Staking NFTs to the Method NFT Vault
The day has come and we are soon releasing the ability to stake ERC-721 tokens to the Method NFT Vault. It’s live on Ropsten and the final testing has begun. All newly minted Method NFTs will have this upgraded capability.
We already allow our Method NFT holders to stake ERC-20 tokens through our MTHD-ETH LP staking rewards programs and Airdrop rewards programs, but now we can solve for a number of additional use cases:
- Staking liquidity provider NFTs
- Staking art NFTs
Other than liquidity mining rewards for new exchange protocols, such as Uniswap V3, you might be wondering the benefits of staking NFTs to an NFT vault. The fact that multiple assets can be staked and stored in the Method NFT Vault creates very powerful applications for DeFi. One of the largest is for fractionalized ownership of the assets stored in the Method NFT Vault, in what we’re calling Exchange Traded Vaults (ETV):
Collections of financial assets
As noted, initial benefits of the Method NFT Vault is to enable more safe and secure liquidity mining to earn rewards. However, since any ERC-20 or ERC-721 token can be staked to the Method NFT, there is a big opportunity to create fractionalized versions of Method NFT Vaults that hold a basket of individual assets or LP tokens that will ultimately provide a more diversified stream of rewards.
A close analogy to this concept in the TradFi world is an Exchange Traded Fund (ETF) in which a collection of securities grouped by certain attributes are traded as a single stock. Ultimately, the goal is greater diversification and lower risk for liquidity mining.
Digital art collections
NFTs gained prominence due to the focus on digital art and the astronomical prices that people paid for works such as the $69M paid for Beeple’s “The First 5,000 Days” as referenced in an article in the New York Times.
Many collectors have all types of art, often in storage or private collections. While fractionalized ownership of individual artwork exists (albeit as a relatively small market), fractionalized ownership of entire art collections has been difficult — it’s generally up to the individual investor to create their own collections.
With the Method NFT Vault, any number of NFTs (ERC-721 tokens) can be staked to it and ownership divided by fungible ERC-20 tokens, leading to better diversification and creating markets that don’t currently exist.
Where this all leads
As was the case from day 1 of our project, we seek to increase the adoption of NFTs by all protocols in the DeFi space to unlock new use cases that were previously impossible. With the release of Uniswap V3 today, a major player in the DeFi space has signaled the potential of NFTs in DeFi.
By allowing our Method NFT Vaults to hold any NFT, we are taking the first crucial step to onboarding new cases such as Exchange Traded Vaults for liquidity provisioning.
After the completion of our rollout onto Polygon, we will soon begin delivering on the use cases listed above.
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