INO (To help investors unlock liquidity)
- The concept of INO is derived from the “share transfer” before IPO which has been verified over decades.
- Most blockchain projects employ a lock-up mechanism as the lock-up period can keep the token price stable, providing a longer development timeframe for projects and creating a win-win situation for both investors and project owners. However, there are also risks in the mechanism. The INO initiated by Chair is the first of its kind in the NFT industry. The INO can perfectly solve issues related to locked position and monetization, hence optimizing the circulation of locked assets.
- INO, short for Initial NFT Offering, tokenizes locked tokens into NFTs. The token quota held by an early investor will be locked for 15 months on Chair where it can only be sold each quarter for 5 quarters, including day 1 for a total of 6 rounds. 5% of the locked portion will be released at the beginning of the first quarter. If the token price soars by 20 times, and an investor sells that 5%, he or she recoups the cost. The rest of the locked tokens can be tokenized into an NFT. The investor can trade the BNCH represented by this NFT at a price perhaps three to five times higher on Chair platform. In this way, the locked tokens can be monetized in advance. The INO allows locked assets to be freely traded and circulated, which perfectly reflects the core value of the digital economy.
How is it possible that the token price could soar by 20 times?
- Platform tokens will be locked for a long term, decreasing the amount of circulated tokens (BNCH is the platform token of Chair)
- The core function of platform v1.0:
- Deposit tokens while participating in auctions: BNCH can be locked during auctions so as to decrease the amount of circulated BNCH.
- Auction dividends: Gain new users by enabling them to earn BNCH through auctions.
- Mining while participating in auctions: The behavior of participating in auctions is PoW mining in essence and users can earn BNCH through auctions.
An example of auction on Chair
- Imagine User A starts an NFT auction (The auction dividend ratio must be set, which determines the percentage of the hammer price to be rewarded to auction participants).
- User B, C, and D participate in the auction. The user who offers the highest bid wins the NFT and the other participants get their bid amount refunded and win auction dividends ( no losses in an auction).
- Imagine User A initiates an auction of an NFT which represents the right to redeem BTC with a 90% discount. The auction dividend ratio is set at 50%. The payment currency is BNCH.
- The start date of the auction is June 1st and the end date is June 30th. The starting price is 1000 BNCH, then the winner of the auction will be rewarded the amount of BTC which is worth 10,000 BNCH (1000*10). The value accrued to the winner of the auction is in this example 10 times as much as the starting price.
- Assuming a total of 100 users participate in this auction, User D bids 5000 BNCH and wins the NFT. The other 99 participants split the auction dividend reward of 2500 BNCH and will be refunded their deposited BNCH. If Chair operates on Polygon, the transaction fee is very low and user experience will be enhanced significantly. If every participant deposits 2000 BNCH on average during the auction, then 200,000 BNCH is deposited for more than 10 days on average. Some measures will be taken appropriately to encourage users to participate in the auction as soon as possible. For example, the earlier a user offers a bid and deposits BNCH in the auction, the higher the proportion of auction dividends the user can receive.
- Why are there 200,000 BNCH locked for at least 10 days? There are two types of auction participants: one seeks to obtain the rights represented by the NFT, and the other is aiming for the auction dividends. If you want a higher probability of winning auction dividends, you have to participate in the auction as early as possible when any auction is initiated. The earlier you participate, the easier it is to get auction dividends. This encourages a large amount of BNCH to be locked instantly.
- As long as the rights and benefits tokenized into NFTs are attractive enough, many users will be attracted to participate in NFT auctions, which means a huge amount of BNCH will be locked up. If a large amount of BNCH can be locked, the price of BNCH can go up. As a result, the early investors who take part in Chair INO and purchase the NFTs representing BNCH quota can gain returns as soon as they sell these NFTs on Chair with some discounts.
- The NFT trading system on Chair is decentralized, and its smart contracts have been audited by Certik. The system has been live on the Polygon mainnet https://trade.chair.finance/
This document is only to explain the products, and it does not mean to make any promises.