The sustainability of FloorDAO's market-making strategy for its NFT derivatives protocol hinges on several factors. By leveraging Protocol Owned Liquidity and NFTX, FloorDAO aims to provide deep liquidity for blue-chip NFTs, generating high yields through automated floor sweeps and DeFi integration. However, the strategy's long-term viability is questionable due to market volatility, reliance on community governance for collection selection, and potential regulatory risks. The 2023 hack, resulting in a $65,000 loss, highlights security vulnerabilities. Additionally, the NFT market's 2022 collapse, with 95% of collections becoming valueless, poses significant risks to sustained demand. While innovative, FloorDAO's approach may struggle without robust risk management and diversified revenue streams to counter market downturns and ensure economic stability.