Fungify Pools is launching on Berachain tomorrow! Pools is a powerful cross-margin lending and borrowing platform that enables you to utilize multiple assets as collateral. With Fungify Pools, you can:

• Borrow against your Berachain NFTs

• Access your vested BERA tokens immediately

• Combine various tokens and NFTs into a unified collateral pool

Fungify Pools is the first platform on Berachain designed specifically to unlock the value of your vesting BERA tokens.

Berachain NFT Details

The core utility of accessing vesting BERA capital from your Berachain NFT requires precise asset valuation. To ensure transparency and fairness, our lending protocol follows a structured and consistent approach to NFT pricing.

NFT Token Allocation (From Berachain)

A total of 34,500,000 BERA tokens were distributed equally across six NFT collections, each managed by a dedicated vesting contract:

• BongStream: 0x1E54B85B3632F75E96Cc8d4FcB11BA7f0Ca69213

• BondStream: 0xa63b5bc4Bab6593ACc78ef103fcb44A191BAe836

• BooStream: 0x1229414CFEE4dEC0B488377B62e96B4094B6258C

• BitStream: 0x979EFC29797884c3342143eA7b91E55342F2f408

• BandStream: 0xaf30baa667Ce52c1fE5702A0F8CE9A31f0d751B6

• BabyStream: 0x14E5930aD47Bfc9E7977547e263D5C3A090b777f

Of these tokens:

• 25,000,000 BERA tokens (72.5%) were available immediately at launch.

• 9,500,000 BERA tokens (27.5%) are subject to a three-year linear vesting schedule.

Each NFT's total allocation of BERA tokens can be accessed through the parameter allocationPerNFT, available here.

Vesting Allocation Calculation

The VestingAllocation for each NFT is determined by the following formula:

This calculation reflects the proportion of each NFT's BERA allocation subject to linear vesting over the three-year schedule.

NFT Valuation Methodology

Our valuation model employs a piecewise function that separates the cliff and ongoing vesting:

1. Cliff Vesting (First 1/6th of tokens):

• Starts at 50% of the full value at the Berachain launch.

• Value linearly increases to full value at the cliff event.

2. Linear Vesting (Remaining tokens over 3 years):

• Valued initially at a discount that gradually diminishes from 100% at launch to 0% at the end of the vesting period.

• Simultaneously, the total locked token count decreases linearly, further impacting valuation.

Here is the formula in mathematical terms:

Visualizing NFT Valuation Dynamics

• Blue Line: Indicates the total locked tokens throughout the three-year vesting.

• Red Line: Reflects our proportional valuation of these tokens over time.

Additionally, the NFT's valuation remains sensitive to changes in the $BERA token price, as each NFT's intrinsic value is tied directly to the underlying tokens.

By adhering to this clear and consistent valuation approach, we ensure fair, predictable, and transparent asset pricing within our lending protocol.

Getting Started with Fungify Pools

For those unfamiliar with Fungify Pools, the Berachain deployment closely mirrors the Ethereum mainnet experience. Let's quickly recap its core functionalities:

Supplying Assets

• Easily supply ERC-20 tokens to the pools.

• Your supplied tokens become available for borrowing.

• Earn interest when your supplied assets are borrowed.

• Interest accrues automatically and directly to suppliers.

Berachain NFTs

• Supply Berachain NFTs to unlock immediate borrowing power based on their vesting BERA tokens.

• NFTs act strictly as collateral—you retain ownership as long as loans remain healthy.

Borrowing

• After supplying collateral, you can borrow assets up to your calculated Borrow Limit.

• Your Borrow Limit is determined by your total supplied collateral.

• Simply select the desired asset and specify the borrow amount.

• Regularly monitor your borrowing position to stay within your Borrow Limit.

Repaying Loans

• To repay a loan, navigate to your asset position, select the "Repay" option, and enter the desired repayment amount.

Liquidation Mechanics

• Positions exceeding their Borrow Limit risk liquidation.

• Liquidators can seize collateral at a discount to cover unpaid debts.

• The amount of collateral eligible for seizure depends on each asset’s Close Factor.

• Token liquidations feature a 6% liquidation incentive.

• NFT liquidations offer a discount equivalent to the remaining NFT value.

• Multiple assets can be liquidated simultaneously if necessary.

Dynamic Interest Rates

• Interest rates adjust dynamically based on asset supply and demand.

• Check the "Stats" page regularly to monitor current supply and borrow rates.

Supported Assets

• BERA (85% CF)

• HONEY (85% CF)

• USDC (85% CF)

• wBTC (85% CF)

• wETH (85% CF)

• Baby Bears (35% CF)

• Band Bears (35% CF)

• Bit Bears (35% CF)

• Bond Bears (35% CF)

• Bong Bears (35% CF)

• Boo Bears (35% CF)

Rewards

Berachain has allocated 16,419.87 BERA tokens for Fungify Pools. We'll distribute these tokens as rewards during our upcoming reward season. Stay tuned for further updates!

Audits

Security is a top priority. Fungify Pools has undergone extensive audits to ensure the platform's safety and reliability:

Hexens: October 23, 2023, November 23, 2023

Least Authority: January 10, 2024

Zach Obront: December 5, 2023

Gaslite: February 27, 2024

About Berachain

Berachain is a high-performance EVM-identical blockchain built on Proof-of-Liquidity consensus. Learn more:

Website | Twitter

About Fungify

Fungify is a non-custodial NFT peer-to-contract marketplace and algorithmic lending protocol, allowing for instant NFT sales, immediate NFT-backed loans, and a yield-bearing NFT index token. With a small set of elegant primitives, Fungify solves the most challenging problems at the intersection of NFTs and DeFi.

Dive Deeper

Website | Docs | Twitter

Join us on Discord

For the first time ever, Fungify Pools lets you unlock the vesting BERA tokens in your Berachain NFTs—no waiting, no selling, just instant liquidity.

We’re launching on Berachain Mainnet and will support all six official Berachain NFT collections:

🐻 Bong Bears
🐻 Bond Bears
🐻 Boo Bears
🐻 Baby Bears
🐻 Band Bears
🐻 Bit Bears

These NFTs hold vested BERA, but until now, that value was locked. Fungify Pools changes that—letting you use your NFTs as collateral and borrow against their vesting value instantly.

How It Works

1. Supply your Berachain NFT into Fungify Pools as collateral.

2. Borrow against its vesting value—immediately.

That’s it. No need to sell. No need to wait. Just instant liquidity.

How We Price Your NFT

We use a discounted cash flow (DCF) model to assess the value of vesting BERA in your NFT:

Where:

• Cᵢ = Expected BERA token unlock at time i

• r = Discount rate

• n = Time to full vesting

This ensures accurate pricing and fair borrowing power.

What’s Next?

We’ll announce the official launch soon, followed by a rewards program—stay tuned.

Vesting BERA, finally unlocked. Only on Fungify.

The Fungify x Berachain trading competition is a simulated trading arena where participants are given a mock balance of $500,000 to trade and invest using the Fungify protocol. This isn’t just about making trades—it’s about mastering innovative tools, understanding NFT markets, and deploying strategies to maximize your profits by the competition's end. This guide aims to familiarize you with the intricacies of our protocol and the array of strategies at your disposal. Let’s dive in.

Getting Started

Head over to https://bartio.fungify.it/. You'll begin the competition with mock $500k. Here's how to load it into your wallet.

Additional Gas

You can find the official Berachain faucet below. We recommend topping up daily.

• https://bartio.faucet.berachain.com/

Taking positions

At the heart of this competition are key strategies: longing, shorting NFTs, and utilizing leverage. Let's delve into how you can effectively employ these tactics.

Long Positions:

Bullish on an asset? Purchase using OTC. Serving as a dedicated marketplace for this competition, OTC fills the role of platforms like Blur and OpenSea. The prices are anchored to the on-chain floor price of the collections. Trading on the OTC market is possible as long as there's sufficient liquidity. It's important to note that this OTC feature has been crafted specifically for the Fungify competition and is not a standard component of the protocol.

You can supply purchased assets to earn even more income through lending fees.

Leverage for Longs:

Really bullish? Double down and create a leveraged position using Pools.

Take this scenario as an example: You're highly optimistic about the NFT Index. What's next? Leverage those NFT Index Tokens by using them as collateral to borrow USDC, allowing you to buy even more NFT Index Tokens.

You can loop through like this as many times as you want to leverage even further up.

Short Positions:

Fungify introduces the unique capability to short NFTs, allowing you to capitalize when NFT prices drop. Here's the shorting blueprint:

1. Deposit collateral into Fungify Pools.

2. Acquire your preferred NFT.

3. Sell at the OTC desk.

4. Buy back during price drops.

5. Conclude by returning the borrowed NFT and covering any interest.

When you’re satisfied with your short position, make sure you remember to close out your position by buying back the asset and repaying your loan.

Leverage for Shorts:

Just like a long position, you can also leverage your short position. Here's how:

1. Initiate with a collateral deposit in Fungify Pools.

2. Borrow your NFT.

3. Head to the OTC desk for a sale.

4. Use the derived capital as collateral.

5. Return to step 1 and cycle through.

You can loop through like this as many times as you want to leverage even further up.

When you’re satisfied with your short position, make sure you remember to close out your position by buying back the asset and repaying your loan.

In Closing:

The strategies outlined herein represent but a fraction of the potential maneuvers available within the Fungify platform. For a comprehensive understanding, we direct you to the additional resources linked below. As you embark upon this competition, we encourage a collaborative approach; engage the community, share insights, and refine strategies collectively.

Oh and don’t forget about the rules:

Good luck

About Berachain

Berachain is a high-performance EVM-identical blockchain built on Proof-of-Liquidity consensus. Learn more:

Website | Twitter

About Fungify

Fungify is a non-custodial NFT peer-to-contract marketplace and algorithmic lending protocol, allowing for instant NFT sales, immediate NFT-backed loans, and a yield-bearing NFT index token. With a small set of elegant primitives, Fungify solves the most challenging problems at the intersection of NFTs and DeFi.

Dive Deeper

Website | Docs | Twitter

Join us on Discord

As Berachain’s highly anticipated launch draws near, we’re thrilled to unveil the Fungify x Berachain Trading Competition! This event offers participants the excitement of real trading strategies using paper assets in a competitive, risk-free environment. The competition starts on December 27th.

If you’re a Fungify NFT holder or Honey Comb NFT holder, you’re already ahead of the game! You’ll have a guaranteed spot and start with a bonus to give you an edge.

The Challenge

The objective is simple: Use the Fungify App to maximize your profits by leveraging, longing, and shorting NFTs and other assets. Sharpen your trading skills and claim your spot on the leaderboard!

Competition Rules

1. Registration:
   All participants must register before the competition begins. Sign up on our Discord starting December 18th.

2. Starting Balance:
   Each participant will begin with $500k mock USDC loaded into their wallet.

3. Integrity:

   • Transferring mock USDC to or from your address is strictly prohibited and will lead to disqualification.

   • Using multiple wallets or any form of manipulation will result in disqualification.

4. Active Participation:
   Engage with the Fungify protocol at least once during the competition to qualify as an active participant.

Fungify reserves the right to enforce these rules to ensure a fair and enjoyable experience for everyone.

🏆 Prize Chest:

🥇 1st Place*: Honey Comb NFT + $NFT Index

🥈 2nd Place*: $NFT Index

🥉 3rd Place*: $NFT Index

Additional prizes for participants beyond the top three will be announced soon.

How to Register

1. Join our Discord.

2. Create a ticket in the #competition-entrance channel.

3. Registration opens December 18th.

Track your performance and rankings on the official leaderboard once the competition begins.

TL;DR:

• Registration Opens: December 18th

• Competition Starts: December 27th

• Sign Up: Discord

• Starting Balance: $500k mock USDC

• Objective: Maximize profits by trading NFTs and other assets.

About Berachain bArtio

Berachain is a high-performance EVM-identical blockchain built on Proof-of-Liquidity consensus. Learn more:

https://www.berachain.com/

About Fungify

Fungify is a non-custodial NFT peer-to-contract marketplace and algorithmic lending protocol, allowing for instant NFT sales, immediate NFT-backed loans, and a yield-bearing NFT index token. With a small set of elegant primitives, Fungify solves the most challenging problems at the intersection of NFTs and DeFi.

Dive Deeper

Website | Docs | Twitter

Join us on Discord

Fungify is excited to announce the launch of its Pools and Index protocols on Berachain.  Until now, Fungify has only been available on the Ethereum mainnet, as the NFT ecosystem on other EVM-compatible chains was not mature enough to justify a deployment. Berachain, however, started with Bong Bears—the first rebasing NFT—and has since grown via rebasing to add collections like Bond Bears, Boo Bears, Baby Bears, and Band Bears. Independent projects like The Honey Jar have further fueled this growth, creating a vibrant, creative community that is ready for financialization. With this strong foundation, Berachain is set to become a leading L1 solution— making it the perfect home for Fungify.

Pools has been active on the Ethereum mainnet for the past eight months, achieving a cumulative loan volume of over $25 million. Recently, Pools has also been deployed on the Berto testnet and will soon be accessible to the public. On ETH mainnet, It has already facilitated over $4 million in loan volume specific to the Berachain NFT ecosystem, supporting notable projects like THJ and Bit Bears.

The Index, which has been live for just two weeks, has already reached a liquidity pool of $600k. Pools will be deployed first on Berachain, followed by the Index. While the Pools deployment will largely mirror the Ethereum deployment, it is important to discuss the implications for the Index as part of our cross-chain strategy.

The Cross-Chain Strategy

The Index token, $NFT, can be wrapped and bridged to other chains. There, it can provide exposure to NFTs for communities that cannot afford either the transaction fees or the cost of Ethereum NFTs. When a chain develops its own NFT ecosystem, an index for that chain can be created, using the Ethereum NFT index as a base. This allows activity on the other chains to feed back liquidity to the Index on Ethereum. Even more than this, the Index from the other chain can be bridged back to Ethereum to allow users on the Ethereum mainnet to get exposure to that ecosystem’s NFTs. In the process, because the $NFT token is the base of every index, it still drives demand to the underlying Ethereum Index, allowing it to grow further in size.

This strategy can be replicated across every chain, funneling demand from across the entire blockchain space to the Ethereum index, and providing a base from which the index of other chains can grow. Berachain will be the first chain where we deploy this strategy.

About Fungify

Fungify is composed of two NFTFi applications: Pools and Index. Pools is a cross-chain lending protocol for NFT yields and loans. It allows you to earn interest while borrowing against your NFTs, stablecoins, or any other digital asset. The Index is an NFT ETF allows fractional exposure to a market-capitalization weighted basket of blue-chip NFTs. The two applications come together by allowing you to use the $NFT token as collateral on Pools to borrow, providing integrated utility across both protocols.

About Berachain

Berachain is a high-performance EVM-identical blockchain built on Proof-of-Liquidity consensus. Learn more:

https://www.berachain.com/

Dive Deeper

Website | Docs | Twitter | App

Join us on Discord

Fungify has entered into a partnership with NFT Price Floor to raise awareness of its recently launched NFT Index product. 

The NFT Index offers unique benefits, including a single pool of consolidated liquidity from top blue-chip NFT collections, making it an accessible way for traders to gain exposure to high-value NFTs. As the Index is ERC-20-based, it allows traders to enter at any size, providing fractional ownership that is both scalable and flexible. Through this collaboration, Fungify and NFT Price Floor will work together to communicate these advantages through educational content and campaigns, helping the community navigate and understand the evolving NFT market.

About Fungify

Fungify offers two NFTFi applications: Pools and Index. Pools is a cross-chain lending protocol for NFT yields and loans. The Index is an NFT ETF that pools liquidity from top-tier NFTs, offering fractional exposure and yield opportunities on blue-chip collections.

About NFT Price Floor

NFT Price Floor was founded in 2021 as a user-friendly gateway and NFT data hub. We display up-to-date NFT stats, using a comprehensive NFT ranking model based on current floor price data and other key metrics.

*This partnership between Fungify and NFT Price Floor is focused on awareness and education. It is not an endorsement, guarantee, or financial recommendation of the NFT Index product.

NFT Price Floor Links: Website  | Twitter

Dive Deeper

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Join us on Discord

We’ve just launched the Fungify NFT Index, and it’s unlike anything that’s been done before. This is the S&P 500 for NFTs, consolidating the six biggest collections into one simple token. With over $300,000 in concentrated liquidity, you can now get exposure to the top NFT collections without the hassle of managing individual assets.

Our approach is simple but powerful: liquidity is pooled into a single vault, maximizing capital efficiency and avoiding the fragmentation of multi-vault systems. By restricting deposits and redemptions to a whitelist of designated market makers, we ensure the index remains balanced and steers clear of accumulating any blacklisted NFTs.

Here’s how it works:

1. Buying Fungify NFT Index Tokens

Getting your hands on Fungify NFT Index Tokens is fast and simple:

• Head to the Buy & Sell page and use the CowSwap widget to swap ETH for Fungify NFT Index Tokens.

  

  That’s it—you’re instantly invested in the top NFT collections.

2. Trade NFTs for Fungify Tokens (Creation Mechanism)

Just like ETFs allow for the creation of new shares, whitelisted users can “create” new Fungify NFT Index Tokens by depositing NFTs. This creation process, analogous to traditional ETFs, enables the exchange of individual NFTs for index tokens, allowing for immediate portfolio diversification.

• Go to the Deposit page and enter the amount of NFTs you want to deposit. You can also manually select which NFTs you want or let the protocol randomly choose for you.

If you’re balancing the index, you might even earn a bonus, similar to how ETF creators can benefit from maintaining liquidity and balance.

3. Redeem NFTs from the Index (Redemption Mechanism)

Whitelisted users who need to redeem NFTs from the index can exchange Fungify NFT Index Tokens for NFTs held within the index. This process mirrors ETF redemptions, where shares are exchanged for underlying assets.

• Go to the Redeem page, enter the number of NFTs you want, and the protocol will return random NFTs and any change due.

You’ll see which NFT you received once the transaction is complete.

4. Earn by Staking Your Tokens

For those seeking passive income, staking Fungify NFT Index Tokens provides a share of protocol fees from deposits and redemptions.

• Head to the Earn page, enter how many tokens you want to stake, and you’ll start earning a share of fees from deposits and redemptions in the protocol.

You can unstake at any point as needed.

Looking Forward

The Index is live! You can access it now: https://app.fungify.it/

The next step for the index is to bring this capability to users beyond the Ethereum ecosystem, by bridging over to other chains and establishing liquidity pools to facilitate the long tail of NFT buyers.

Dive Deeper

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Join us on Discord

Fungify has announced a collaboration with Ethena, making it the first cross-margin lending protocol on the Ethereum mainnet to support sUSDe and USDe in its liquidity pools. This initiative allows Ethena users to utilize their sUSDe and USDe holdings as collateral for borrowing, enabling greater liquidity and leverage opportunities.

Following this integration, sUSDe assets will qualify for CAPS points within Fungify's rewards program, with an introductory offer of a 2x multiplier for Ethena assets. This strategic partnership is set to unlock novel yield arbitrage opportunities, driving greater market efficiency. When you deposit your Ethena assets, any shards earned will be distributed back to users.

About Fungify

Fungify is composed of two NFTFi applications: Pools and Index. Pools is a cross-chain lending protocol for NFT yields and loans. It allows you to earn interest while borrowing against your NFTs, Stablecoins, or any other digital asset. The Index is an NFT ETF that lends itself out to earn yield, allowing fractional exposure to a market-capitalization weighted basket of blue-chip NFTs. 

About Ethena

Ethena is a synthetic dollar protocol built on Ethereum that provides a crypto-native solution for money not reliant on traditional banking system infrastructure, alongside a globally accessible dollar denominated savings instrument - the 'Internet Bond'. Ethena's synthetic dollar, USDe, is the first censorship resistant, scalable and stable crypto-native solution for money, achieved by delta-hedging staked Ethereum collateral. 

Ethena Links: Website  | Twitter

Dive Deeper

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Join us on Discord

Fungify has a vision of fusing the DeFi and NFT communities. Up until now, both communities have operated in their own separate silos. While there has been overlap at the protocol level in terms of financializing NFTs, there has not been a deep integration of NFTs into the communities of protocols. It is very difficult to manufacture art and culture that endures, and protocols would be well served by melding with existing NFT communities rather than attempting to create their own. Fungify has a vision of fusing not just with one successful NFT community, but all of them, in our journey to mint all 3500 of the Fungi collection.

A Major Acquisition

The Anatas community, led by DCF God, Herro, and Grug, have deep connections with both founders and users in the DeFi space. This is an unusual positioning for an NFT project, but one which makes it particularly suited for collaboration with a project in NFTFi. It was this positioning and reach that guided our decision to have Anatas be the first collection with which we collaborated.

In the first step towards this, for the Season 1 release of the Fungi collection, the Fungify DAO is acquiring 75 Anatas. These Anatas will be locked away permanently within the vault of the DAO, and migrated to the Fungi collection. By accumulating NFTs in the treasury, FUNG holders gain exposure to any potential airdrops or benefits this collection might accrue, serving as a diversified source of revenue. 

This acquisition makes Fungify DAO the largest holder of Anatas, and the most powerful entity in dictating the use of the 5mm Anatas treasury. To create harmony and deep, reciprocal alignment, the Anata community needs skin-in-the-game when it comes to Fungify DAO. Prior attempts at creating alignment with NFT communities have focused on airdrops, but airdrops are a temporary alignment at best. 

The Soulbound Airdrop

A soulbound airdrop imbues an NFT with the power and rights of a token without allowing that token to be sold. This will grant each Anata with the power of 10,000 FUNG in perpetuity, giving them an ability to participate in governance and share in revenue. Technically, the implementation will be done through the Fungify governance and staking contracts without ever involving the token itself. This creates an enduring alignment between the two communities that does not fade as the airdrop is sold back into the market.

The Art

The art of the Fungi Anatas is being led by the Anatas art team in collaboration with Froggycyborg, who is known for his work on collections such as Pudgy Penguins, Chubbiverse & Kanpai Pandas. The art has elements of both Anatas and the Fungify branding, allowing both to be recognizable simultaneously. This is the general direction in which each Season will proceed. 

The Future

This is just the first Season. In each subsequent Season we intend to meld with other NFT collections in order to reach the 3500 NFT mint cap. This is a long term project intended to extend throughout the entire life of Fungify. In the process, we hope to become both the strongest and most aligned collection in the ecosystem, drawing power from every community, and in turn providing real utility.

Participate

All the details of the mint itself can be found in our previous article: 

Here

About Anata

Anata comprises a set of 2,000 unique hand-drawn VTUBE-rigged avatars with an Anime theme, each existing as a one-of-a-kind NFT. Anata NFTs serve as the governing mechanism for the Anata DAO, where 1 Anata NFT equates to 1 voting right. Since its establishment in April 2022, the Anata DAO has successfully approved numerous proposals, unlocking additional features for every individual Anata NFT. These enhancements include live 2D VTUBE Avatars interactive pets, 3D VRM files, one-of-a-kind profile pictures, Holder Appreciate Loot Crates, VR Worlds & Experiences, and various other integrations.

Anatas Links: Marketplace  | Twitter | Discord | Treasury 

Dive Deeper

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Join us on Discord

At the conclusion of The Great Fill (TGF), the first ve404 NFTs will be made available for minting. These NFTs will have the ability to receive staking revenue from the protocol, multiply point mining rewards, and participate in governance, giving it protocol-backed utility. The earlier an NFT is minted, the more revenue share and the larger the points multiplier it will have. And, unlike traditional NFT mints, the process is reversible, allowing you to recover your currency at any time. However, the NFT is permanently burned, reducing the supply.

This article covers how to participate in the mint, the details of the mint, and the thinking behind the design.

How to Participate

Purchase FUNG tokens. Deposit 210,000 FUNG into the Fungify NFT Minter contract.  Upon doing so, you will have minted an NFT from the ██████████ collection. At any time after the mint, burn the NFT to receive back 210,000 FUNG.

The contract address and mint interface will be announced on Feb 28th.

Mint Details

There will be a total of 75 NFTs available for the initial mint. Once these have been minted, Season 1 of the mint will have concluded. No additional minting will be possible until Season 2 is announced. Each Season will feature collaboration with a different existing NFT collection, executing on our vision of combining the best protocols with the best culture and communities. 

There is a hard cap of 3500 NFTs, beyond which none will ever be minted. Each Season will coincide with the natural rise in the circulating token supply, with a target of ~50% of the FUNG circulating supply locked up within the NFT collection. 

During the initial minting process, which is expected to last only a brief period of time, there will be a 20% fee on any burns. Once the mint has concluded, the fee will be removed completely. This is a temporary measure to discourage individuals from looping through to destroy the NFT supply at minimal cost. Once the collection has achieved a distribution and reached the cap of 75, there is no longer any necessity for a fee, and retrieving the underlying becomes completely reversible at no cost.

The Utility

When converted into an NFT, the underlying FUNG gains a multiplier on liquidity mining, revenue share, and governance. The earliest 25 NFTs minted start with a multiplier of 3.5x. Each subsequent 25 will have the multiplier reduced by 0.1x. The following table shows the correspondence between how early an NFT is minted and the FUNG power it acquires.

Liquidity mining multipliers remain active for up to 10mm of capital deployed. 

We intend to make the NFTs available as asset markets on Pools.

Rarity

Rare traits are purely aesthetic, but will be concentrated near the earlier token IDs, with some still appearing further into the collection.

Motivation

We have been observers of the Curve Wars and the powerful incentives to accumulate protocol tokens that have been downstream of demand to access enhanced liquidity mining rewards, revenue share, and governance, respectively, in terms of importance. Moreover, having incentives for tokens to be taken out of circulating supply enhances the ability for that token to drive usage through liquidity mining rewards. 

There are some limitations to the model of removing tokens from supply by having them locked in NFTs, since the NFTs themselves can be sold. However, there is a significant gap in liquidity between ERC-20s and NFTs because of the capital commitments required to purchase an NFT. This gap in liquidity represents the true extent to which the locked tokens are taken off the market. As the NFTs appreciate in price, the liquidity gap between the underlying ERC-20s and the NFT further widens, entrenching the extent to which the tokens have effectively been removed from circulation. 

On the other hand, a major limitation of the veCRV system is the irreversible lockup. Imposing such conditions acts as a barrier to widespread participation. Instead of individuals widely aligning themselves with the protocol, protocols like Convex, acting similarly to a liquid wrapper around the locked tokens, captured the value of the liquidity for its own token.

We wanted to improve on the incentives of Curve, while also fostering the sense of community and value that comes with being instantly recognizable as tribally aligned. By merging the Curve token model with the general concept behind ERC-404s, we are able to not only create similar or even better incentives as veCRV, but also create an NFT collection that has some of the key qualities widely demanded by the community: utility, reversibility, and progressive scarcity.

ERC-404: The Concept and the Standard

At the heart of ERC-404 is a powerful idea: that ERC-721s should have ERC-20 counterparts. This idea, pioneered by Pandora, has allowed NFT collections to break through capital barriers in unprecedented ways, with collections seeing the majority of their volume start to take place on the ERC-20 side. 

Our idea, inspired by ERC-404, but coming from the opposite direction, is the inverse: that ERC-20s should have ERC-721 counterparts. Ultimately it is about joining the fungible and non-fungible worlds together to derive the benefits of both. We view this as the inevitable path for the ecosystem, as the best protocols join with the best NFT projects, fusing these parallel bubbles of technology and culture together. 

For simplicity from a development perspective, our implementation will use a standard ERC-721 contract that accepts deposits and withdrawals of our ERC-20. As the standard matures, we foresee the benefits of making this transition seamless and employing the actual ERC-404 standard itself. We intend to participate in and promote the ERC-404 ecosystem to build mindshare around this vision of the path forward for protocols and NFT projects alike.  

Dive Deeper

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Join us on Discord

The Great Fill (TGF) Phase 1 was a resounding success, with the 1MM USD allocation selling out within seconds at a valuation of 45MM FDV, making the total raised by the protocol 7MM. A portion of these funds were used to create Protocol Owned Liquidity (POL) for Fungify Pools, while a portion was earmarked to support the coming FUNG/ETH liquidity pool. 

TGF Phase 2 follows the same blueprint. A portion of the funds will serve as POL for the Index, while the rest will be earmarked to support the FUNG/ETH liquidity pool. This article details everything you need to know to participate. 

The amount raised during TGF Phase 2, starting on Feb 28th @ 5PM UTC, will be equal to 2.76MM USD. This represents 4% of the token supply (40,000,000 FUNG) at a valuation of 69mm FDV. This valuation was voted on by existing token holders. At the conclusion of the event, 1.3% of the token supply will be paired with a portion of the proceeds of the sale to provide liquidity for the FUNG/ETH Uniswap v3 pool.  

All contributions will be made in ETH and result in the purchase of FUNG tokens at a price of $.069 per FUNG. These tokens will have no lockup and will be immediately tradable upon the completion of the sale. 

The event is open to the public on a first-come-first-serve basis, with a contribution limit of $50,000 per wallet. Eligibility is restricted to wallets with transaction histories predating this announcement. As with the last TGF event, the team will manually review all transactions to ensure compliance with the rules. Any wallet identified as attempting to bypass the rules will result in the community voting on the course of action necessary to redress the offense.

The sale is not available to users from the United States.

The countdown has begun, the sale will occur here.

NFT Mint

At the conclusion of the sale, the ██████████ collection becomes available for mint. These NFTs are only obtainable using FUNG token and employ our ve404 model. All details of the mint will be published prior to the start of the sale.

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Recent  implementations of points have tended to leverage the opaqueness of the off-chain component, leading to substantial uncertainty around the value of the points themselves. There is widely perceived to be a lack of clarity around how points translate to actual earnings. By having a defined token emission schedule and continuously updating the point to token (P2T) correspondence, we hope to break the trend of nebulousness surrounding point values.

How P2T Farming Operates

P2T Farming is designed to reward users who supply to and borrow from the protocol. Participants earn Cap Points 🍄 which are then converted into FUNG tokens at fixed 7-day intervals, referred to as cultivation periods. The allocation of FUNG is based on a predetermined schedule and corresponds to the points accumulated by users during each cultivation. 

Users engaged in both supplying and borrowing assets within the same market will have their base interest rate adjusted based on the net APR of that market. This aims to discourage unproductive resource consumption, promoting efficient asset utilization. 

Methods to Earn Cap Points 🍄

Users can collect Caps 🍄 in two ways:

1. Supplying Assets: By supplying assets to any of Fungify's markets. Including for the first time, NFT Markets where you can supply NFTs in order to earn yield in USDC.

2. Borrowing Assets: Borrow assets, including NFTs

Earning Rate and Boosts

The base rate for Cap 🍄 accrual is linked to the market's interest APR. The formula is straightforward: the interest rate of a market determines the base rate of caps earned for supplying or borrowing from that market.

Users can increase their points through several boosts:

• Borrowing: Engaging in borrowing activities applies a 3x boost to Caps earned.

• Size: Size matters, the greater the value of assets supplied or borrowed, the larger the boost, up to 3x. Each $50,000 increment adds a 0.1x boost.

• Time: The longer a position is held, the more the points boost, up to 2x. A 0.2x boost is granted for every cultivation period a position is maintained.  

Additionally, the program will include a surprise Weekly Bonus feature. Every week, at the start of each cultivation period, a new method to boost your cap count will be revealed. 

At the end of each quarter, all token balances become claimable and begin vesting. 

Fungify's P2T Farming is will go live on February 15th, 5:00PM UTC , and the Weekly Bonus applies to the latest assets we’ve added to the platform: Sappy Seals and The Honey Jar Honeycombs (Berachain Community Project). Borrowing and lending with Sappy Seals and Honeycombs earns a 2x points bonus. They’ve been given a collateral factor of .3, meaning you can borrow up to 30% against its value and get ETH, USDC, or USDT. We’re excited to be the first pooled lending protocol to support Sappy Seals and Honeycombs.  

One more thing:

A separate PvP leaderboard, which tracks the number of NFTs deposited from each NFT collection as well as individual user deposits, will launch shortly. This will be separate from the rewards program…

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The ERC-404 standard has emerged as a novel token model that blurs the traditional boundaries between fungible and non-fungible tokens. By enabling the creation of NFTs through the aggregation of a specific quantity of fungible tokens, ERC-404 introduces a new way to represent token holdings. Separately, the concept of veTokenomics is built on the premise of locking up liquid tokens in exchange for vote escrowed tokens, with the goal of apportioning reward accrual and governance power with long term alignment. In this article we present an alternative implementation of veTokenomics using ERC-404 mechanics, which creates a system equivalent to veTokenomics but with a time-based race condition that incentivizes the token supply to be locked up as quickly as possible for the purpose of capturing governance power and protocol revenue.

Introducing ve404

This model links governance power—essentially, the entitlement to a more significant share of fees and revenue—to the tokenID of the NFTs minted via ERC-404. ve404 retains the core incentives of veTokenomics for long-term holding while enabling a new dimension of financialization. The system prioritizes holders of lower ID NFTs, rewarding early adopters and those with larger commitments with enhanced governance power, akin to the benefits provided by veTokenomics for extended lock-up periods.

How does it work?

The ERC-404 standard employs a straightforward formula to determine the conversion of fungible tokens into NFTs:

IF Tx is <1, the transaction processes as a standard ERC-20 transfer.

IF Tx is ≥ 1, the recipient receives NFT(s) for whole units and change as fungible tokens (ERC-20) for fractions.

Each time an NFT is minted upon reaching the specified thresholds, the NFT ID increments, but fractionalizing an NFT leads to the burning of the NFT, and its ID is irreversibly lost. This can be leveraged to natively incorporate information regarding seniority into the holdings of each user, which can then be used by governance contracts to apportion voting power and revenue share, with lower NFT IDs corresponding to greater governance power and revenue share. Note that under this framework the fractional tokens can still be staked to acquire governance power and revenue share. 

Imagining The Fungible Counterfactual

If there was a fungible derivative token that was minted in proportion to tokens committed to vote escrow on the basis of seniority, there would be no way to formulate a mapping between the number of tokens and their redemption value. It is actually technically necessary to introduce NFTs to create a time-based race condition for incentivizing the locking up of governance tokens. The heterogeneity of the assets also prevent liquid staking wrappers that function to undermine long term alignment (e.g., Convex) from taking root.

Illiquidity Is a Feature

Liquid derivative tokens undermine lockups. Selling of the locked position impacts the secondary market, and the more liquid the locked position, the more impact there is on the secondary market of the underlying. NFTs are already relatively illiquid by their nature. More valuable NFTs have a higher capital barrier to entry; their appreciation and the attendant worsening of their liquidity profile create a natural stabilizer against the potential to siphon demand from the underlying secondary market. However, NFTs are just liquid enough to financialize, and the next section will make clear why the NFT approach to veTokenomics is superior to making them soulbound. 

Made for NFTFi

NFTFi becomes the perfect setting for ERC-404 NFTs. These NFTs feature a definable floor price derived from intrinsic value, with their governance power and seniority associated with NFT IDs contributing to an "above floor" valuation. This distinct floor price clarity allows platforms like Fungify Pools and other lending protocols to service such NFT as a collateral asset with the same certainty that would come from servicing a liquid ERC20 asset. Additionally, peer-to-peer lending protocols benefit, as they can more accurately account for the "above floor" value in their loan considerations.

Conclusion

At its core ve404 is a simple but powerful idea: adding a time dimension to governance and fees, where being earlier is better. It’s using NFTs to represent an on-chain database entry and allowing it to be financialized. Whereas many other approaches to ERC-404s consume gas liberally to maintain each user’s NFT tokenID, this approach leverages the natural flow of IDs as users mint and destroy them.

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Introduction

The landscape is fragmented into a jumble of specialized protocols, each catering to a slightly different use case. If you want to lend and borrow your ETH and tokens, you go to Compound or AAVE. If you want to do the same with your NFTs, your options are a patchwork of specialized protocols that haven’t reached feature parity with legacy DeFi.

Pools is a single lending protocol that combines the elegance of legacy DeFi with the ability to handle your NFT assets – both as collateral and a source of yield. One lending protocol to rule them all. A single, unified digital bank account for all your assets: ETH, ERC20s, and NFTs. 

How Is It Different (ft. Why Do I Care?)

While the NFT market has allowed holders to use their digital assets as collateral to secure loans of other assets like ETH or stablecoins, the ability for NFTs to actively generate yield from pooled lending has been notably absent. Fungify Pools closes this gap by overcoming the technical challenges around interest handling and liquidation that were required to add NFT lending pools to a traditionally architected DeFi lending protocol.

For lenders, this means their NFTs are no longer dormant capital. By depositing them into Fungify Pools, these digital assets can now produce a return, aligning them with the behavior of traditional income-generating assets.

For the first time, borrowers can access NFT borrowing pools, enabling them to tap into the utility of an NFT or capitalize on the potential profits from shorting, all available on-demand. This capability can be extended to the long-tail of NFT assets, allowing nearly any NFT to generate yield or be shorted without impacting the solvency of the protocol.

Fungify Pools doesn't just add a new feature to the DeFi landscape; it elevates NFTs to a full-fledged, yield-generating asset class, on par with traditional assets. You can read a full technical description of how this works in the Pools introduction article and docs. 

Season 1 of Pools Liquidity Mining

We’re launching a points based liquidity mining program. It will be live before the token launches on Feb 28th. Half of the liquidity mining supply outlined in the tokenomics section will be used for Pools. The other half will be used for the index upon its launch. The tokens will be released into the circulating supply only once the season has concluded. The program will be structured such that liquidity providers accrue escalating multipliers to their points the longer they supply liquidity. 

This Is Not a Roadmap

Fungify can be the most powerful lending protocol in the industry. Together as a community and DAO, we can execute to bring this into reality. This is not a roadmap, but a vision.

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The Great Fill (TGF) is coming on Jan 4th to bootstrap the concurrent launch of Fungify Pools. This article will detail everything you need to know to participate. The event opens to the core community on Jan 2nd @ 5:00pm UTC, and will continue until Jan 4th @ 5:00pm UTC, at which point the event will be opened up to the public. 

The total amount raised during TGF Phase I will be equal to 1MM USD. The following are the whitelist allocations reserved for the community:

• Mycelia: $10,000 

• Golden Caps: $20,000

The whitelist allocation is capped at $600,000 while the remaining $400,000 is reserved for the public.

Contributions will be made in ETH, and result in the purchase of FUNG tokens at a price of $.045 per FUNG. This represents 2.2% of the total FUNG supply, at a Fully Diluted Valuation of 45MM. These tokens have no lockup and will be immediately tradable when the token is launched, which will take place on February 28th, 2024, alongside the mainnet launch of the Fungify Index.

The proceeds of the sale will be completely dedicated to protocol owned liquidity, being used to supply assets to the Pools lending markets and create liquidity for the ETH-FUNG Uniswap pool.

The public portion of the sale will be available to everyone on a first-come-first-serve basis. Each wallet will have a maximum contribution limit of $10,000. Only wallets with a transaction history which predate this announcement will be eligible for contribution. Any wallets suspected of using sybil tactics will be rejected manually once the sale concludes. 

As we approach the date, we will continue releasing audit reports of the protocol:

Hexen Audit #1 (3 week): Read Here

Hexen Audit #2 (2 week): Read Here

Least Authority (3 week): Coming Soon

Zach Obront (3 week): Coming Soon

This event will not be open to US-based individuals.

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We are initiating Phase I of our launch, starting with Fungify Pools. The first audit of the protocol by Hexens has concluded; you can view it here. The second and third audits are underway, by Zach Obront and Least Authority, and their completion will coincide with the launch of the protocol. The Great Fill (TGF) event will start on January 4th 2024, at which point the protocol will be deployed to mainnet and all audits released to the public. During our TGF event, the community will be given the opportunity to provide liquidity that will be permanently owned by the protocol, in exchange for ownership of the network, i.e., FUNG tokens. 

Everyone who has substantially participated with Fungify will be guaranteed the opportunity to participate in the event. For the public, participation will be on a first come, first serve basis. The total amount of protocol owned liquidity to be raised is ~500 ETH ($1M USD). This will be distributed 50% to supply the lending markets of the Pool protocol and 50% to a Uniswap LP pool. Participants will be given an opportunity to obtain FUNG token close to the seed round valuation, which took place before protocol development began.

Following TGF, the Pools product will be launched to mainnet. The process of bootstrapping liquidity for the Fungify Index will then begin, which will culminate in a final Great Fill and the unlocking of the tokens for trading.

Launching the protocols in this order allows the Pools protocol to accumulate liquidity, enabling index holders to access a deep reservoir of borrowing power. We thank everyone who has patiently been with us through the development process and look forward to the launch. Along the way we will be publicizing the audit reports as they come. 

Update: Read all the details here:

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You've been handpicked to participate in the Fungify trading competition. This guide aims to familiarize you with the intricacies of our protocol and the array of strategies at your disposal. Let’s dive in.

Getting Started

You'll begin the competition with mock $500k. Here's how to load it into your wallet. Additionally, to cover gas costs, we'll airdrop 1 ETH to your account.

Additional Gas

You can find a list of faucets here. We recommend topping up daily.

Taking positions

At the heart of this competition are key strategies: longing, shorting NFTs, and utilizing leverage. Let's delve into how you can effectively employ these tactics.

Long Positions:

Bullish on a NFT collection? Purchase NFTs using:

1. OTC

Serving as a dedicated marketplace for this competition, OTC fills the role of platforms like Blur and OpenSea. The prices are anchored to the onchain floor price of the collections. Trading on the OTC market is possible as long as there's sufficient liquidity. It's important to note that this OTC feature has been crafted specifically for the Fungify competition and is not a standard component of the protocol.

2. Fungify Marketplace:

All of the NFTs listed in Fungify’s marketplace are priced in $NFT index token and the prices are set by their owners. These NFTs are currently being used as collateral and being borrowed against. Should the OTC market run low on liquidity, you might find it beneficial to turn to the Fungify Marketplace for acquisitions.

Leverage for Longs:

Purchased some NFTs? Double down and create a leveraged position using Fungify Pools.

Take this scenario as an example: You're highly optimistic about Azukis and have invested your entire $500k in them. What's next? Leverage those Azukis by using them as collateral to borrow USDC, allowing you to buy even more Azukis. This method can be repeated to amplify your leverage.everage.

And if you're bullish on the entire NFT landscape, opt for the index token and replicate the strategy.

Short Positions:

Fungify introduces the unique capability to short NFTs, allowing you to capitalize when NFT prices drop. Here's the shorting blueprint:

1. Deposit collateral into Fungify Pools.

2. Acquire your preferred NFT.

3. Sell at the OTC desk.

4. Buy back during price drops.

5. Conclude by returning the borrowed NFT and covering any interest.

Leverage for Shorts:

Just like leverage a long position, you can also leverage your short position. Here's how: 

1. Initiate with a collateral deposit in Fungify Pools.

2. Borrow your NFT.

3. Head to the OTC desk for a sale.

4. Use the derived capital as collateral.

5. Return to step 1 and cycle through.

Arb the Peg

One of the quickest and clearest ways you can make profit is when you see a deviation in the market price of the index token vs the calculated peg. 

If market price of $NFT is above the calculated peg: Buy NFTs from the OTC desk → Sell to index (mint $NFT) → Sell $NFT for fUSDC in the Uniswap Pool.

Here’s a quick video covering the mechanics:

If market price of $NFT is below the calculated peg, buy $NFT—> Burn $NFT to redeem NFTs → Sell at OTC Desk for fUSDC.

In Closing:

The strategies outlined herein represent but a fraction of the potential maneuvers available within the Fungify platform. For a comprehensive understanding, we direct you to the additional resources linked below. As you embark upon this competition, we encourage a collaborative approach; engage actively with your team, share insights, and refine strategies collectively.

Oh and don’t forget about the rules:

Good luck

About Fungify

Fungify is a non-custodial NFT peer-to-contract marketplace and algorithmic lending protocol, allowing for instant NFT sales, immediate NFT-backed loans, and a yield-bearing NFT index token. With a small set of elegant primitives, Fungify solves the most challenging problems at the intersection of NFTs and DeFi.

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As we draw closer to Fungify's anticipated launch this quarter, we're pleased to unveil our trading competition — a blend of real trading conditions with paper assets.

The total prize pool is worth over $100K. Top performers can win a MAYC, Pudgy Penguins or a Milady alongside prizes from our Sponsor NFTPerps.

Our visibly active community members have a spot guaranteed. For newcomers, entry will only be granted to addresses that have a demonstrable record of activity on mainnet. 

The goal is simple: use the Fungify App to maximize your profits, using a combination of leverage, longing, and shorting the NFT market.

Rules

1. All participants must be registered prior to the start of the competition. Sign up at signup.fungify.it. Registration will begin 09/22/2023.

2. Participants must have an active address (Tx dating back at least a month) on mainnet or active twitter account

3. Each participant will be placed on a team

4. Each participant will start with $500k of mock USDC

5. Transferring mock USDC to or from your address will disqualify you from competition.

6. Utilizing more than one wallet to manipulate the competition in any way will disqualify you from the competition.

7. Trading between team members to boost individual PnL will cause disqualification. Ex. Buying/Selling of NFTs at low price.

8. Engage with the Fungify protocol at least once during the competition in order to qualify as a active participant

9. Individuals are placed on a leaderboard for individual rewards.

10. Team drafts will start on 10/02/2023.

11. Fungify has sole discretion regarding violations of these rules to ensure a fair competition for all.

🏆 Prize Chest:

Solo Spores

🥇 1st Place* (Highest PnL Overall): MAYC

🥈 2nd Place* (Highest PnL of Winning Team): Pudgy Penguin

🥉 3rd Place* (Highest PnL of Losing Team): Milady 

*If there’s an overlap, the next in line gets the reward.

1st through 5 on winning team will be distributed 3k vNFTP Tokens sponsored by NFTPerps

Squad goals:

Winning squads earn 1k FUNG Tokens per member. Top 10 performers get an extra 1k FUNG Tokens. The runners-up aren't left behind — they bag 500 FUNG Tokens each.

Weekly Prizes:

Throughout the tournament we will have weekly prizes for active traders. Details will be announced at the start of each week. 

How to Register:

To register, go to signup.fungify.it and complete the registration task. Registration will begin 09/22/2023. The team drafts will start on 10/02/2023. The competition will be tracked and you’ll be able to check your rankings daily on the official leaderboards.

TL;DR:

• Registration start date: 09/22/2023

• Registration form: signup.fungify.it

• Team draft start date: 10/02/2023

• After the Paper Trading Competition begins: You will load your wallet with 500k mock USDC to use for trading.

About nftperp

nftperp is the leading perpetual futures DEX for NFTs, allowing you to take long or short positions on blue-chip collections with up to 10x leverage.

About Fungify

Fungify is a non-custodial NFT peer-to-contract marketplace and algorithmic lending protocol, allowing for instant NFT sales, immediate NFT-backed loans, and a yield-bearing NFT index token. With a small set of elegant primitives, Fungify solves the most challenging problems at the intersection of NFTs and DeFi.

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Readers may be familiar with Fungify’s NFT Index. It allows everyday users to obtain broad NFT exposure by just purchasing the $NFT token. It also allows collectors to use their NFT as collateral in a loan, receiving $NFT in exchange. However, without the ability to borrow against $NFT, users aren’t able to obtain stablecoins or ETH for the purposes of yield farming or leveraging up their position. 

The Fungify Lending Pools, originally intended as a solution to the problem of creating lending liquidity for $NFT borrowers, function as a fully general solution to the rest of NFT DeFi, allowing NFT shorting, cross-margined NFT collateralized loans, and lending yields on NFTs. 

Supply

The lending pools accept NFTs along with ETH, USDC, $NFT, and USDT as supplyable assets. When an asset is supplied, it is automatically used as collateral and contributes to a user’s Borrow Limit. The degree to which any given asset contributes to the Borrow Limit is determined by the asset’s Collateral Factor (CF). Assets that are more liquid and less volatile have higher collateral factors and therefore contribute more toward the Borrow Limit. A full accounting of each asset, its collateral factor, and its attendant risk parameters can be found in the Risk Assessment Framework section. 

When an asset is supplied, the user receives a corresponding fToken whose exchange rate always increases against the underlying in proportion to interest accrued. An exception to this is supplied NFTs, which accrue fUSDC as interest.

Withdrawals

When an NFT is supplied, it allows others to borrow it while the supplier earns interest in the form of USDC. The trade-off is that the protocol does not guarantee that an asset with the same NFT ID will be withdrawn once a user has finished supplying it. A concrete example: if a floor Cryptopunk is supplied and borrowable, and the user withdraws the Cryptopunk, then they will receive a random Cryptopunk from the lending pool rather than the one they deposited. 

Borrowing

Once a user has supplied assets, they may borrow against them up until the Borrow Limit. If the assets supplied as collateral are NFTs, then USDC must also be supplied in order to facilitate interest payments. If the amount borrowed exceeds the Borrow Limit, the collateral is auctioned off until the user account is solvent. If USDC supplied drops to zero while borrowing NFTs against NFT collateral, the collateral asset is sold and the loan closed. To close the loan, the user may repay the principal using any NFT from that collection. 

While an asset is used as collateral, its corresponding fToken cannot be transferred or moved from the wallet taking out the loan. 

Interest Rates

Each asset has its own interest rate market, with rates determined by the utilization of free liquidity. As demand for supplied assets increases, borrowers pay proportionately higher interest rates (and vice versa). Interest is accrued each block, which increases the exchange rate of fTokens relative to the underlying. Interest accrues to NFT suppliers by incrementing upwards their balance of fUSDC; this is proportional to the reduction of the fUSDC balance of NFT borrowers.  

Liquidations

When an account’s borrowing exceeds its borrow limit, a liquidator can seize the account’s collateral at a discount in exchange for repaying the principal. The amount of collateral that can be seized is related to the asset’s Close Factor. The size of the discount is determined by the Liquidation Incentive. In the case of ERC20 assets, this incentive is modest (6%) and in line with other lending protocols. In the case of ERC721s, the discount is equal to the remaining value of the NFT. This is a consequence of NFTs being indivisible, unlike ERC20s.

Liquidators can liquidate multiple assets simultaneously, which may sometimes be necessary when an account is collateralized across a mix of ERC20 and ERC721 assets. 

Risk Assessment Framework

Each asset has a collateral factor, liquidation incentive, and borrow cap. These factors are based on the volatility and liquidity of the asset.

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We are thrilled to announce that Fungify has transitioned its testnet to the Polygon PoS Mainnet. This decision was driven by the escalating gas prices that testers have been facing on the Goerli chain, thanks to the innovative LayerZero bridge giving gETH a monetary value.

Testooor sign-ups opened just three weeks ago, and have elicited an enthusiastic response, with over 1000 individuals signing up 🥳. The first wave of accepted users included long-standing Fungify community members, whose insightful feedback has been invaluable. However, surging gas costs emerged as a major obstacle. To circumvent this and extend our testing to a broader audience, we found the most effective solution in Polygon PoS Mainnet.

Why Polygon? 

Polygon, an EVM compatible chain, offers significantly lower transaction costs while being a closer replication of the actual production environment. Testnets like Sepolia have yet to implement significant parts of the DeFi infrastructure stack, even as Goerli grows closer to deprecation.

Yoots NFT Collection Joins the Index on Polygon

In conjunction with our transition, we're excited to announce the addition of the Yoots NFT collection to our index. Yoots is a prominent NFT collection on the Polygon Network, boasting the highest trading volume on the chain. Its integration into our index will diversify the offerings available to our users.

Get started

In order to gain access to to the Fungify Testnet, start by joining our Discord Community and navigate to the #testnet-entrance channel. There, submit your address for approval. Once your address has been approved, proceed to https://testnet.fungify.it/ where you can mint your mock assets.

By doing so, you will receive mock NFTs and mock USDC, allowing you to short or long the NFT index or borrow against your NFT to leverage your position. While you experience the app, metrics will track your PnL helping us monitor your progress

Rewards for Beta Testers

To mark our transition to Polygon and to motivate the invaluable input from our testers, we're creating incentives that will reward engagement and feedback. Find out more on the Fungify discord.

The Road Ahead

Our transition to Polygon for the beta testing phase is just one part of our wider strategy. We are dedicated to developing and releasing the Fungify app on the Polygon PoS network, following our initial release on the Ethereum Mainnet.

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