, still face significant long-term liquidity challenges following token offerings owing to the high level of token sell-offs after the distribution of liquidity pool rewards. To support stable, long-term liquidity, Bunicorn has developed a unique time-locked NFT. This Deep Dive Into Bunicorn NFTs examines the need for time-locked NFTs, their bond-like features, and various yield-enhancing opportunities when collecting, selling, and auctioning Bunicorn NFTs.
The risks of Liquidity Mining
Liquidity Providers (LP) add liquidity (depositing tokens, typically trading pairs) to a pool in exchange for fees paid to the pool for swapping, lending, and other DeFi services. Liquidity mining is a result of yield farming. The process involves getting tokens as a bonus besides these usual returns.
LPs seek to optimize their returns by opportunistically moving their funds to the pools with the best annual returns (APY). In exchange for locking their funds in the pool, they receive rewards in the form of more tokens. Generally, new tokens offer the highest rewards to entice investors to add liquidity to their pools. Though prudent investors also will pay attention to risk-adjusted returns, since the percentage of returns is directly proportional to the risk of the pool.
However, another liquidity risk is raised for tokens when LPs immediately sell their token rewards. As a result, yield farming projects face high liquidity risk from token dumps after mining rewards are paid out. Also, a high APY yield farming program introduces a higher inflation rate of the token supply.
What Are Wrapped NFTs?
Bunicorn reduces these token price devaluation risks by locking up farming rewards in wrapped NFTs to take them out of circulation. These NFTs continue to provide value including trading opportunities to liquidity miners.
To incentivize liquidity miners to hold onto their tokens, we have developed a unique product that wraps up farming rewards (VBUNI) into a time-locked NFT. Each NFT has a vesting period, say 1 month. Once the vesting period expires, VBUNI can be converted into BUNI tokens. Through these convertible NFTs, tokens are separated from the liquidable supply for a period of time.
Value as Gamified NFT Collectibles
The NFTs as collectibles can be ascribed additional value. We intend to make a universe of gamified cards with unique artworks generated algorithmically similar to that of Crypto Kitties or Polkamons.
Rarity — Bunicorn ranks the rarity of the VBUNI NFT collectibles based on the number of underlying assets wrapped in that token and the duration of the vesting period. For instance, a BUNI token with a value of $1M locked in 1 month would be classified as Super Rare. Cards can be enhanced until a certain level at which they are fully mature (max). The following list should be looked at as a guideline on how far a card is able to level:
- Normal
- High Normal
- Rare
- High Rare
- Super Rare
- Legend
In order to enhance the card, the user must first choose the card they wish to enhance and then select one or more enhancer cards with the same vesting schedule. The enhancer cards will be consumed and the locked-up VBUNI will be added up to the enhanced card. With this mechanism, users will have more demand to buy low-level cards for the fusion instead of converting them back into real BUNI.
Apart from the rarity, we’ll add other attributes to our card set to make a real game in the future including:
Stamina: the attribute that allows you to quest and do certain events. The more Stamina you have at your disposal, the longer you can go without stopping.
Attack Power: the attribute that allows you to do Boss battles, as well as Player vs Player (PvP) combat.
Defense Power: the attribute that allows a player to defend themselves against attacks from other players.
Traits:
- Agility
- Charisma
- Intelligence
- Strength
- Willpower
Selling NFTs Before Vesting Expiry
The NFT with time-locked tokens acts like a bond. It has speculative value and can be sold at a discount in the secondary market before the vesting period is up. In other words, holders can trade and auction these NFTs in other marketplaces and make them liquidable.
Besides, the NFT holder can also collect, enhance and evolve their cards, participate in our gaming events and resell his Super Rare asset at a price much higher than the underlying BUNI value in other NFT markets. Therefore, Bunicorn has achieved two goals for this feature: separating BUNI from the circulating supply but still making them liquidable in the form of NFT assets.
NFT MarketPlace
We are making our own NFT marketplace so that users will be able to sell, auction their time-locked BUNI NFTs. Users will also be able to collect, enhance (level up) their card’s level by making a fusion between lower-level cards.
The rarest cards will be featured in our hall of fame.
This marketplace will also organize seasoned marketing campaigns along with gaming events/gacha along with our introduction of new tailor-made card packs.
Other than Bunicorn generated NFT, this marketplace will also allow users to mint, buy, and sell NFT tokens from their own artwork or bring over their NFTs from other platforms.
And we do believe in the future of value-backed NFT, so Bunicorn will make it possible for locking other assets into the NFT such as BNB or BUSD, and turn them into bond products.
How to get Bunicorn NFT?
The only way to mint Bunicorn NFT is through our yield farms. Currently, there are two kinds of farming pools that users can participate and mint our NFT:
- Stake BUNI, earn BUNI via our first BUNI pool. In the future, you can stake BUNI to earn more kinds of tokens as we’re onboarding new token teams to the platform.
- Stake BPT (Buni Pool Token), earn BUNI. BPT is what you get after you provide liquidity to an AMM pool.
About Bunicorn
Bunicorn is an automated market-making decentralized exchange that is built on the Binance Smart Chain (BSC). Bunicorn inherited all of BSC’s strengths while being powered with advanced features.
- Flexible AMM pools with up to 8 tokens, any weights.
- Amplified pools that allow swapping between stablecoin pairs with lower slippage and higher capital efficiency.
- Liquidity Bootstrapping Pools.
- Smart order routing that automatically splits your swap across several pools for optimized price.
- Dynamic fees adjusted based on the underlying volatility.
- Liquidity providers can also join multi-token pools with a single asset.
- New innovative yield farming model that vests the earned reward and wraps them into NFT collectibles.
Learn more about Bunicorn:
