THE FLRDROPS ARC:
One of the keys to the success of the FLRDrops platform is the addition of high-value NFT Art. When high-value NFTs change hands, the fees generated benefit the entire ecosystem. These assets are necessary for protocols such as PawnFi to create efficient NFT lending markets on the Flare Network. It’s obviously very difficult to create a CryptoPunk or Bored Ape level community, but we believe through Phygitals (Digital NFTs backed by a physical item) we’ve created a model worth exploring. Phygitals have the potential to bring high value real world assets onto the FLRDrops marketplace.
FLR Finance will be introducing a number of Phygital NFTs. We initially planned to distribute our Phygital NFTs through auctions, but have instead decided to use a new feature we will be bringing to Drops: Raffles! Raffles have several advantages over auctions which we believe will drive large volumes and demand for high value Phygitals to be created on Songbird and Flare:
- Raffles don’t price out most ecosystem participants if the NFT is sought after
- Raffles don’t have price cap relative to one large user’s appetite
- While purchasing more tickets may increase the odds of winning, even players with one ticket may win
- Every raffle ticket purchased generates ecosystem fees, feeding the APY Cloud
As the price of an auction rises, fewer users can afford to place a bid. Each successive bid reduces the ability of more users to participate in the auction, restricting access to the NFT to only those with more capital. However, every raffle ticket purchased can potentially increase the NFT’s perceived value such that perceived value becomes higher than the cost of a single ticket, stimulating more buys and creating a positive feedback loop.
While an auction has a more predictable top price, raffles allow for a unique mechanism of price discovery which is based more on volume. This mechanism allows the possibility of a user receiving a highly desirable NFT for a very low cost, while still compensating the artist appropriately. Effectively, this changes the market from one focused on recruiting specific customers with big bags, to one focused on recruiting a broader audience and community.
Our first raffle will take place on the Coston Network FLRDrops platform, using valueless and risk-free CFLR, as per our normal development cycle. We will also be testing the first complete contribution from the FLRLabs team, which we believe novel to the blockchain space: infrastructure for on-chain Phygital Redemptions! There will be 30 winners who will receive sticker sheets, flr finance logo stickers, and transparent “Alpha Tester” stickers!
There is no limit on the number of tickets available to mint, and users can choose to list unrevealed tickets for sale. When minting closes, ticket holders can reveal their tickets to see if they won. Winning tickets can be listed on Drops secondary market or redeemed for a sticker pack to test the new Phygital redemption module.
Following the completion of successful Phygital redemption testing on Coston, these features will be implemented on Songbird for live value testing.
If you’re interested in hearing more about our recently completed Phygital Redemption system, Flare Community will be hosting our CEO Nik Christodoulakis who will be giving an overview of our latest innovation in the coming days.