NFT Underwriting
Staring with Genesis Legions, every NFT Collection will have a dedicated underwriting pool, with its own unique mechanism for calculating put option premium fees.
Over time standards will develop to enable anyone to launch an underwriting pool for their NFT collections.
As an underwriter, you will be able to choose which NFT collection you would like to underwrite by depositing ETH into that collection's unique underwriting pool.

Why underwrite?

  1. 1.
    To buy NFTs you want below the current price.
  2. 2.
    To earn yield on USDC deposits via premium fees.

How does it work?

  • All ETH minting proceeds are controlled via the DeFrag DAO Treasury. After minting Metamaticians, NFT holders will have an opportunity to propose & vote on an NFT project they believe should be used initially for underwriting.
  • Once the first NFT put option underwriting pool is deployed, ETH mint proceeds are converted to USDC and deposited into the underwriting pool to jumpstart borrowing. Borrowers will be able to deposit eligible NFT assets as collateral and instantly generate a loan. Based on average value of your NFT, volatility and borrow amount, the protocol will automatically lock required USDC from the pool to underwrite put options for borrowers NFT assets. You can think of this as insurance that guarantees liquidity in case borrower's NFT needs to get liquidated.
  • The first underwriting pool for Genesis Legion NFTs by Treasure DAO will kick off Phase 1 during which underwriters will not be able to deposit additional liquidity for NFT put option underwriting on top of what they deposited during the mint. This puts a limit to the amount available for borrowing and is done by design to make sure everything is running smoothly before we expand underwriting capabilities for additional NFT assets.
  • In phase 1, each Metamatician will proportionally receive fees generated from writing NFT put options premiums. These fees will accrue in perpetuity. Once additional deposits are open, you will be able to stake additional USDC if you want to. Your Metamatician will track how much liquidity you've provided to the LP.
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Why underwrite?
How does it work?