A chip is an ERC-1155 token that represents some prediction on an NFT's future valuation. They may exchange hands however, but the main invariant the mechanism maintains is that all chips must be listed at all times. In other words, each chip has a price that anyone can match to acquire it. Additionally, a user may buyout the NFT by acquiring all of its chips.
Each chip contains two pieces of financial metadata that are used to compute its price:
- a predict price: a prediction of the chip's value by some date.
- an expiration date: the date the prediction lasts until.
The chip will be listed at its predict price until its expiration date. After its expiration date passes, a linear Dutch auction down to 0 (the length is determined by the seller when they list the NFT) starts.
Since every chip must be listed at all times, chip traders must provide a predict price and expiration date when they purchase chips. To prevent situations like the monopoly problem (i.e. valued too highly or too far into the future), the protocol imposes a fee based on the parameters. The larger the predict price, the larger the fee; the further away the expiration date, the larger the fee.
Updated about 2 months ago