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MarketVault

The MarketVault is where NFTs sold to the protocol or held as collateral are kept. NFTs that have been sold to the MarketVault can be purchased by
🧑‍🎨
Collectors using the redemption, Buy-It-Now, or Bids mechanics. The MarketVault also directs the minting and burning of the
🖼️
NFT Index Token, which allows the token to track its backed value via arbitrage.

Motivation

The core difficulty in creating a lending protocol for NFTs is the problem of liquidations. NFTs make a poor collateral type in traditional lending protocols because the principals of loans are dominated in fungible tokens, and it is difficult to quickly convert an NFT into a fungible token. The MarketVault underlies a new type of asset capable of receiving a variety of NFTs and producing a fungible token, in essence fungifying the NFT. This provides the guaranteed, instant counterparty necessary to efficiently carry out liquidations.
Interacting with the MarketVault is permissionless; it is not just a guaranteed counterparty for the protocol, but for every market participant. Since it is able to receive multiple types of NFT and produce a single fungible token, each new collection whitelisted to the MarketVault builds upon the liquidity of the previous collections, allowing it to accrete upon itself. Rather than a variety of fragmented vaults with shallow liquidity, the MarketVault provides a unified, global source of liquidity for NFT trading.

MarketVault Sections

The MarketVault contains NFTs in two conceptual sections: Unreserved and Reserved.

Unreserved

Unreserved NFTs enter the vault when a
👨‍💼
Seller directly deposits their NFT into the MarketVault in exchange for
🖼️
NFT Index Token or when loans collateralized by NFTs default or become liquidated. NFTs in the Unreserved section of the MarketVault can only exit via the
🎰
Redemption Mechanic.

Reserved

Reserved NFTs enter the MarketVault as collateral for loans. These are NFTs that the
🔓
MarketVault is holding as collateral, but does not own. The
🙋
Borrower maintains the rights to these NFTs. NFTs remain reserved as long as a borrowers is not liquidated. At the end of a loan term, ownership of a Reserved NFT returns back to the borrower.

Spreads

Each sale made to the MarketVault incurs a two percent (2.0%) spread from the appraised value. That spread is split between
🍄
FUNG Token holders and staked
🖼️
NFT Index Token, with twenty percent (20%) going to staked $FUNG holders and eighty percent (80%) going to staked $NFT holders.

Collections Whitelist

The protocol will only accept whitelisted NFT collections. The following NFT collections are currently on the whitelist:
  1. 1.
    Bored Ape Yacht Club
  2. 2.
    Crypto Punks
  3. 3.
    Mutant Ape Yacht Club
  4. 4.
    CloneX
  5. 5.
    Azuki
  6. 6.
    Doodles
NFT collections can be added to the whitelist through
🏦
Governance. In order to be added, a collection must have a Chainlink price feed. No collection with a total marketcap of under 50MM was included in the initial list.