Design Motivation & Technical Solutions
Liquidity is a significant challenge in decentralized systems, especially for unique or infrequently traded tokens like NFTs. A decrease in the buyer pool often has a substantial impact on the trading volume and liquidity of such assets. Additionally, price discovery driven solely by supply and demand, combined with market volatility, often becomes a disadvantage for such projects and assets.
To provide effective solutions, it is essential to prioritize the inherent intrinsic value of these assets. The design of CVT and HVT is aimed at carrying and generating value, offering high-quality yield strategies for holders while providing strong minting incentives for participants.
The overall architecture of SOEX fully integrates these two innovative assets, aiming to create a balanced and sustainable system.
What is CVT? — CVT is the "next-generation NFT." It is an on-chain community credential with multiple functional characteristics (SNS, SBT, TVL), serving as a value-added asset capable of creating on-chain communities and expanding social network relationships. In this system, community leaders can invite users to mint HVT and unlock more opportunities for earning rewards.
In short, CVT breakthroughly transforms social network relationships into a revenue-generating mechanism. CVT minters not only receive $SOEX token incentives (20% of the $SOEX tokens generated simultaneously during the minting of CVT will be rewarded to the minter) but also earn a certain percentage of revenue from fees generated by following/unfollowing. Additionally, CVT minters are granted the right to receive staking rewards within the on-chain community and enjoy enhanced benefits on the SOEX platform.
What is HVT? — HVT is the second core component of this innovative system, providing users with staking rewards and enabling immediate earnings as the value of HVT appreciates. More importantly, HVT will soon support lending functions and liquidity provision, allowing users to maximize their earnings through this strategy.
HVT supports personalized deployment such as price customization and token selection. When it is deployed using $SOL or $SOEX for minting, HVT holders are eligible to participate in the distribution of 30% of the $SOEX staking rewards. Furthermore, HVT has significant appreciation potential; as its minting volume increases, its price will rise accordingly, allowing holders to directly recoup their investment and capture the appreciation of its value (current price minus a 5% fee).
Additionally, HVT introduces an innovative liquidity solution. When users mint HVT, its value is securely locked in a smart contract. Later, if users wish to reclaim that value, they simply need to burn HVT.
Through this mechanism, NFT liquidity can be achieved without relying on external liquidity providers. It allows users to freely mint assets tied to their value and reclaim that value through burning, thus creating a liquidity system that operates independently of external resources and is self-sustaining.
Results and Application Scenarios
SOEX, through the innovative design of the CVT and HVT mechanisms, has effectively established a thriving ecosystem that not only enhances community value but also boosts liquidity on decentralized platforms. By leveraging the intrinsic value of social networks, SOEX assigns real value to all users who establish meaningful connections while customizing diverse incentive mechanisms for them.
Key outcomes include:
- Enhanced Community Earnings: Through diversified revenue channels, both community creators and followers can benefit.
- Increased Liquidity: CVT holders drive overall liquidity on the SOEX platform by minting HVT, while HVT holders can borrow stablecoins by collateralizing HVT value and become liquidity providers (LPs), further enhancing market liquidity.
- Incentivized Participation: The dual reward mechanism of CVT and HVT minting promotes community engagement and activity.
- Value in Social Connections: Economic incentives strengthen the connections and interactions between communities.
- Long-term Value Creation: By combining social participation and intrinsic value generation, SOEX is committed to building a sustainable ecosystem that continuously enhances liquidity. The interaction between CVT and HVT ensures that as the community grows, the platform's liquidity and the overall valuation of the involved assets will also increase.
Currently, SOEX has opened a Beta incentive test network. Interested users can participate through the following link to receive generous rewards:
https://betatestnet.soex.io/#/pre-mint
Further Innovative Progress
The SOEX protocol empowers the NFT space further by creating an optimized environment for more efficient minting of various NFTs. This strategy is based on a set of smart contracts that utilize OAMM (Oracle Automated Market Maker) functionality to execute the minting and burning of NFTs through dynamic price adjustments. This approach enables NFT circulation without relying on external liquidity providers. This automated pricing solution aims to stabilize NFT liquidity through a transparent smart contract mechanism.
SOEX's smart contracts offer two core innovations:
- Automatic Price Discovery
In transactions under the OAMM (Oracle Automated Market Maker) mechanism, matching counterparties is not required. The OAMM function automatically provides oracle-based prices according to predefined functions.
- Liquidity Enhancement
In traditional decentralized exchange (DEX) models, liquidity is provided by external liquidity providers (LPs) who deposit tokens into liquidity pools to facilitate trading. However, when liquidity providers (LPs) withdraw or exit, it directly affects market liquidity, leading to significant volatility.
In contrast, the OAMM functionality manages liquidity internally. It replenishes and maintains liquidity through continuous interaction from participants, reducing reliance on external LPs and mitigating the volatility risk caused by their sudden exit.
SOEX's open-source automatic price discovery and liquidity enhancement protocol will standardize the simplified path for NFT minting and address the challenges of decentralized liquidity and price discovery.
Conclusion
Quantifying the value of social relationships is an effective way to enhance liquidity, applicable not only to NFTs but also to general platforms. Through the innovative CVT mechanism and its associated ecosystem, SOEX advances the concept of NFTs, providing communities with numerous opportunities to increase revenue while also offering community leaders the motivation to maintain member loyalty and activity.
Through these mechanisms, SOEX's technical blueprint demonstrates a powerful solution that can enhance liquidity while supporting genuine social interactions within decentralized communities, setting a new standard for Web3 social trading.
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