Revest Finance offers a protocol for packaging, transferring and storing ERC-20 fungible tokens as non-fungible tokenized financial instruments using the ERC-1155 NFT standard. The resulting financial non-fungible tokens FNFT represent a new asset class in the cryptocurrency ecosystem.
How works Financial NFT
FNFTs are created when a certain number of ERC-20 tokens are placed in the Revest smart vault. The newly created smart vault will only return tokens to participants who fulfill the following two conditions:
- Ownership of the FNFT itself
- Unlocked one of the three possible locking mechanisms (time, value, or address) set on the vault when it was created.
To obtain an underlying value from a smart vault, the FNFT representing the package of that underlying value (200 ERC-20, for example) must be burned and the smart vault's locking mechanism must be satisfied.
For example: If I own three of the eight FNFTs, I am entitled to 600 ERC-20 when the lock attached to that series of FNFTs is unlocked. To give you an example, if that lock was set to unlock in a week, after that week I could trade the FNFT for a Revest Smart Vault to get the base 600 ERC-20.
NB: If the lock is not unlocked, I can't use my existing FNFTs to get base assets.
NB: If I don't have any FNFTs for a given smart vault, I can't get base assets.
Features
- FNFTs are NFTs. FNFTs have all the attributes of typical NFTs and are fully compatible with all markets, wallets and interfaces that support typical ERC-1155s.
- Value in FNFTs is Locked. While FNFTs may be freely transferred between wallets and smart contracts, the value underlying them remains locked in the Revest Smart Vault until the lock is released and the FNFT redeemed. So while the actual FNFT itself may be traded, the transfer will not and cannot directly effect the market value of the assets underlying the FNFT.
- Temporary lock-ins. Traditional vesting structures with a temporary cliff for private round investors. Rather than setting up their own exchange, standardized bundles of value can be bought and sold on NFT marketplaces.
- Extendable Maturity
- Liquidity Pool (LP) Token Vesting. Traditional LP locks don't allow for the acquisition or partial acquisition of rights to the underlying LP tokens. FNFTs allow fractionation of LP tokens without access to the underlying LPs such that the owner can withdraw liquidity from the pool.
- Combination locks occupy an intermediate position between locks based solely on value and locks based solely on time. A combination lock that combines elements of both types can be configured to unlock when both time and value components are satisfied (AND), or when only one of them is satisfied (OR).
- Batch distribution allows you to assign multiple recipients to the FNFT configuration being created. Once batch distribution is enabled, the number of FNFTs created becomes equal to the number of FNFTs per address summed together. Thus, efficient batch distribution of vesting schedules can be performed.
- Multiple deposit transactions are transactions by which an FNFT owner can increase the number of tokens stored in their FNFT. Multi-deposit FNFTs are ideal for situations where a group of people want to raise money, especially if that collection has a time-limited goal. FNFTs in this series remain locked when additional deposits are made. Here are a few uses for it: On-chain crypto raises with automatic distribution along individually fractionalized lines; Charitable events; Endowments; Funds.
- Directed output exists as a function that, when enabled, will perform two functions when the FNFT to which it is assigned is withdrawn. It sends any value within that FNFT to the contract prescribed by the creator of that particular FNFT. To avoid confusion, FNFTs of this type will inform their owner that they will be sending the value to a different address. This allows for the creation of contracts capable of performing complex transactions on the underlying assets after the FNFT is locked when it reaches maturity.
- Non-transferability, if enabled, prevents the FNFT from being transferred to anyone other than the account on which it was minted.
Financial NFT usecases
Value Locks
Value locks are locks that are unlocked when the value of one asset (the primary asset) relative to another (the comparative asset) either rises above or falls below the price selected during the minting process. Both assets are selected by the creator during the minting process, and the creator does not need to own either asset.
Value locks, when they mature, can be unlocked or released. Since all transactions on the blockchain require direct initiation by an individual willing to pay gas for the transaction, FNFTs with a value lock can't automatically unlock. Once a value-locked FNFT has become unlockable, it can become fully locked again if its unlock price moves out of the zone in which the FNFT can become unlocked.
Applications
- Vesting team incentives (key performance indicators or KPIs). Unlocking team tokens can be tied to market capitalization growth to incentivize performance based on project success rather than the passage of time
- Vesting for individual investors
- Price stabilization: value can be automatically locked and unlocked when certain thresholds are reached to selectively exert buying and selling pressure
- Limit-like structures: FNFTs can direct their funds into AMM on withdrawal and automatically convert them into units of another currency.
Address Locks
Essentially, an address lock is a lock that uses an Ethereum address as a trigger to unlock the smart vault to which it is bound. There are two mechanisms by which the address associated with the lock can do this:
- By calling the "unlock" function on the Revest smart contract. This functionality is not limited to wallets. A smart contract can also call the "unlock" function directly from the blockchain on an address lock, allowing for highly versatile systems. This is an alternative approach to the recommended methodology for integrating smart contract with addressable locks.
For example: User A creates an address lock 1 that is associated with 10 FNFTs (of the same series), labeled 'FNFT1', each containing 20 RVSTs, and their unlock address is set to user A's wallet address. User A shares 3 of them with user B, 4 with user C, leaving user A with 3 copies of FNFT1. User A then call the unlock function from the Revest UI, unlocking all FNFTs in the series. Users B and C can now also withdraw funds from the copies of FNFT1 they have received.
- By having the address specified at creation be a smart contract implementing the Revest Address Lock Interface. Through the use of a predefined metadata file, smart contracts of this nature can easily integrate with the Revest minting user interface and collect arbitrary information from any user wishing to create a lock using these generalized systems. The benefits of this system include:
- Fully customizable locks: Locks can be triggered by any set of input data, either on-chain or off-chain, as long as the data enters the chain using oracles.
- Separating the locking mechanism from the value storage reduces the security impact of lock failure and reduces the worst case from theft of locked valuables to early access by authorized parties (FNFT owners only).
- Community sourcing of locks: Locks can be shared by simply inserting the address of an already deployed lock.
- Reusability of locking mechanics: No more reinventing the wheel between DAOs
Financial NFT Price Oracles
To prevent "price hacking" (manipulating price information online, often with flash credits) Revest uses price oracles (Oracles) to measure the value of one asset against another. Revest currently offers oracles based on Chainlink Price Feeds and Uniswap V2 TWAP (Time-Weighted Average Price).
Some oracles (in particular Uniswap v2 TWAP) require updates to ensure correct price measurement. Such updates will require the user to submit an update request via the dashboard, wait for it to be processed, and then submit a withdraw or unlock request. In this case, the user interface will be modified accordingly.
Interface
Using a javascript interface, FNFTs can display up-to-date information about their content and lock status.
The color of the FNFT indicates whether it is locked or unlocked:
- Green means unlocked
- Amber means locked
FNFTs can also be in a state where they are "unlockable" but not "unlocked". This does not happen with time locks, but can happen with the other two options. In this state, you will be able to unlock the FNFT if you own it, unlocking it for everyone else who owns it as well; however, they will still have to unlock it to get the base cost!
Whether the FNFT is unlockable is easily determined by the appearance of the central lock on the FNFT itself.
NFT Locker
By utilizing Revest's FNFT protocol, Revest NFT Locker offers the following features for ERC-721 projects and the communities that form around them:
- Intuitive locks for arbitrary ERC-721s.
- Distribution of arbitrary ERC-20 tokens to any ERC-721 hosted in the Revest NFT Locker
- Ability to view your NFT from within the FNFT itself
- Ability to transfer FNFTs throughout the lockup period without impacting the price of the underlying asset
- Dynamic reward opportunity alerts and easy reward receipt via FNFT
- Secure storage within Revest NFT Locker for the duration of the lockup period
- Customizable lock period for NFT developers
