The NFT industry needs more protocol layer innovation
The current protocol and technology development around NFTs is still in the initial stages (minting, transferring, etc.), and the underlying protocols necessary for the ecosystem such as trading and value discovery have not yet formed an industry consensus with network effects. SphinxUP focuses on protocol layer innovation in the NFT financial infrastructure, enabling value discovery and trading protocols at its core. SphinxUP achieves this through a Web3 product matrix which includes data analysis, tracking, value discovery, and asset valuations. Sphinx Up endeavors to become a new cornerstone for the NFT industry.
Problems with the current NFT asset price discovery mechanism
The NFT space is the next area of digital currency with great potential, and price discovery is the first major issue that needs to be addressed in the NFT space. A capital-efficient price discovery mechanism will enable participants to trade faster, increase NFT liquidity, and allow NFTs to become collateral and facilitate a rich system of NFT-based derivatives.
● Inefficient funding
● No continuous pricing
● Low correlation
● Low liquidity of NFT assets
NFTs need a more capital efficient price discovery mechanism
The development of the NFT industry is measured in days, similar to BTC in its early days. The development of NFTs has shown many underlying 0 to 1 innovation. In June of this year, Floor Price emerged and Opensea officially adopted Floor Price instead of Average Price to mark the price change of NFT collections. At the same time, as the NFT market continues to grow in fervor, more liquidity providers are beginning to offer liquidity to the Top collections on Opensea.
It is worth noting that, unlike the FT market, NFTs have been very inefficient in terms of capital utilization with existing price discovery mechanisms. The lack of a sound price discovery mechanism has prevented NFTs and related financial derivatives businesses from being conducted. SphinxUP overcomes this by enabling efficient value discovery of NFT assets through the SphinxUP NFT valuation model through data analysis and value discovery.
Introduction to the SphinxUP NFT valuation model
NFT’s value discovery model = ownership history + scarcity + supply and demand + liquidity premium + market expectations + utility
The SphinxUP-powered NFT asset pricing model will allow developers to create NFT classifications based on metadata. It achieves this through a standard contract interface via proxy contracts, collects on/off-chain transactions and quotes of NFTs, historical transaction data of similar projects. It can predict reasonable NFT transaction prices through algorithms that integrate transaction methods, volume, liquidity, and weights for data statistics.
SphinxUP will provide a new valuation model for NFTs and many more digital assets and will enable:
● An efficient NFT marketplace that provides value discovery for NFT assets in an automated manner.
● NFT Defi Derivatives Market
● NFT Broker, NFT Trading Platform, NFT Digital Artist Community
⚪ Empowering NFT eco-business and improving capital efficiency through an efficient NFT value discovery model
● NFT Index
⚪ Such as CryptoPunks Index, Autoglyphs Index, Bored Ape Yacht Club Index, etc
The value of the SphinxUP valuation model for collectors, users, and developers
Collectors can use SphinxUP’s NFT valuation model to assess whether NFTs are worth investing in, and developers can consider how to increase the value of NFTs to attract users and investors based on this value framework. Notably, NFTs create a number of new ways for developers and asset owners to create value
● Valuation and price discovery
⚪ Currently, it is difficult for users to accurately calculate the value of their NFT asset holdings. With SphinxUp’s valuation of each Top NFT piece, users can know the total value of their current assets, as well as the cost of their positions.
● Data Analysis
Sphinx Up provides liquidity prices to its users, often through data analysis of the trading of the platform’s existing assets, combined with DMI algorithms. Therefore, it is important for the platform to have a third-party data analysis tool to provide it with accurate and reliable fundamental data.
In short, SphinxUP is an NFT financial protocol that uses price discovery and aggregated trading as the underlying layer to improve the efficiency and liquidity of the NFT ecosystem through a Web3 product matrix.