Protocol Layer
Last updated
Last updated
ERC-7527, also known as the Token-Bound Function Oracle Automated Market Maker (FOAMM), is a protocol designed to enhance the NFT ecosystem through a trustless framework. It aims to address key challenges by introducing innovative components and mechanisms.
Key Components of ERC-7527
Proxy and Application Contracts: ERC-7527 employs a structure comprising distinct proxy and application contracts. The proxy is responsible for asset management and minting NFTs upon receiving fungible tokens, while the application contract handles NFT operations such as minting and burning.
Factory Interface: This interface enables the deployment of new proxy and application contracts using user-defined settings. The modular approach facilitates the creation of customized NFT minting and management solutions tailored to specific requirements.
Wrap and Unwrap Functions: These functions form the core of interacting with NFTs under this protocol. Wrapping involves depositing fungible tokens and receiving an NFT, while unwrapping allows users to redeem their NFT for the original fungible tokens or other tokens, based on the current valuation provided by the oracle.
Oracle Integration: The protocol integrates a price oracle to determine the current value of the NFT during wrapping or unwrapping. This ensures that transactions reflect real-time market conditions.
Customizable Parameters: Users have the flexibility to set various parameters, such as fee percentages, initial pricing, and the type of currency used. This customization enables fine-tuning of smart contract deployments to meet specific economic models envisioned by users.
Implementation and Use Cases
The implementation of ERC-7527 leverages advanced Ethereum functionalities, such as immutable parameters and smart contracts, to ensure secure and verifiable transactions. The protocol not only facilitates smoother NFT market operations but also supports complex use cases, such as dynamic pricing models for NFTs, which are crucial for artists and creators in the digital economy.
Challenges and Innovations
The primary challenge addressed by ERC-7527 is the lack of liquidity and flexible pricing mechanisms in the NFT market. By utilizing function oracles and automated market-making strategies, the protocol provides a solution that adapts to varying market conditions, thereby enhancing overall efficiency in NFT trading.
Explaining the ERC-7527 Protocol with a Practical Example
Scenario Setting Imagine a digital art marketplace where artists want to sell their artwork by converting them into non-fungible tokens (NFTs). To simplify the trading process and enhance liquidity, the marketplace decides to implement the ERC-7527 protocol to achieve automated NFT pricing and trading.
Application of ERC-7527
Creating Proxy and Application Contracts: Marketplace developers first deploy two smart contracts: a proxy contract and an application contract.
The proxy contract handles the assets (i.e., the artists' artworks) and facilitates the minting and burning of NFTs.
The application contract manages the specific NFT content, including the logic for minting and burning.
Configuration and Deployment: Developers use the ERC-7527 Factory interface to configure specific parameters for these contracts, such as the type of currency (e.g., ETH) used for purchasing NFTs, transaction fee rates, and more. Once configured, the proxy and application contracts are deployed on the blockchain through the factory contract.
Transaction Process – Wrapping and Unwrapping:
Wrapping: When a buyer decides to purchase an NFT representing an artwork, they send an equivalent amount of ETH (or another cryptocurrency) to the proxy contract. According to the ERC-7527 protocol, upon receiving the funds, the proxy contract calls the application contract to mint a new NFT representing the ownership of the artwork.
Unwrapping: If an NFT holder decides to sell their NFT, they can initiate an unwrapping operation. During this process, the NFT is burned, and the initially paid ETH (minus transaction fees) is returned to the user.
Pricing Mechanism: The price oracle integrated within the proxy contract retrieves real-time market values during the wrapping and unwrapping processes. This ensures that transaction prices consistently reflect current market conditions.
The advantage of using the ERC-7527 protocol is that it provides a standardized method for handling the minting and destruction of NFTs, while also automatically adjusting prices through oracle integration, thereby improving market liquidity and efficiency.
Through this example, we can see how ERC-7527 supports complex transactions and asset management, making applications such as digital art markets more efficient and user-friendly.
The SMT 80/20 Revenue Sharing Protocol establishes a standardized method for automatic revenue distribution within the SmartMall token ecosystem, utilizing a fixed 80/20 split mechanism. This protocol ensures that token holders receive rewards for their participation and investment, while also supporting liquidity and the ongoing operation of the platform.
Token Holder: An entity or individual that holds SMT within a blockchain address.
Revenue: All financial returns generated from operations involving SMT.
Primary Distribution (80%): Eighty percent (80%) of all revenue generated from SMT transactions is directly allocated to token holders’ blockchain addresses, in proportion to the amount of tokens they hold.
Liquidity Provision (20%): Twenty percent (20%) of the revenue is allocated to enhance liquidity provisioning, directly supporting the platform's operational stability and promoting further market trading.
Smart Contract Execution: Revenue distribution is managed and executed by immutable smart contracts deployed on the Polygon network. These contracts automatically carry out distributions according to predefined rules, without the need for manual intervention.
Transparency and Auditability: All transactions and distributions executed under this protocol are recorded on the blockchain, providing complete transparency and enabling independent audits.
Adjustments and Modifications: Any changes to the protocol parameters or underlying mechanisms must be agreed upon through governance voting among SMT holders.
Smart Contract Deployment: The protocol requires the deployment of specific smart contract code that complies with this specification on the primary blockchain network used for SMT.
Compatibility: The protocol must maintain backward compatibility with the ERC-20 standard to ensure seamless integration and functionality across different platforms and exchanges.
Scalability and Upgradability: The protocol is designed with scalability in mind and considers potential future upgrades required during the platform's development and expansion. These upgrades will be implemented in accordance with the governance framework established for SMT.
The protocol aims to incentivize community participation in the SmartMall ecosystem by ensuring a fair and automated distribution of generated revenue, fostering trust and engagement among stakeholders.
The SMT Dynamic Minting Protocol establishes a scalable and adaptive minting mechanism for SmartMall tokens (SMT) based on market conditions and token supply. The protocol is designed to stabilize token value and incentivize ecosystem participation by utilizing a variable minting rate ranging from 10:1 to 1000:1.
GUP (Gateway Utility Token): The precursor asset or token used for minting SMT.
Minting Rate: The conversion ratio of GUP to SMT.
Market Conditions: Real-time economic factors affecting the minting rate, including liquidity, token demand, and macroeconomic indicators.
Initial Exchange Rate: The initial minting rate is set at 1 SMT for every 10 GUP, providing a low entry threshold to encourage early adoption and participation.
Variable Rate Adjustment: The minting rate is dynamically adjusted between 10:1 and 1000:1 based on the total amount of GUP burned during minting and predefined market conditions.
Exchange Rate Adjustment Algorithm: The algorithm utilizes real-time data from internal metrics and external oracles to adjust the minting rate. With every one million GUP burned, the minting difficulty increases, gradually shifting the rate from 10:1 toward a maximum of 1000:1.
Contract Deployment: The dynamic minting protocol is implemented through specifically coded smart contracts deployed on the Polygon blockchain network, which handle rate adjustments and minting operations.
Automatic Execution: Minting transactions are processed automatically by smart contracts without manual intervention, ensuring efficiency and adherence to the protocol specifications.
Blockchain Records: All minting operations and rate adjustments are recorded on the blockchain, ensuring transparency and providing a verifiable audit trail.
Public Audits: Third-party auditors conduct regular audits to ensure the integrity and accuracy of the minting process and rate adjustments.
Protocol Amendments: Any changes to the minting rate algorithm or key protocol parameters can only be made through governance voting by SMT holders, ensuring that adjustments are democratically determined and reflect community interests.
Governance Participation: All SMT holders are eligible to participate in governance decisions, promoting an inclusive and decentralized decision-making process.
Supply Stability: Adjusting the minting rate based on comprehensive market analysis and real-time data helps stabilize the SMT supply.
Incentive Alignment: By adapting the economic model to current market conditions, the protocol aligns incentives for all stakeholders, encouraging long-term participation and investment in the ecosystem.
The protocol aims to provide a structured, adjustable approach to SMT minting, promoting stability and growth of the SmartMall ecosystem through responsive and strategic token supply management.
Cryptographic technology is rapidly transforming the world, especially in the fields of NFT collectibles and blockchain gaming, attracting a vast pool of potential users. New types of social media and user relationship networks in Web3 bring extensive opportunities to the crypto space. The SMARTMALL Social Graph Protocol (SSGP) is designed to connect users' social relationships in a decentralized manner, using NFT technology for user binding and identity verification to ensure data security and privacy.
Decentralized Identity Verification (DID)
NFT-based Identity: Ensures the uniqueness and immutability of user identities.
On-chain Verification: Leverages blockchain technology to prevent identity fraud and tampering.
Social Interactions
NFT-based Relationships: Users establish and manage social relationships through NFTs, including transactions, voting, and interactions.
Unique Social Connections: Each NFT represents a unique social connection, recording user activities.
Data Sharing and Tokenization
Shared Data: Social network data is stored in a decentralized manner.
Tokenization: By tokenizing social interactions, users can grow their social capital and network scale.
Data Storage
Distributed Storage: Technologies like IPFS and Arweave are used to ensure data security and reliability.
User Control: Users can access and manage their data at any time, maintaining full ownership.
Cross-Platform Migration
Seamless Migration: Facilitates the transfer and interoperability of social data across different platforms.
Consistent Relationships: Maintains the integrity of user social relationships and data across platforms.
DAO Governance
User Participation: Users participate in protocol governance through a DAO, proposing and voting on key upgrades and modifications.
Token Holder Rights: Token holders enjoy profit-sharing and decision-making rights.
Data Sharing and Tokenization
Shared Data: Social graph data is stored in a decentralized way, ensuring transparency and security.
Tokenization: Users' social interactions are tokenized through NFTs, enhancing their social capital.
NFT-based Relationships
NFT Binding: Users bind their social relationships through NFTs, with each NFT recording specific interactions such as follows, likes, and shares.
Social Graph: These NFTs form the user's social graph, reflecting their network on the platform.
Recording and Managing User Interactions
Behavior Recording: Every user interaction (e.g., transactions, voting, interactions) generates a corresponding NFT, recorded on the blockchain.
Marketplace Trading: These NFTs can be traded on the marketplace, forming a user’s social capital.
Modular Business Logic
Modular Interactions: Social interaction logic (e.g., transactions, voting, interactions) is modularized, allowing developers to customize implementations such as paid subscriptions, DAO governance, and various interaction logics.
SMARTMALL Web App Features
Integrated Functionality: The SMARTMALL web application offers a user-friendly interface that supports decentralized identity verification, NFT management, and social interactions.
Data Sharing: Users can view and manage their social graphs through the app and participate in decentralized social interactions.
Integration with ENS and NFT Marketplaces
ENS Integration: Users can bind their identity and NFTs using the ENS domain name system, enhancing the convenience and security of identity verification. (Not yet available)
NFT Marketplace Integration: Integration with major NFT marketplaces supports users in trading their social NFTs, thereby expanding their social network and capital.
SmartMall social graph protocol enables platform users to interact and trade in a decentralized, transparent and secure environment, and enjoy a new social experience brought by Web3. It not only enhances user privacy and data ownership, but also provides a wide range of application scenarios and opportunities for social interaction in the crypto world.
