This fundamental analysis was published in November 2022 and is part of the week’s paid newsletter from Crypto Consulting Institute, providing market insights, actionable trade signals, and fundamental analyses. For more information, visit: https://www.cryptoconsultinginstitute.com/newsletter
It would not be unfair to suggest that many who spend their lives working dream of obtaining their own home. Private property that is theirs that no one else can precisely replicate.
However, starting from scratch involves a process before it reaches a stage where it’s liveable.
It starts with a plot of land zoned off by a local/state/federal administrator. Once the plot is acquired, you must go through a compliance process to ensure that your designs satisfy legislation and regulations.
Often this takes years to obtain approvals to commence work. At this stage, the land is only worth its physical space and maintains a non-fungible value. That is, no one else can own the same plot of land.
If one wishes to buy vacant land, it would be in a different location and likely with different zoning dimensions. But if a buyer wanted your plot of land and you were willing to sell it, they would likely have to compete with other buyers depending on the extent to which that plot of land is in demand.
Alternatively, the seller may list their property in a “buyers’ market” as they may, for whatever reason, need to recover the funds they used to purchase the land and often sell at a loss.
But, if the seller can continue development, they’ll likely make ongoing investments for someone to design a house and hire builders who would then be responsible for acquiring the resources to complete the build.
Both services are fungible purchases with fixed repayment obligations from an invoice outlining the cost of materials and labour. Furthermore, the house could be refurbished and come with appliances, furniture, and home living items if ever resold.
Once the build is complete, you can attribute a fungible value that may fluctuate with the value of commodities and non-fungible value from the land.
Having commissioned the build, they would not likely seek to sell the property for less than what it costs to build, notwithstanding natural weathering that leads to degradation over time. If commodity prices are high, a prebuilt home may be desirable so that the construction costs and the impacts of inflation unburden a landowner.
Of course, this is an oversimplification. Many factors are involved in real estate valuations.
One could purchase an undesirable plot of land in the desert and then build a mansion, but it is unlikely to attract a higher price tag than a mansion built on the coast of a nice beachside community. Unless the plot in the desert was a significantly larger zone than the beachside property, it is unlikely to attract a higher price tag. The fungible costs of the house built on top of the desert land would likely fail to accumulate non-fungible market value. The non-fungible value of the home on the beach will probably hold up as it has straightforward utility in terms of access to nearby resources that would be less accessible than a house built on a barren slice of the desert.
In similar terms, we can think of NFTs (non-fungible) and underlying utility (use case with fungible value attribution).
Across multiple FAs, we have touched on NFTs at a high level and gone into depth on gaming NFTs. We have yet to venture deeper into the concept of utility that seeks to capture real-world value or create new means of value attribution.
The purpose of this FA is to explore NFT Wrapping as a concept. We will explore use cases on Envelop’s (NIFTSY) NFT wrapping protocol.
We will focus on the implications of wrapped NFTs in capturing fungible value, Envelop’s current use cases, and Envelop’s role in fulfilling novel use cases with projects such as Peak Finance and NFTA. Further, we will discuss implications on the future of NFTs in shaping how users interact with NFTs, and finally, an investment thesis around the $NIFTSY token.
Land ownership is a fitting analogy for understanding what gives an NFT value.
An NFT occupies a fixed location, or token contract address, on a blockchain. The non-fungible value is often attributed to each token ID minted and its rarity as part of an NFT collection. It is often the case that each NFT will have a unique combination of traits, each with varying degrees of rarity. For NFTs with several scarce attributes by percentage, obtaining another NFT with the same traits or characteristics isn’t easy.
This is how we understand NFTs as having non-fungible value. While the traits contained within may vary in rarity, it is highly speculative in that while a trait may be rare, there also needs to be consensus around the value of that trait.
Let’s think of a plot of land. It certainly sounds desirable to have a waterfall on your property, but what if the terrain made it difficult to build anything fungible on top of it, or what if the land itself required a lot of work to make it viable for those that might want to live there?
When we build a house on top of a property, we begin to make fungible investments into resources and labour required to reach a price agreement on a fixed fungible value based on resource input. That puts a fixed cost on top of a fluctuating non-fungible valuation of the physical land itself.
In previous FAs, we explored the concept of wrapping tokens. For example, $ETH is a unique digital asset on the Ethereum blockchain. Still, by wrapping it (locking the $ETH in a contract), we receive Wrapped $ETH ($wETH) that can interact with a smart contract that follows a rule specific to that runtime environment (Ethereum virtual machine). Use cases unlocked by this range from supplying liquidity to decentralized exchanges, providing collateral for a loan, purchasing NFTs, or bridging outside the native ecosystem. Wrapping tokens is not often tangible to the end-user, as many contracts may automate the wrapping and unwrapping process internally.
To understand early use cases of NFT Wrapping, we can recognize some similarities with the principles of token wrapping. $ETH as a raw digital asset can be used to send, receive, pay gas fees, and collateralize a validator node. However, the similarities tend to stop here as $ETH is a fungible asset, and the NFT is not.
But what if you could start building your home (NFT) with hard collateral assets ($ETH et al.)?
To achieve this, we must wrap the NFT. In practical terms, we are locking the original NFT that may exist as an ERC-721 or ERC-1155 token into a contract that also holds an ERC-20 token deposit. Once a user completes this process, they will mint a Wrapped NFT (wNFT).
The outcome is that the original NFT and collateral deposit are now locked into a contract. The wrapped NFT not only takes on the characteristics of the original NFT but is now effectively a receipt for the underlying collateral.
Congratulations, you’ve now built a home and furnished it (collateral) on your previously vacant plot of land (original NFT)!
But before we get too excited, this is the beginning of understanding the concept and potential applications that will evolve from it.
As a starting point, we review Envelop.
The discovery of Envelop began in November 2020, and the Envelop DAO formed in February 2021. The team participated in a Binance hackathon to produce a minimally viable product in March 2021, and they have since completed a Beta release V1 in June 2022.
At the highest level, the protocol consists of the core elements:
The protocol wraps collateral and distributes market royalties to increase the pro-rata size of the underlying collateral. With enough secondary market trading activity of wNFTs, the royalties mostly go back into the underlying collateral instead of exclusively enriching a creator, which is mainly how NFT projects profit on an ongoing basis.
The oracle pulls market data to track the value of the underlying collateral. Like building a house, if the cost of construction materials (such as wood) increases, you can arguably assign a greater value to the property in the real estate market based on actual market data. If the value of locked collateral increases, the wNFT reflects a greater underlying collateral value pro-rata (quantity of tokens, not strictly in dollar terms).
It becomes nonsensical to ignore the collateral value of a wNFT when setting the price or accepting offers on secondary NFT markets. Oracles are responsible for maintaining the integrity of data to track the value of underlying assets (for more on Oracles, review our FA on Chainlink).
Finally, an Index is the final critical component of how Envelop implements wNFT collateral. A standalone oracle can be manipulated — by assuming an aggregator function and collecting multiple data inputs, the collateral market value contained within the wNFT can be secure. While this may sound mundane, combined with Oracles, the Index enables collateral to be locked up on a chain of origin, and the wNFT can be bridged to multiple chains. The outcome is the wNFT maintains a collateral value, and the host chain secures the collateral, enabling versatile cross-chain opportunities.
What makes this arguably more secure than standard ERC-20 bridging, of which hundreds of millions of dollars have been exploited (largest DeFi exploit; $600M+ removed from Poly Network; surprisingly, the hacker returned nearly half of funds) is the time-lock function.
When users or projects supply liquidity as collateral to a wNFT, they can implement an immutable time-lock on the underlying collateral. This function solves several problems, but specifically, even if wNFT got hacked through a commonly exploited mint function, they cannot claim the underlying collateral until after the time-lock expires.
From a security standpoint, the role of a Micro-DAO could be to agree on the illegitimacy of a minted wNFT and forbid it from redeeming the underlying collateral in the event of an exploit. While imperfect, as we have yet to see this technology be targeted by those that would exploit it, the underlying collateral cannot be exploited through a standard token bridge minting exploit that has plagued cryptocurrencies.
“Animoca Brands is delighted to have been among the first to support the wNFT technology developed by ENVELOP. It presents interesting new opportunities in the area of crypto investment, and we see various benefits to using this format.”
– Yat Siu, Executive Chairman and Co-founder of Animoca Brands
Another problem that a time-lock function solves is using NFTs as vehicles for fundraising. Envelop held the first wrapped initial NFT offering with underlying tokens in a time-lock per a vesting schedule. To understand the significance of this development, reflect on pre-seed, seed, and over-the-counter (OTC) arrangements that come with vested tokens.
An investor, typically a venture capitalist (VC), will have their token allocation subject to a vesting period or a time-locked in a smart contract. While not profound, there are risks to the smart contract that releases ERC20 tokens to an investor, whether it be user error from providing the wrong address or contract-level exploits.
Furthermore, investors may wish to sell their rights to receive vested tokens. wNFTs containing vested tokens enable the investor to sell their right to vesting on NFT secondary markets. By applying secondary market fees, those holding on to their SAFT wNFT are rewarded a larger share on redemption through wNFT sales that emulate OTC deals. Only after a determined amount of time has passed will they be able to unwrap the NFT to receive the underlying collateral.
While there is a well-kept repository of information exploring the fundamentals of Envelop, it is more important to understand those mentioned above as the core elements of the protocol unlock many use cases.
According to Envelop’s roadmap, these core elements are mainly complete, and a minimally viable product, V1, is operational. Most of the ongoing work is on multi-chain integrations and increasing sophistication of oracle and index functions that will evolve as more nuanced data sets become available in the future.
However, Envelop’s core functions lay the foundations for many use cases outlined above, and many are yet to be realized. Once we’ve acquired our NFT (or unique plot of land), we can start building functions on top of it.
To this end, Envelop has P2P services where anyone can wrap an NFT with collateral for personal use. However, the primary value proposition of Envelop is the B2B elements that enable projects to pursue their novel use cases by modifying the underlying open-source protocol.
Once the land (NFT) is purchased and the house is built (wrapping protocol), we can think of how we might like to furnish it (projects modifying protocol to meet desired use cases).
As previously stated in FAs, I have a direct conflict of interest because I am a co-founder of Peak Finance and NFTA.
It is worth exploring our development intentions through our recent affiliate partnership with Envelop to provide a project-level perspective on potential use cases for NFT wrapping.
Firstly, Envelop is open-source code, and developers can fork the Envelop protocol. Still, out of respect for the hard work put into Envelop and the benefits of an ongoing relationship with NFT wrapping experts, we opted in to take on a partnership with Envelop. Doing so also exposes our work to Envelop’s business licensing as a regulatory-compliant service.
Secondly, Peak Finance is a seigniorage protocol that we had explored in a previous FA that we had decided long ago to build more sustainable utility beyond simple LP staking and single staking in The Summit for $PEAK emissions.
Many DeFi projects offer NFT staking to provide a “boosted” share of emissions from a liquidity mining contract. However, there is often no underlying collateral value other than the NFT itself.
The Tomb Fork was a one-bedroom house we built extensions upon.
Specifically, applying taxation mechanics that respond to the peg, use cases for the $PEAK token (purchase gift cards, buy NFTs, participating in the lottery, etc.), and seeking additional revenue streams to enter the share token $PRO (Poseidon NFTs; treasury traded by CCI Technical Analyst and contributor Steve Body from Aeacus capital, NFTA Andromeda Marketplace Fees buyback $PRO, and platform fees from emerging DApps in our ecosystem).
Deploying the Peak Wrapping protocol, powered by Envelop, on Andromeda enables us to collateralize our NFTs. Giving an underlying value to the wNFT stake to qualify a greater share of emissions during inflationary epochs. On the house’s first floor, we have actively traded strategies to reward holders with a share of profits. NFT holders will be rewarded on our second-floor extension for providing time-locked collateral to NFTs and their underlying share of collateral. This collateral will grow not only through the trade activities on the first floor but growing the NFT treasury through royalties from secondary NFT market activity on the second floor.
Once mint is exhausted and collateral added to NFTs, holders are in a position where they are not strictly locked into a token like $PEAK that applies a high 20%+ sell fee depending on the state of the peg. Instead, owners can sell their collateral time-locked wNFTs on the secondary NFT market, coupled with the speculative value attributed to the underlying NFT. The time-locked collateral adds a less speculative valuation to the wNFT, a synthetic asset representing locked collateral. Oracles obtain the market value of the underlying collateral of the wNFT cross-chain. This means that wNFTs can maintain their underlying collateral value on the host chain without an ERC-20 lock and mint function that cross-chains the collateral. Eliminating a layer of risk associated with taking funds from a genesis chain to a target chain that is the source of the most prominent exploits in DeFi.
Further, we intend to create a wNFT launchpad for new projects. Purchasing a wNFT during the seed rounds of a project subjects collateral to a time lock upon receiving the wNFT. This function will enable seed investors to trade their vested tokens on secondary NFT markets WITHOUT impacting the market value of the ERC-20 tokens. It removes the burden on project teams to distribute vested tokens, and offers opportunities to early investors to sell their seed investments over the counter on the secondary market.
For Andromeda, we will also seek to provide wNFT farming services to enable projects to integrate NFT staking features on their liquidity mines and provide a second layer of a pro-rata token accumulation from secondary market activities with wNFTs. Those who hold on to a wNFT the longest, or rather are the last to redeem their underlying collateral, will have a greater share of the total collateral pool than those who exit early.
Peak Finance and Metis Andromeda ecosystems mutually benefit because there are no upfront fees for wrapping, but there is a small fee for unwrapping. These fees will be used to obtain and burn $PEAK (which increases retention of $METIS in the liquidity pools), accumulate partner project tokens to distribute in liquidity mines (leading to greater partner token retention) and the $NIFTSY token as part of our affiliate arrangement.
Andromeda is the testing grounds for rolling out a series of products derivative of the Envelop protocol functions. Once testing is complete and we have achieved proof of concept, NFTA will take over in pursuing further innovations. Specifically, NFT Bonds. NFTA Whitepaper will soon be released, explaining this concept in finer detail. Still, at a high level, users can wrap collateral with their NFTs and apply a programmed strategy to the underlying collateral. Whether that be dollar-cost averaging, API integrations with algorithmic signals, or fulfilling our pledge for Sub-DAOs from the Prometheus Whitepaper with a voting system to utilize collateral, NFTA will continue to innovate beyond what is available as an individual user on the Envelop protocol.
Envelop will enable NFTA to wrap NFTs minted of merchandise sold on the marketplace. As part of NFT Apparel’s e-commerce loop, we mint an NFT of the design of the customer purchase. Through wrapping, we will then be able to take these real-world items into a metaverse.
Beyond these goals, NFTA will pursue many use cases, such as enabling direct purchases of wNFTs with credit cards, significantly reducing the barriers to entry for new investors. Users who wish to start a savings account for their next of kin will be able to purchase a wNFT and top up the collateral at will, which will dollar-cost average into the target asset of their choice over time. Making the collateral, which can be up to 25 assets, transferable to their next of kin as inheritance or as means to enact a will.
Price: $0.002175856737
Maximum Supply: 500,000,000
Market cap: $1,087,928
All-time high: $0.072981 (-97.0%) Dec 02, 2021 (11 months).
For projects to utilize the Envelop protocol through an official partnership as an affiliate, they must lock up an amount of $NIFTSY tokens into a wrapped NFT that the Envelop DAO holds for 5 years. By doing this, projects receive support with integrations and deploying use cases in a partnership capacity.
To extend upon our housing metaphor, since the Crypto Kitties’ proof of concept in 2018, the NFT (housing) market began the process of zoning and subdividing plots of land.
The land was valued based on the surrounding environment and whether there was enough speculative demand in the market to meet supply. With NFTs being relatively few and far between, we observed that many would pay exorbitant prices on the secondary market for the likes of Crypto Punks and Bored Apes Yacht Club due to a perceived scarcity and non-fungible value of membership.
After years of zoning, it wasn’t until 2020 that we started seeing construction take place on these plots of land. Many continued to speculate on cool-looking profile pictures (empty houses), but eventually, the market became saturated, and ongoing trade activity was primarily a derivative of speculation. A bubble not unlike what we have previously witnessed in the cryptocurrency markets.
While some digital properties looked great, and there was a lot of hype around the location. But once great-looking profile pictures became overabundant, there were not enough people to live in the newly constructed houses. Not all homes were equally liveable; many were built in isolated locations and abandoned, while few thrived.
It wasn’t until 2021 that the likes of Axie Infinity took to the stage offering gaming NFTs, the equivalent of populating your property with tools that enable you to interact with your environment to make changes on an ongoing basis. Axie monsters could battle other monsters to earn the $AXS token. But once users realized the potential of “passive income” and participation peaked, we saw a sharp drop in the value of the Axie reward tokens.
Many NFT projects began furnishing their empty properties with promises of utility, making it somewhere you can not only be pleased by the aesthetic surroundings but that you could put time and effort into maintaining to sustain value. Further, into 2021, several projects offering VIRTUAL land plots emerged that took on many of the principles we’ve alluded to in this housing metaphor.
Some plots of land were ideally located and took on a higher sum. Still, in many cases, it boiled down to whether the surrounding economy (or play-2-earn mechanics) made a living there sustainable as to whether virtual land plots could maintain their value. Many projects have realized this, and landowners have spent much longer than anticipated holding on to pieces of virtual land that they cannot currently do anything with.
While we may be stretching out this housing metaphor to explain the state of NFTs, we need to illustrate shared factors by comparison between the NFT and property market:
- Supply and demand principles are core to valuations.
- Demand is often a product of economic conditions and available economic opportunities. (a mansion is not worth as much if there are no nearby shops or malls)
- Proof of time and energy does positively impact valuations (Gaming NFTs ‘levelled up’ to earn more, or home renovations)
- Productivity (Automated Collateral NFTs or farming/work shed to produce items of value)
- Revenue-generating potential (rental NFTs or leasing out property)
With all this in mind, we now hone in closer on Envelop (NIFTSY). We can think of Envelop as the equivalent of a hardware store. Landowners (NFT owners) can source the tools and resources they need to develop their land and create utility.
A static non-gaming NFT, in a marketplace of other static NFTs, obtains value through branding and hype that are derivatives of speculation. There are exceptions. Many NFTs are community gated, meaning if you want to be a part of an exclusive and closed-off group, you must own the underlying NFT. Several examples, such as Bored Apes Yacht Club, Astrobot Society, and Real Vision, are a handful of NFTs that offer holders access to “alpha”, exclusive perks, or quality educational content.
Alpha is a common term that refers to high-quality information that is not public knowledge and is exclusive to those that subscribe to the source of information. Holders with access to alpha can action private information to achieve an advantage over the public. It is increasingly becoming a widespread use of static NFTs require them to enter a community channel, commonly through Discord, where they can access this information. For market signals providers and crypto educators, NFT-gated communities are becoming increasingly commonplace. Should holders sell their NFT, they will lose access to alpha channels.
Beyond this, there is not much else that you can do with a static NFT. There are aesthetic elements to an NFT that speculators can assign value to, but there is not much to do with the NFT alone.
Through the Envelop protocol, you can use the static NFT as an entry instrument into the functions available through wrapping. In broad terms, Envelop is a protocol that takes an empty house on a plot of land and makes it functional — even productive.
As NFTs get locked in a wrapping contract, a new contract gets sent into the users’ wallets that take on the fundamental characteristics of the underlying NFT. Such as recognizing the token contract address, token ID, and metadata (pictures, audio, video, etc.).
This enables a critical function for the development of metaverses and P2E games. Wrapping protocols that create compatibility into metaverses should enable any NFT to enter a metaverse without impacting the integrity of the underlying NFT. Wrapping is a crucial function and seems the most viable means of breaking down the ‘walled garden’ that is a standard gaming limitation.
Fortnite is a popular free-to-play game. However, the company behind Fortnite, Epic Games, has generated significant revenue through this game from players that will purchase in-game items. Wrapping enables inworld objects to be taken outside games built on-chain and compatible with entering other metaverses or tradeable on secondary markets. Monetization of gaming activities is an important concept that sustains the overall appeal of the P2E idea.
Wrapping also simplifies entry into the cryptocurrency market for new users.
If we reflect on the previous bull market, there was a period when NFTs overtook Bitcoin as a Google search term. Indeed, NFT adoption at various times appeared to outpace the adoption of tokens or digital assets like $BTC or $ETH. wNFTs with underlying collateral greatly simplify accessibility to tokens and digital assets. With a credit card, a user could purchase an NFT that holds a basket of assets like $ETH, $BTC, or other mainstream tokens. Eliminating users’ need to set up an exchange account and wallet creation is also greatly simplified.
wNFTs are also a vehicle for start-ups and launchpads. With time locks, investors have direct control of the wrapped NFT and can extract collateral from the contract as time passes per a time-locked vesting schedule.
wNFTs as a vehicle for cross-chain activities is a significant advancement in cross-chain capabilities. The key reason is that collateral is locked on the host chain, and the wrapped NFT can be made available on secondary markets across multiple blockchains. Through oracles and indexes, market data of the underlying assets can be represented cross-chain, similar to a synthetic derivative. In the event of an exploit on the target chain, this means that with time locks on collateral, a black hat hacker cannot as quickly obtain the underlying collateral through wrapped NFT mint exploits. Further, having DAOs integrated with the distribution of wNFTs ensures that an intervention can potentially blacklist illegitimate wNFTs.
These are very high-level use cases for NFTs outside of their static characteristics. Still, without a protocol to apply contract functions to NFTs through wrapping, they will remain limited in utility. NFTs at the base level can build in specific utilities, especially gaming NFTs, but it becomes a matter of ‘once the egg gets broken, there is no getting the yolk back inside’. NFT wrapping protocols ultimately enable the versatility to apply use cases as wrapping contracts roll out.
Let’s consider Envelop ($NIFTSY) as an investment prospect.
Thus far, the implications of the technology have been discussed at length. However, we do recognize that the complexity of the concept can be a barrier to entry.
A remarkably similar project in terms of not only complexity but outcomes that we previously covered in our FAs is Ethereans ($OS). Like Envelop, Ethereans is a unified protocol that puts forward a new token standard by merging existing standards. This unification enables tokenization of NFT fractions, shared treasury management, internal staking, on-chain DEX aggregator, etc.
While there are absolute differences between Ethereans and Envelop, product complexity is a barrier to entry to new entrants. Both projects have an impressive wealth of information published to help potential investors understand the value proposition, but many fail to see how it will make money. Projects like $SHIB and $DOGE are simple to understand; a billionaire talks about it or is known to have invested in it, then the masses follow; these speculators care little utility. As a result, both $NIFTSY and $OS projects appear to be stuck in 7-figure territory per valuation by market cap.
This FA has sought to simplify Envelop, and hone in on the core tenets of the protocol. Still, the volume of information published by Envelop explaining their applications and announcing partnership integrations is significant.
However, where Envelop differs from Ethereans is the focus on businesses. As a product primarily focused on B2B applications, onboarding new partners and projects required to lock up the $NIFTSY token into wNFTs held by the Envelop DAO for 5 years effectively raises the price floor. The relevant metric for investors is the rate at which Envelop can onboard partners to bring positive price action to the token.
As an investor, $NIFTSY presents a significant degree of volatility. Like many low-cap projects, they are down 96.7% from their 2021 all-time highs. However, basic mathematics presents a proposition whereby increased onboarding of affiliate projects that commit to locking approximately 2 million $NIFTSY tokens in a wrapped NFT time-locked for 5 years presents an interesting possible outcome.
500,000,000 is the total token supply. By onboarding up to 250 projects, assuming they all time-lock 2M $NIFTSY tokens, that would exhaust the maximum supply of tokens.
By the Envelop teams’ admission, despite the MVP being well refined and deployed, they forecast utility growth in NFTs and ongoing development of their protocol to extend out for the next 5–8 years of discovery. As a low-cap investment, there is indeed a strong upside thesis, given it is unknown the number of future applications that will emerge.
However, liquidity shortages by locking up supply in affiliate NFTs present challenges to maintaining enough liquidity for large-sum investments. Interestingly, there are other means of obtaining $NIFTSY through wrapped NFTs sold on their protocol. The price and time-lock vary, ultimately impacting how much $NIFTSY can be redeemed pro-rata.
For those wishing to obtain the $NIFTSY token as an investment, the only way to get a decent-sized holding would be by dollar-cost averaging or fixed limit-orders placed on an exchange. Lump sum market purchases are not viable, as the investor would inflict a significant price impact on $NIFTSY based on available liquidity. Similarly, taking profit in $NIFTSY is not feasible to market close an entire position. Particularly an investment position built through dollar cost-averaging strategies to mitigate the effects of price impact. Investors should be aware of the need to adhere to disciplined limit orders or dollar cost averaging to enter and exit positions.
While inherently high-risk as an investment, $NIFTSY is an interesting opportunity, given that we know from previous FAs and basic maths that one does not need to invest a lot to make a significant profit on a low-cap investment. With a market cap slightly north of $1M and at least 3 years before the first affiliate wNFTs will unlock the underlying $NIFTSY collateral before it is possible to sell, we do not need to overexpose our capital allocations to building a position.
Whether Envelop attracts retail investor interest is not as important as onboarding new affiliate partnerships. Exposure to their protocol’s increased use will likely grow the price floor.
It would not be surprising, should Envelop onboard numerous partners that they may require an additional token to capture value from partner usage. However, this claim is purely speculative, but it seems that liquidity shortages will be unavoidable.
For projects that establish an affiliation with Envelop, we can expect there will not be a significant degree of overlap. NFT utility is still in discovery. While many can cite use cases that are an extension of the core protocol under development, we can be confident that no one knows the full potential of NFT utility heading into the future. As such, $NIFTSY is not a short-term investment but a mid to long-term hold.
In summary, Envelop is an impressive technology that provides reverse-compatible utility to NFTs. It is increasingly becoming a consensus that speculation on NFTs that mainly offer aesthetics without utility or fail to build an enthusiastic community around them will be unlikely to survive. Envelop wrapping protocol allows dead NFTs an opportunity to achieve revival through utility.
Conflict of Interest Disclosure — As a co-founder of Peak Finance and NFTA, we have recently engaged in a strategic affiliate partnership with Envelop Protocol to leverage their NFT Wrapping capabilities. I am directly interested in the success and ongoing development of Envelop and derivative products under Peak and NFTA.
BSCscan, $NIFTSY token contract by holders, https://bscscan.com/token/0x7728cd70b3dd86210e2bd321437f448231b81733#balances
CNBC, ‘Investors must be vigilant and cautious’ following the massive $600 million DeFi hack, experts say’, 11th August 2021, https://www.cnbc.com/2021/08/11/over-600-million-dollars-was-stolen-in-a-massive-defi-hack.html
Envelop (NIFTSY) Blog Repository, information sourced from blogs within, https://blog.envelop.is/
Envelop (NIFTSY) Landing Page, https://envelop.is/
Envelop (NIFTSY) Linktree, https://linktr.ee/ENVELOPNIFTSY
Envelop (NIFTSY) YouTube Channel, information sourced from videos within, https://www.youtube.com/c/ENVELOP
Etherscan, $NIFTSY token contract by holders, https://etherscan.io/token/0x7728cd70b3dd86210e2bd321437f448231b81733#balances
GIthub, https://github.com/niftsy/niftsysmarts
Polygonscan, $NIFTSY (PoS) token contract by holders, https://polygonscan.com/token/0x432cdbc749fd96aa35e1dc27765b23fdcc8f5cf1#balances
wNFT Marketplace, https://scotch.sale
Specta — https://specta.is/
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