⚡Problem Statement

Risk and Deficiencies

Most NFT markets today are plagued by illiquidity and inefficiency (in the forms of wide bid/ask spread, arbitrary and far apart prices and low transaction volume). Most of these market inefficiencies today are rooted to 2 core problems that deter market participants from entering the NFT space.

1. Price Barrier: the price growth of premium NFTs in recent years have been so explosive that they have become out of reach for the general public. While many people are willing to spend a considerable portion of their disposable income on premium NFTs, the price barrier is simply too high that they are ultimately still priced out of the entire product segment. As a result, many buyers turn to cheaper NFT projects as alternatives, which more often than not turn out to be lowly funded projects that have little to no value behind them.

2. Unattractive Risk Profile: the combination NFT’s extremely speculative nature (i.e. the fact that an NFT could very well be worth zero in a year) and high entry price means that buyers must be able to and willing to stomach the significant downside risk, especially since there are no existing ways to hedge away the risk of an NFT, to lock-in gains or to quickly unwind an NFT position. The rigidness of NFT as an asset today deters many buyers with sufficient funding from entering the market and from holding NFT.