TechFlow News — Dave White, a researcher at blockchain investment firm Paradigm, has proposed Floor perps, an NFT derivatives scheme. Floor perps are synthetic NFTs that track the floor price of a given project and are minted by locking that project’s NFTs as collateral.
Floor perps allow NFT holders to gain liquidity and hedge against floor price volatility without relinquishing ownership of their NFTs. They also provide other market participants with leveraged long and short exposure to NFT floor prices.
Regarding Floor perps, Dave White explained: “If you own a rare Ocelot, you could fractionalize it on Fractional. But since all Ocelots trade close to the floor, there may not be much interest. Instead, you can use your Ocelot as collateral to mint and sell OCELOT Floor perps.
You not only gain immediate liquidity but also protection if the floor price drops. If the floor rises, you’ll miss out on some gains, but you’ll still profit if your Ocelot appreciates further. Depending on market conditions, you will either receive or pay funding fees. If you fail to pay funding for an extended period, your Ocelot will be liquidated via auction.”
