☘️LUQ Token
Last updated
Last updated
When an NFT is valued above the floor for a collection, i.e., it is an atypical NFT, these NFTs can no longer be redeemed directly with NFT Index Token via the Redemption Mechanic. Instead, the LUQ Token is issued whenever the Redemption Mechanic randomly selects an atypical NFT.
❗ Atypical NFTs only enter the MarketVault via defaulted loans, or if a seller accepts the floor price for the collection in a sale to the MarketVault.
Removing free optionality from the Redemption Mechanic potentially imposes large capital requirements. The introduction of the LUQ Token reduces those capital requirements, requiring the redemption quantum to equal the highest valued floor NFT in the MarketVault rather than the highest valued NFT in the MarketVault. More arcanely, $LUQ substantially reduces the gas costs associated with the redemption mechanism by obviating the need to cycle through an array containing each atypical NFT.
Atypical NFTs can be redeemed at any time by burning the requisite amount of LUQ Tokens. $LUQ price of redeeming an atypical NFT is equal to the amount of NFT Index Token issued in the loan for which it was used as collateral.