@0xdavide
🖼️You may have noticed that some NFT-related tokens have appeared on the market: the most well-known is $PNKSTR (30x in about 1 month, although now it's down -50%). These are automated trading protocols that connect token, burn and "NFT sweep". How do they work?
1) Each $PNKSTR swap on Uniswap incurs a 10% fee, 8% of which goes into an ETH treasury.
2) When the treasury reaches the minimum floor of CryptoPunk (about 48 ETH today), it buys it.
3) Once purchased, it relists it at a price of +20%.
4) $PNKSTR Buyback+Burn.
As said, $ETH earnings are used to purchase $PNKSTR on the market and then burned. This creates deflation for the token.
This mechanism has generated over 700 $ETH in fees and a 2.8% reduction in the $PNKSTR supply. This makes the collection more active, leads to on-chain activity (on Uniswap and the Ethereum mainnet), the burning of $PNKSTR, and even 1% royalties for creators.
Obviously, the downside is that the 10% fees are very high. For example PudgyStrategy use similar models.
0 reply
1 recast
4 reactions