Pricing NFTs for Buyouts
When a buyer purchases an NFT listed on the protocol (i.e. acquires all chips).
Recall that every chip is listed at all times, and acquiring all of them allows a user to exchange them for the NFT. Thus, the valuation of some listed NFT is the sum of all of its chips' prices.
One big reason for this design choice is the elimination of governance to achieve price consensus. Submitting proposals, considering them, and submitting votes is a slow and arduous task. Protocols with governing systems that require constant attention (i.e. frequent proposals) and input from users to reach any list price have proven to be quite ineffective (users often become inactive → no price attached to the NFT → buyout can not happen). With this mechanism, there is always a price attached, and incoming chip traders predictions are immediately reflected.
Updated 5 months ago