NCLive #5 Recap: How to balance between artistic value and the market performance?

TL;NR

• An NFT market that cannot attract traders is not sustainable. It is necessary for Genify to establish economic balance to achieve long-term and healthy development.
• Genify will introduce flexible royalty settings and the role of curators, and raise transaction fees to compensate the traders and curators.
• Lambda Name Service and 1/1 art platform will soon be launched.
• Genify aspires to establish itself as one of the world’s leading art platforms.

Shaun He: An NFT market that cannot attract traders is not sustainable.

Last week, I was interviewed by DiCo+ and discussed my understanding of the current development of the NFT market. Although the NFT market experienced a wave of hype at the end of the last cycle, the overall trading volume has recently declined, including art NFTs such as fxhash, which was once the largest community of artists in the generative art platform, and even the floor price of works by Zancan has continued to fall.

The manifestation of these market conditions has deepened my emphasis on the importance of introducing an economic model. We have mentioned that platforms such as Artblocks and fxhash have neglected rigorous polishing of the economic model due to their pure art team background, resulting in the majority of benefits going to the artists, and continuous outflow of funds from the platform, leading to depletion of liquidity.

For Genify, establishing economic balance is necessary for the platform market to achieve a more healthy, transparent, and sustainable development.

Four key points of Genify’s economic models

1. Flexible royalty

A healthy NFT ecosystem involves the participation of various roles, not only artists but also collectors and flippers. While ensuring the interests of artists, it is also important to allow flippers and collectors to earn money from transactions. This may be the secret to making the platform successful.

In the next phase, we will encourage artists to set appropriate royalties, and the platform will also restrict royalties during times conducive to trading, so that royalties do not become a hindrance to platform development. Through such regulatory measures, money will stay healthier within the economic platform, resulting in continuous increases in the prices and trading volumes of artists’ works, and collectors and flippers being able to earn money.

2. Curators

In addition to artists, collectors, and flippers, Genify will also introduce the role of curator, curating new artists and promoting better market performance for platform works.

There are two main sources of new artists: first, discovering existing well-known artists and supporting them to enter the NFT market and Genify platform; second, establishing a foundation centered around Genify, continually incubating more young artists.

The role of curator can be granted in two ways.

The first is through targeted invitations by the platform. We will continue to introduce more professional curators, joining me and Jimi Wen in discovering and incubating more outstanding artists.

The second is through token staking. In the future, more platform users can obtain the role of curator by staking LAMB tokens, and further gain platform profits.

3. Increase transaction fees

Genify also plans to increase transaction fees, and more importantly, create a transaction incentive pool for the platform, allowing more users participating in transactions to gain more profits. The preliminary economic model we have envisioned is that users participating in transactions can receive transaction fee rewards for subsequent transactions, with users who participate earlier receiving more rewards.

In this model, the active trading of NFTs should help the price of native tokens rise, and curators and active traders can also gain profits from their contributions to the ecosystem.

4. Periodic price regulation

In order to allow prices to rise more healthily and orderly, it is necessary to balance prices and liquidity. During necessary periods, we may even implement a “price ceiling” punishment mechanism. These are all preparations we are making for the upcoming increase in traffic.

Lambda Name Service and the 1/1 Art Platform Affine to be Launched

While designing the economic model and upgrading the trading contracts, we are also making progress on the development of the LNS domain system and the 1/1 art platform.

As previously mentioned, Lambda will creatively provide a visual representation in the form of art for each LNS domain, and the visual effects will be associated with the rarity of the LNS. It is certain that Lambda’s LNS will be traded on the Genify platform and may also serve as identification for future airdrops.

The 1/1 art platform has been named Affine, and we are currently optimizing the auction contract. The secondary markets of Genify and Affine will also be interconnected, allowing users to view the assets and transaction histories held by other users through their LNS domains.

Art is the product of its time. In this era, computers and code are the core production tools of humanity, therefore generative art has the potential to become a representative art form of this era.

Genify hopes to work with the seed users to explore more commercial possibilities. In addition to Artblocks in California and fxhash in France, Genify will become an important art force born in the East and one of the world’s major art platforms.