Picchi - FP collection usage permission through PRINTS staking

Picchi

usage permission through staking

FP Collection “usage permission” and PRINTS staking

The Problems

  • The FP members want to be able to hold one of the pieces of the FP collection as it is their own.

  • The FP DAO needs to increase the PRINTS token utility

Solution/Goal

Allow FP members to hold FP collection pieces through PRINTS staking, creating utility to members and real usage to PRINTS.

As a security measure, the NFT will not be transferred to the FP member, but a “wrapped version” will be minted.

How it works

  • A FP member can mint a “wrapped version” of a FP collection piece NFT. The new NFT will be identical to the original (same metadata) and unique. The original piece doesn’t leave the FP vault.

  • In return, the FP member will stake a certain amount of PRINTS, above the minimum defined per NFT.

  • The wrapped NFT is not transferable by the current owner and it’s burned once the PRINTS are unstaken.

  • Only 1 person can hold a wrapped version of a single NFT.

  • Once minted any other member can outbid the staken qty and be the new owner of the wrapped NFT. (TODO: define a minimum guaranteed hold period, and a minimum new bid percentage increase). The previous owner gets its staken qty back immediately.

  • If the original NFT leaves the wrap contract (FP Vault), the metadata should return an empty state. The wrapped version holder can still unstake and get its PRINTS back

Limitations

  • Once the wrapped version is not the real NFT, any ownership verifications or airdrops will not work in favor of the wrapped version holder.

  • Some collections might not be fully compatible with it, if their metadata needs further treatment by the exchanges APIs

  • [edited and added] Some collections Terms of Use might not allow such derivatives to be created.

Risks

By design, the proposed solution has very limited risks. The major risk is a smart contract bug, which can impact the staked PRINTS.

Example

John always wanted to hold Autoglyph #181 is his private collection. The NFT is owned by FP, but as a member, he can stake 10k PRINTS and mint a wrapped version to his wallet. This wrapped version is identical to the original, unique and backed by the real one. However, it cannot be transferred and if John unstake his PRINTS, the wrapped version would be burned.

Use cases:

User:

  • Connect Wallets

  • List all available FP NFTs and current status of each

  • Mint a wrapped version (and stake)

  • Unstake and burn

  • Outbid a current borrower

Admin:

  • Add/remove NFTs on the available list

  • Define minimum guaranteed hold period and the minimum new bid percentage increase

  • Force unstake and burn

  • Define/edit staking ERC-20 contract address

  • Define/edit the Vault address

Project Scope:

  • Smart contract development

  • UI ideation/creation

  • Frontend development

  • Training and awareness efforts

Team:

Project manager TBD

Frontend dev - Arod

Smart Contract dev - Arod

Investment:

Development cost: ~ 6 ETH

Development time: ~ 30 days

Further considerations & Future:

  • The source code will be released as CC0 (public domain)
  • [edited and added] Flash loans to allow wrapped versions to claim airdrops
3 Likes

Fantastic concept. I love the idea.

For the wrapped version - I assume these could be used just like a normal ERC 721? Eg. users could display them in online galleries, etc?

Also, you referred to this in your post - but I think a minimum guaranteed hold period is vital here. From the user’s perspective it would feel really bad to stake PRINTS to wrap an Autoglyph, just to be outbid 5 minutes later and not even have the chance to use it. So we should put some thought into what a viable guaranteed holding period is that feels satisfactory to users, but isn’t so long that it blocks other people out from getting a chance to hold the NFT they desire.

A question - is there any implication here for licensing or monetization? Eg. if a user minted a wrapped version of an Autoglyph - could they monetize that? This may be a non-factor, but interesting to think about.

Excited to hear thoughts from everyone else.

Thanks for posting this idea Shira!

1 Like

Yes, a regular ERC721!

Totally agree. This would be customizable and changeable in the smart contract

I thought a little bit about this, but I. just didn’t came up with a conclusion. This might need to be set and understood collection based, since different collections have different terms of use. Some might not even allow holders to generate derivatives.

Thanks dear. Let’s brainstorm!

I think this idea is really interesting, so I spend some time thinking about risks. The main risk is creating confusion between the original collection and the wrapped version, so we need to make it extra clear that this is not the original (probably in the title/artist/metadata?).

Other than that, I really love this initiative, and like the second order implications here of providing extra utility for PRINTS.

This is the sort of stuff that would be costly/cumbersome/risky to do with physical art collected by a group, but works beautifully with a DAO’s NFT collection. Really innovative design!

1 Like

One additional idea: artificial holder could be allowed to flash-loan out the actual NFT to claim airdrops. Unquestionably adds additional risk, but we recently did this in our protocol and no issues were discovered in audit: protocol/HookERC721MultiVaultImplV1.sol at main · hookart/protocol · GitHub

1 Like

I do see this risk as well. TBH I see the risk of the wrapped version be seeing as fake greater than the risk you mentioned, since the wrapped version is not transferable.
The easy solution is to create a middle server that edits the NFT metadata in order to customize it, explaining what is the wrapped nft and what it represents. The down side is that the tokenURI would point to a centralized entity, rather than point to the original NFT tokenURI.

That’s fantastic. That came to my mind yesterday. For some reason I forgot to mention it in the “Further considerations & Future” section I created for it :slight_smile: I’ll add it now

I may be making a mistake here in terms of economics or design (lmk haha), but maybe an idea could be to use something like the erc-998 standard to allow members to mint and stake on one type of bag from different NFTs.

Like, I minted and staked the FP wrapped bag that has: 2 deafbeef, 1 MSG, and 4 avid lines.

Hey @matheus, I’m not sure I understood it correctly. But if the idea is to mint a token that owns a set of other wrapped tokens (using the ERC-998) I think that could be interesting. However, I’m pretty sure this would be an overkill design for now. We probably should start with a simple PoC

1 Like

exactly that!

I agree with you that starting with a simple PoC is better.

1 Like

Really interesting.

But I have a question: how many people are interested in doing this?

I very much appreciate and understand the desire for individuals to show-off the collection.

In fact, I’d go even further and say we should find ways for all of the membership to showcase the collection. Perhaps all of us change our PfPs to a FP autoglyph for a week? Tweet this out. Change our bios, etc.

But, does this really need a blockchain solution?

How is the end result different than just downloading the image and putting it on a screen at home or as a PfP / header?

If a lot of people are interested in doing this. I’d love to hear it so that we better understand the risks/rewards.

1 Like

Also, trying this out on Twitter as an example :slight_smile: https://twitter.com/agreenberg/status/1569030123466231808?s=20&t=20ffIAjufmKR70Zwkj7m3g

I’m not sure, but I have heard of several cases in which people wanted to make this happen somehow. A more complete study can be done but I think it’s cost is almost as big as developing the concept itself.

The idea here is not to raise the awareness of the FP collection, although I think it’s also important

I think we def need a blockchain solution. think it’s way more valuable when you have a NFT that’s backed by the original piece than just copy the image. TBH I think it’s completely different as it preserves the vast majority of the original NFT value compared to zero value in image copying process.

I hear what you’re saying, but I’m still not convinced.

This feels like a solution in search of a problem.

I’d like to hear from members or potential members who would be interested in this.

I’d also like to hear an assesment of if this presents any risk to our assets (even if it’s a very small risk).

What does wrapping an NFT to hold in one’s own wallet allow one to do past the act itself of holding a wrapped version?

Interested in hearing from people that actually want to hold a wrapped version and if so, what it allows them to do (to echo Ari’s point).

This seems like something that would come out of a Fingerprints “research department” for the benefit of the greater NFT community (which would be cool), rather than something that would have too many financial benefits for the DAO.

1 Like

Nice idea @renatoshira, definitely thought provoking.

Once upon time I attended an educational institution that allowed you to borrow works from its art collection to decorate your living quarters. Was quite a popular service. This brings me somwhat similar vibes. However, I do think @agreenberg is right to be skeptical – our works aren’t locked away in a basement archive, they’re freely viewable by all. So is this really a desired product?

I’m 50/50. One one hand, it would be cool to have the wrapped version in my wallet, on my digital frame etc. – I mean, it’s a form of ‘ownership’, right? And this form would be quite innovative.

On the other, I wonder if the novelty wears off pretty quickly. And it’s a complicated solution to build.

Thought – wonder if this could be wrapped into the conversation around introducing an ERC721 version of Fingerprints membership. There’s been discussion there on whether we could make the NFT membership cards more interesting to holders. Perahps they could cycle through displaying our collected works (a-la SALT V4), or we could periodically update to show works in a more curated way (a-la Proof of Beauty’s “Public Piano”)?

1 Like

This is great and I fully support it.

One thing that I think would be positive at the start is to only allow a subset of the Fingerprints collection to be available in this system, i.e. limiting supply, that way there will be more competition for staking.

Something like having 1/4th of each collection available to be “lent” might be a simple way to implement this.

1 Like

Ya this is a fun idea. I could see the mechanics of this becoming a huge point for people to explore FP’s collection and even join as a member. I think we should be pursuing initiatives like this as frequently as possible, as long as it does not cost too much. Thanks to @renatoshira for bringing this forward.
I support this.

1 Like

After some further reflection, I think this would definitely be interesting as a public utility if open-sourced as suggested in the initial post. Other DAOs and communities could use it as they saw fit (and for whatever purposes they saw fit) — having the greater NFT community tinkering with it may unlock use cases that we may not have considered as well. Would be an interesting product for Fingerprints to release.

1 Like

Sounds reasonable. That’s the reason why there should be an “add/edit” features to include and exclude NFTs from the available list

They aren’t locked but the members don’t feel entitled to use them as if they are their own pieces, and they really shouldn’t because they’re FP’s. So we could argue that the pieces are now somehow “locked in a basement”

It seems complicated, but if you look this from cost perspective it’s around 6ETH. Not “complicated” at all. A simple institucional website could cost much more.

I believe this is a different use case, a very interesting one as well

2 Likes

I would be interested in staking some PRINTS to try this out. I would assume @renatoshira as well :slight_smile:

Overall, I see 3 main benefits of this proposal

  1. Less PRINTS in circulation (if people use this feature)
  2. Shows we can built something cool (even if there’s limited use of the feature)
  3. Creates a certain precedent for people proposing new features for PRINTS, funded by the DAO, to create new utilities for our token
4 Likes