NFTs have gained a lot of traction in the past year, trading over more than $23 billion in volume. While there are a lot of platforms and marketplaces that allow users to list and sell their non-fungible tokens, the process is exhaustive and time-consuming. Users lack ways to trade NFTs quickly and efficiently.
Liquidity is generally not much of a problem for other crypto tokens due to the process of liquidity mining and the presence of AMMs (Automated Market Makers). But for NFTs however, the situation is somewhat different. Due to the current ways of trading NFTs, NFT markets are highly illiquid and force users to undercut the floor prices of the NFT projects for just being able to buy/sell their NFT assets.
Solvent Protocol aims to address these issues and solve these very inefficiencies of illiquidity in NFTs. They are bringing on-chain index funds backed by assets in NFT collections such as CryptoKitties or CryptoPunks. Users can exchange their NFT assets instantly for receiving fungible token derivatives of those NFT projects.
What is Solvent?
Solvent is the first-ever liquidity platform for NFTs built on the Solana blockchain. The team’s vision for Solvent is to introduce optimized liquidity markets to NFT assets to enable better pricing discovery mechanisms and make trading of NFT assets easier and efficient.
With Solvent, users can get instant liquidity for their NFT assets at floor prices. Capital inefficiency and price discovery are two problems that cause illiquidity for NFT assets for users. The platform addresses these issues and enables DeFi services such as borrowing stablecoins, collateralized loans, yield farming, liquidity mining on AMMs (Automated Market Maker) with NFT assets.
The Solvent platform is currently running on the Solana mainnet, and the team has disclosed plans to move cross-chain and onboard NFT projects from other chains such as Ethereum soon in their roadmap. As mentioned in their litepaper, their long-term goal is to…
