What is FloorDAO?
FloorDAO is a decentralized NFT market-making protocol. It enables deep, sticky liquidity for all NFT collections contained in the FloorDAO treasury. FloorDAO uses the bond & rebase mechanisms pioneered by OlympusDAO to accumulate productive NFT liquidity, which is then deployed in strategies such as NFTX vaults to generate yield.

How does it work?

Decentralised exchanges such as NFTX already exist for NFTs and they use the underlying mechanism of Uniswap V2 to create instant liquidity for buyers and sellers. NFTX works by pooling NFT floor items together in a vault, which mints a fungible ERC20 token eg. PUNK that can then be traded on exchanges like Sushi. These tokens are backed by the vault’s NFTs and can be burned to redeem NFTs from the vault.
From this mechanism a marketplace emerges, where buyers purchase PUNK on Sushi to redeem CryptoPunk NFTs from NFTX and sellers mint PUNK from their CryptoPunk NFTs on NFTX to instantly sell on Sushi.
Market makers earn the Sushi trading fees but more importantly they also collect the NFTX vault fees, which are paid in the vault token. NFTX fees range from 1–10% depending on the vault and yields are often in excess of 100% APR.
Decentralised exchanges like NFTX have existed for a while but lack deep liquidity for these tokens, holding them back from wider market adoption in the DeFi world.
FloorDAO will create deep liquidity for these community-voted blue chip NFTs — starting with CryptoPunks.
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