Collection 1.00: Patch Notes

Written like a patch note for gamers, just for you, anon.

New subclass system: Collection AMM now allows you to create/ trade submarkets of NFTs.

• Prior to patch 1.00, it was impossible to create submarkets of a collection you wanted to trade on. In the following, we’ll take 3 examples, Solid Gold Fur Bored Apes, M2 Mutants, and male Azukis. You could either participate in a bidding process for individual items or on the level of a collection, but not in a two-sided way for any subgroup.

  	Bid side for a Golden Fur Trait	Ask side for a Golden Fur Trait
  Opensea	Put a collection offer with a trait filter	For the Golden Fur Apes you own, you have to put them up for sale individually
  X2Y2	Not possible - trait filters don’t exist	For the Golden Fur Apes you own, you have to put them up for sale individually
  Sudoswap	Not possible - trait filters don’t exist	You can put a limit sell for a Golden Fur Ape, but it cannot be put in a 2-sided AMM trading pool because the bid is the BAYC floor which is far away.
  Blur	? - Couldn’t find a filtered collection offer

• Possible participation of non-floor NFTs in current DeFi protocols is sporadic because they either value your NFT as a floor NFT of the Collection (Benddao, Sudoswap), or are p2p loans (e.g. NFTfi) which don’t scale.

  	Type of Protocol	Can it attribute a premium to non-floor NFTs?
  NFTfi (the protocol)	Borrow/Lend	Yes because it is a 1-1 loan origination platform
  Benddao	Borrow/Lend	No
  Sudoswap	AMM	No

• How it’s done: Advanced trading is open when a Collection pool creator creates a pool with a Merkle root corresponding to the set of Token IDs.

  • e.g., [73, 197, 232, 528, 544, 793, 811, 830, 1726, 1734, 1837, 2089, 2177, 2489, 2646, 3072, 3105, 3439, 3749, 3863, 3928, 4400, 4580, 4614, 4873, 4959, 4980, 5233, 5383, 5742, 5809, 5953, 6388, 6473, 7090, 7398, 7527, 7940, 8552, 8650, 8664, 8817, 8824, 8861, 9186, 9572] for the Fur - Solid Gold trait for Bored Ape Yacht Club. This can be done on any UI, including the Collection UI.

  • Collection backend indexes events whenever the pool Merkle hash is created or modified and associates each token ID with a pool.

  • Whenever one trades with the pool, a Merkle proof is provided, which allows you to buy or sell into the pool. This can be created client-side (frontend and/or backend) by a Javascript open-source library we provide.

• Merkle root trading pools (one-sided or two-sided) also allow you to bring your submarket to endgame quest content such as the RewardVaults (see below).

New items: LP tokens now represent ownership of your pool

• Creating any Collection AMM Pair now gives you an LP token for each pool. Ownership of a pool is now 1:1, represented as an LP token

• Prior versions of NFTFi have no such representation

• This can be staked into further protocols (Collection provides the RewardVault endgame content), which form a strong ecosystem

• This allows secondary market transactions for pool ownership

• Balance changes:

  • LP tokens, in keeping with the rest of DeFi, now represent a claim on pool fees - economic activity generated by the pool

New endgame quest: LP tokens now allow you to instance your liquidity into the endgame RewardVaults - choose from 3 gauntlets: RewardVault, RewardVaultDraw, and SingleSidedRewardVaults

• Collection vaults allow for liquidity to be incentivized in all-weather conditions.

• The liquidity of the market hence can be increased by the endgame content of RewardVaults. By providing a route to compensate the market makers for providing systemically important liquidity at particular points.

• NFT Collections can create their own endgame vaults to reward players for providing liquidity.

• The endgame quest is as follows: the player must collect LP tokens for the Collection AMM pair they’ve created. These can be obtained by creating these pairs or purchasing them on the secondary market. Once the player has LP tokens, they can instance their liquidity into the endgame gauntlet of their choice.

• You as an NFT Collection:

  • You are able to create instances of these endgame vault types:

  • In the RewardVault gauntlet, you can set ERC20 rewards for a collection or any subset thereof, boosting market liquidity for these collections

  • In the RewardVaultDraw gauntlet, you can set any combination of ERC20 and ERC721 rewards as a draw for the collections, boosting market liquidity for these conditions

  • In the SingleSidedRewardVault, you can set ERC20 rewards for both the bid side (ETH or ERC20) and the ask side (NFTs)

• You as a player:

  • In the RewardVault gauntlet, the player can earn rewards by providing liquidity to the market. The more two-sided liquidity the player provides, the more rewards they can earn.

  • In the RewardVaultDraw gauntlet, the player can earn rewards by providing two-sided liquidity and stand to win prize draws. The more tickets the player has, the more likely they are to win.

  • Explore the vaults that have been created, participate in richer endgame content

New spells: New curves such as sigmoid

• Curves such as sigmoid have been added to the mix to enable more expressiveness

  • Sigmoid allows you to specify an effective price floor and ceiling to the items you buy, and determine the steepness of the middle part

Nerf: Protocol fee has been nerfed to 0%, and a carry model if it is increased.

• Protocol fees are set as 0%. Individual pool creators can set the royalty and pool fee % they so desire.

• A flat protocol fee of 0.5% is out of keeping with the rest of DeFi, Collection believes the protocol should be making money only when your underlying users make money. Therefore the default method of determining protocol fees will only be as a percentage of user fees (that they make from their AMM activity)

Developer notes: All of the above will be open-sourced under the AGPL-3.0 license after Ethereum mainnet launch

• Collectionswap contracts: https://github.com/collectionswap/collectionswap

• Javascript library: https://github.com/collectionswap/fummpel

Open beta: Goerli

• Private beta on Goerli: December 2022 (completed)

• Open beta on Goerli: We will run an open beta on Goerli in Jan (live)

• Try out our protocol: and please give us feedback at our Discord https://discord.gg/collectionxyz