What Are Liquid NFTs and How Are They Different From Other NFTs and NFT Marketplaces?
6Who Are We?
The Liquid NFT platform has been put together and developed by some of the leading names in the web3 space, to create a safer place to buy and sell NFTs around the world. Our development and management team have been working for years to not only limit losses for investors of all sizes, but to give everyone an equal chance of increasing their portfolio value sustainably.
Liquid is part of the CMC Group of Companies Ltd, which is a UK based marketing and media company that focuses solely on blockchain based business concepts. We are the owners and publishers of The Crypto Magazine (the world's largest distributed print based crypto publication), Crypto Weekly Magazine (a digital weekly subscription-based magazine with over 230,000 weekly subscribers globally) and The Crypto Marketing Company (a leading crypto & NFT marketing agency).
We have put together a team of some of the greatest minds in the industry to create a jointly owned NFT platform that is set to revolutionise the way in which people trade NFT products globally. With our expertise, we believe that it will change the way people see web3 based assets including cryptocurrency around the world.
Why are Liquid NFTs Needed?
For many years, NFTs have been a way for content creators to earn vast amounts of money by releasing a collection of NFTs to the public. This is usually done by creating hype and the promise of the collection increasing in price over a course of time.
This system is flawed for several reasons:
Once a content creator has received their money, there is very little incentive for them to use that money to continue marketing the project. Other than secondary sales fees, which is often a reduced amount, due to the fact that over time people rush to sell them thereby crashing the floor price of the collection, meaning the content creator is receiving less and less on every sale. This is something that has been proven with thousands of NFT collections with very few exceptions.
Anyone can create an NFT collection and after receiving their initial mint fees, can simply walk away leaving everyone's NFTs crashing with little chance of revival (after all they have been paid so what do they care!).
The current NFT System is unintentionally designed to force prices down by the very nature of how the selling process operates on 99% of trading platforms. Let us explain this a bit more.
Currently an NFT is minted at a supposed low price (let’s say $100 for example), and owners of those NFTs can now sell them on a marketplace. In the vast majority of cases these NFTs are only worth what someone else is willing to pay for them, so a seller needs to list their NFTs at a lower price than the cheapest one available in order to have the absolute best chances of achieving a sale. This happens consistently until investors want to salvage what they can and start to sell for less and less, month on month. All the time this is happening, the content creator is earning their share on the sales fees/taxes, while everyone else is out of pocket.
Not only is this not fair or ideal but it actually makes the long-term viability of NFTs unsustainable with the current system. Would you buy a cryptocurrency that has zero liquidity? We’d guess not, because that would be completely stupid, right?! But this happens every day with NFTs, people buy them with absolutely zero liquidity attached to them.
How Do Liquid NFTs Work and Why Are They Better?
In the simplest of terms, liquidity is added to all NFT assets on the Liquid platform, giving the holder both an exit strategy and an asset that will increase in value over time. Other platforms work on a peer to peer basis which means that the only value that an NFT has is based on what others are willing to pay for it. Due to the fact that every Liquid NFT has an intrinsic value locked into it, and with it continuously growing in liquidity, it means that a seller can always ask a higher price based on the liquidity growth potential.
How Does the Liquidity Grow?
Every time an NFT is traded on our platform, a percentage of the price will be added to liquidity across all existing assets on the platform. Below is a breakdown of how this is done:
NEWLY MINTED PROJECTS
50% of mint price - Added to Liquidity
40% of mint price - Developer/Project owner
5% of mint price - Liquid Platform Fees
5% of mint price - Added to existing NFT liquidity
SECONDARY SALES AND NFT REDEMPTIONS
10% of sale/redeem price - Developer/Project owner
5% of sale/redeem price - Added to Liquidity
5% of sale/redeem price - Liquid Platform Fees
How Do I Release My Liquidity?
If you decide not to sell your NFT but you want to pull the liquidity back into your wallet, you can simply use our REDEEM function. What this will do is burn the NFT completely, removing it from the collection forever and increasing the floor price of the remaining assets. Redeeming your NFT will automatically drop the liquidity value into your wallet.
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