Features of the Flooring Protocol

NFT Shred, the concept is not new, mainly to solve the liquidity problem of NFTs. Users can hold NFT shreds and trade with them. The unsuccessful shred applications are mainly influenced by two factors:

• Whether NFT is currently a hot topic in the market. NFT was very popular in 2021 because users earned wealth by trading NFTs like BAYC. The inherent artistic value of NFTs was often overlooked. NFTs like BAYC and Azuki were significantly overvalued. So, NFTs started cooling down after being popular for 6 months.
• The value of NFTs themselves. So far, NFTs have been criticized. Hype has made NFT creators earn a lot of money, while many users who hold them are stuck. The value of NFTs is difficult to assess, making it challenging to use NFTs for collateral or loans.

The biggest feature of the Flooring Protocol is to anchor NFTs by generating μTokens and trade uTokens instead of NFTs themselves.

How Flooring Protocol Works, What are uTokens and FLC Tokens

Users deposit any series of NFTs, and corresponding uTokens will be generated. For example, if you deposit 1 BAYC, 1 million uBAYC will be generated. Users receive a quantity of 1 million uBAYC. Then, in the market, uBAYC tokens are traded. If users want to redeem the originally deposited BAYC NFT, they use 1 million uBAYC to buy it back. However, it won’t be the original BAYC; instead, it will be a randomly selected BAYC NFT from the treasury. The number of BAYC NFTs in the treasury depends on how many users put their BAYC NFTs into Flooring to exchange for corresponding uTokens.
The price of uTokens is anchored to the Floor price of that NFT series.

To incentivize users, the FLC token is the platform token for Flooring. When users exchange NFTs for uTokens, they also receive FLC token rewards. FLC tokens can be used for platform staking, liquidity mining, and other future functions.

What if a user believes their NFT is worth more than the floor price but still wants to exchange it for uTokens?

Users can exchange their NFT for 1 million uTokens by pledging FLC tokens and placing the NFT in a vault, while also setting the vault’s effective duration. If the user does not renew or redeem the 1 million uTokens by the expiration date, the NFT goes into the treasury.

Issues with the Flooring Protocol

Because the original purpose of NFTs is to digitize artwork, they have uniqueness. For high-end players, each piece of artwork has its personal appreciation value. Therefore, the market demand for NFT storage is on the rise. Most NFTs are currently stored on centralized servers like AWS, and on-chain, they are just a set of attribute data about NFTs.

So, the players attracted by Flooring are mostly those who want to engage in NFT trading and speculation. In addition, if NFTs go into the treasury instead of a vault, it means that the ownership of NFTs belongs to Flooring, not the players. There are also many doubts about whether players are willing to hold FLC tokens.

Price Estimation for FLC, the Platform Token of Flooring Protocol

The total supply is 25 billion tokens, with 40% going to community supporters, 25% to the treasury, 20% to core contributors, 5% to strategic investors, 5% to DEX AMM activity pools, and 5% to CEX market making.
The treasury currently holds 914 Azuki Elementals, 220 Azukis, 191 Pudgy Penguins, 445 y00ts, 110 BAYCs, and more, valued at 150 million USD.

So, the estimated value of FLC is 0.004 USD, but it is listed on the BingX exchange at the current price of 0.007 USD.

Affected by the overall market situation of NFTs, NFTs are not currently in the spotlight. Therefore, it is estimated that the price of $FLC tokens will not rise until April 2024.

Risks Associated with FLC

In addition to listing FLC tokens on CEX, Flooring also plans to place uTokens for CEX trading. Allowing users to trade uAzuki, uPudgy, uBAYC, and some other NFT tokens that will be added to Flooring on CEX. If uTokens can be traded on CEX, it will undoubtedly increase the value of FLC.

At the same time, FLC has no real function but is only used for rewards. If the market still considers the value of NFTs to be a bubble, the price of FLC will also drop accordingly when users redeem NFTs from Flooring. Currently, many NFTs are still purchased by Flooring itself and placed in the treasury.

It is estimated that the NFT market will not heat up until April 2024, so the probability of a short-term price increase of more than 10 times is very low.

Users can refer to the Research: What Tokens Will have Prices Increasing 10 times in Q4 2023? for more information about tokens that may increase by more than 10 times in Q4 2024.