Cattown is a cat-themed series of NFTs, whose genesis NFT MeowMeow is a collection of 10,000 utility-enabled PFPs.
https://opensea.io/collection/cattown-meowmeow
https://www.premint.xyz/cattown/
NFT liquidity has been a controversial issue in the market for a long time. Each player has different pricing criteria for NFT, and there are variations in the sources of NFT value as well. When NFT players enter a new project, they have to thoroughly research the project’s emphasis, which is time-consuming and easy to make mistakes. The project’s focus and NFT price are the only factors that affect the value measurement standard for NFT. Therefore, the real value of NFT cannot be quantified.
However, there is actually a simple fix for this issue: Value-Added Tax (VAT). VAT is a consumption tax on goods and services that is levied at each stage of the supply chain where value is added, from initial production to the point of sale. The notion of VAT, which is extensively utilized in real life and throughout the world, combines nicely with the gameplay of the NFT since the value is added throughout the circulation, which is taxable, and the value of the NFT is derived from the tax amount. The more circulations there are, the price rises more quickly; the more the VAT reserve, the higher the value.
Therefore, VAT provides a consistent and predictable expectation of the value of NFTs: VAT can measure the genuine worth of NFTs and can be used to support the floor price. However, it is the central authority that actually charge VAT. So in Web3 world, the rule should be changed to NFT holders who are empowered to withdraw VAT. In this regard, Cattown, a new NFT project, innovates on VAT in real life and creates a new concept, NFT VAT. It aims to give NFT participants right to determine value. As a new indicator for NFT valuation, VAT can empower the NFT industry.
How does the NFT VAT on blockchain compare to the real world?
The Cattown team invented the NFT VAT, which is a turnover tax assessed by the NFT based on the volume of transactions as an auxiliary value basis throughout the transaction process. A portion of the copyright tax is delivered to the NFT contract account as VAT at the moment of the NFT transaction, and NFT VAT is connected to NFT tokenID. The NFT VAT is given back to the NFT owner when the NFT is destroyed by the NFT owner. Simply put, NFTs create the VAT reservoir on their own. Every NFTs transfer adds VAT to the reservoir, and the NFTs owner has the option of removing the collected VAT from the reservoir.
Here is an example: Alice buys BAYC#1 on OpenSea for 100ETH and actually she pays 2.5% service fee to OpenSEA, 2.5% copyright tax to BAYC project, and an additional 5% NFT VAT to NFT. In this case, the VAT for BAYC#1 is 5 ETH, and when BAYC#1 has 20 or so transactions, the VAT may add up to more than 100ETH. As a result, BAYC#1’s actual worth will be significantly higher than 100 ETH, and at least 100 ETH.
The example also demonstrates how VAT reflects both rarity and eventual value: the greater an NFT’s average VAT, the rarer it is; the more VAT it accumulates, the higher its value. The average transaction amount of the NFT is equal to the average VAT amount divided by the VAT rate, and the most recent transaction value may be determined using the most recent VAT record. This addresses a problem that NFT players frequently have with pricing and rarity. In NFT leasing, lending, and more widely in economic models for applications like contract derivatives, NFT VAT data can be employed. Currently, these products can only access this data via NFTs using high-latency, weak predictors, which are frequently targeted for attack.
In contrast, NFT VAT can provide the most native and secure on-chain data, so that all the data is true and trustworthy, so that VAT can protect the value of NFT.
NFT value-added tax uses:
Here I propose four of the most innovative things that NFT VAT can bring into the NFT industry:
1. NFT floor price calculation of the on-chain data source
Now some existing NFT liquidity solutions, such as NFT lending products, get floor price from Opensea and give the data to the oracle while get a rough floor price from oracle, which is extremely vulnerable to assault. NFT VAT makes it possible to price each NFT independently while also making it safer and more precise to determine the NFT floor price.
A feasible way to calculate the NFT floor price is:
Average NFT floor price = accumulated VAT for all NFTs/total number of transactions for all NFTs/proportion of VAT
Depending on the NFT rarity, the corresponding NFT VAT is different and can be priced separately. he average VAT/VAT ratio of a single NFT approaches the price of the NFT for more frequent transactions.
For example, the VAT proportion for an NFT project with a 1,000 ETH transaction volume is 5%, so the cumulative VAT amount is 20ETH, and the total number of transactions is 2000. The floor price of the NFT may be calculated with the formula above to be around 0.2 ETH.
The above formula is for reference only. It will be quite fascinating to compute the expected value using various formulas with NFT VAT.
2. Better protect the long-term value of NFTs
There is a trend to hype and buy short-term NFT without considering their long-term value. In order to satisfy users, many projects also pump and dump their NFT prices to attract more customers, so that there are more and more rug incidents that harm the NFT industry. NFT VAT is a test and can tell which is a valuable project. Since the floor price of the NFT never falls below the NFT’s VAT, projects that are truly valued over time and in terms of transaction volume progressively collect more NFT VAT, which definitely supports the project’s worth. It is conceivable that a BAYC with a value of 100 ETH will accumulate VAT of 100ETH for only 20 transactions. Then how much will this BAYC be worth?
3. Improve NFT liquidity
The most important significance of NFT VAT is to increase the liquidity of small and medium-sized projects, projects between blue chip and short-term ones. There are many NFT liquidity solutions available on the market right now, but only a small number of blue-chip projects. The trading volume in these projects, which range in price from 1 to 10 ETH, is what drives the majority of ecosystem innovation, even though the market for these projects is small. They always enjoy an engaged and large community. Through the NFT VAT calculation mechanism, these items can be fully incorporated into current NFT liquidity solutions.
4. NFT VAT has its own liquidity
NFT VAT is usually ETH/WETH or other popular ERC20 tokens, and NFT VAT comes with liquidity as part of the NFT value. With a 1K ETH transaction volume and a 5% VAT, an NFT project can accumulate 50 ETH in VAT. In the past, project or arbitrageurs have taken this wealth away from the NFT project environment rather of reinvesting it. Project now can create composable NFT-Fi ecosystems using this value. A project with a 1,000 ETH transaction volume is hard to prosper, but ten of these projects have a very large power. Through DAO, they can aggregate VAT of 500ETH as DAO funds, to provide users with services like DeFi, NFT-Fi, For example, unsecured lending for NFT Holders, financial contracts, and derivatives transactions, etc.
As the first NFT project who proposes and implements NFT VAT, Cattown is a cat-themed series of NFT, whose genesis NFT MeowMeow’s Mint will now begin on 18 August. The PreMint Whitelist collection is currently underway. Cattown tells a story of the inhabitants of cat planet M617 started to evacuate and eventually traveled tens of thousands of light years to Earth. The sky here was full of gloom and loneliness, which appeared strange to these MeowMeow, so they decided to stay and build their cattown. With the ability to absorb negative emotions, these MeowMeow can emit a sweet atmosphere into the surroundings, making here as lovely as the planet M617.
Attention residents, as long as you meet a certain cat planet condition, you can adopt a small cat that will lift your spirits and keep your surroundings pleasant. Cattown is a fun, open cat universe where MeowMeow owners can build, breed, learn, and invest.
NFT VAT
1. What is NFT VAT?
The NFT VAT(Value-added tax) is a measurement of NFT value, proposed by the Cattown team. The NFT VAT is a turnover tax based on the value added to the NFT as it is transferred.
The Cattown NFTs will charge 10% NFT royalties, with 5% transferred to NFT contract address as NFT VAT. It will be given back to the owner when NFT is destroyed.
2. Why NFT VAT?
NFT VAT is the most intuitive indicator of NFT’s value. The more NFT VAT accumulated, the more valuable the NFT is. NFT VAT can be used as a measurement of the floor price of NFT, which is always higher than NFT VAT to protect the value of NFT. A portion of the NFT VAT will be added to UniSwap liquidity pool in $CAT/$ETH pair to guarantee the liquidity of $CAT.
3. How do I get $CAT tokens?
As Cattown is a community-driven project, 100% $CAT tokens will go to the Cattown community. Participants who mint and trade Cattown NFTs will be immediately rewarded with $CAT tokens.
Disclaimer
The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.
MetaCreat
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