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Hi I have a question if someone can give me a few indicators it would be great.

I would like to create nft project let's say 1000 collectibles and as a utility I want to reward 20% of the secondary sales from open sea back to the nft owners each month.

The nft owners will be able to claim their accumulated reward tokens through a custom ERC20 token, call it the RewardToken.

Each day the each nft token accumulates 10 RewardToken.

After one month the owner a nft has accumulated 300 RewardToken that he can claim from the RewardToken contract.

Let's say this month the 20% of the royalties is worth 10 eth.

(reward_in_eth / month_days) / nbr_of_nft_tokens

(10 / 30) / 1000 = 0.00033333333 eth

That means that 10 RewardToken is equal to 0.00033333333 eth

So after having accumulated and claimed the 300 RewardToken the nft owner wants to convert is monthly RewardToken to eth (300 * 0.00033333333 = 0.099999999 eth)

How can he do that ? what do I have to put in place ?

Should I create a trading pair on a defi exchange and provide the 10 eth as liquidity ?

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  • I'm curious about that, too
    – zmy
    Aug 11 at 10:16
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What i understand from your question is that you have a fixed supply of RewardTokens (10 *1000 *30 each month) and a variable supply of rewards, so it sounds like funding a LP would be a really bad idea ( first people to claim their dividends would get more). So what id suggest doing is making a contract that you would fund with the rewards, and where people can deposit their RewardTokens for a share of the rewards ( the rewards are the contracts balance in eth, assuming theres 10 eth in it someone who would deposit 1000 tokens for example (thats 1/300 of the supply) would get 1/300 of the contracts balance in return ( thats 10/300 = 0.033... ), then burn the tokens deposited. (btw 300 * 0.00033333333 = 0.1, not 0.09999999.. maths are wierd lol)

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Yes, you will have to add a RewardToken/ETH Liquidity pair on a DEX such as Uniswap for instance.

You can write a Smart Contract that automatically takes 20% of each NFT purchase and the appropriate RewardToken amount and automatically adds liquidity to the Pool.

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  • Thanks @AvocadoChocolate you more question, I didn't plan to have an initial supply, I wanted the supply to be created as time passes with the tokens being accumulated but if I need to provide liquidity I have to create an initial supply, which will be minted to the owner of the contract, does it work like this ?
    – David Dacruz
    Aug 11 at 10:50
  • No, you can have a initial supply of 0 and then with each purchase just mint the amount of reward tokens needed
    – AvocadoChocolate
    Aug 11 at 10:52
  • Ok, I'm still a bit confused, if there's is no RewardToken supply on contract creation; How can I provide liquidity on dex for a pair RewardToken/ETH if there is no RewardToken to start with ?
    – David Dacruz
    Aug 11 at 11:48

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