What Is A CollectionPool?

A CollectionPool is a liquidity pool that represents a set of automatic buy and/or sell orders for an NFT denoted in its base currency. A CollectionPool’s owner is an Ethereum address ownerAddress if and only if the ownerAddress is the ownerOf() the LPToken (short for Liquidity Pool Token) tokenId corresponding to the CollectionPool address. Each LPToken is represented by an ERC721 token.

CollectionPools are deployed from a factory contract called CollectionPoolFactory which also the ERC721 contract. In order to check the correspondence of an LPToken tokenId with a pool address, one can use the poolAddressOf() function.

Given that we identify CollectionPool ownership entirely with ownership of the LPToken, ownership of the AMM activity and liquidity can be easily composed with other functions and traded. LPTokens accrue the fees from trading activities for a particular pool, which are separately accounted for.

For Collection.xyz v2, we support ERC721 (for NFTs, ERC1155 coming in a future version) and ETH/ERC20 on the other side. For convention’s sake, for a TOKEN-NFT pair, we consider the TOKEN pair the bid side, and the NFT the ask side.

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