A liquidity pool is a collection of cryptocurrencies locked in a smart contract to facilitate transactions on DEXs.
Bored Ape Yacht Club Liquidity Pool
In the liquidity pool, you deposit your BAYC NFT in return for $BAYC20, an ERC-20 derivative of BAYC. You can then use the tokens to provide liquidy to the BAYC pool through BAYC/ETH Uniswap pool.
NFT20
This NFT Dex uses a permissionless protocol to encourage token supply and provide liquidity for NFT pools. It achieves this by finding the right price for collectors, users, and funds to invest in NFTs, for example, BAYC. Once liquidity is added to Uniswap as BAYC/ETH swap, users can buy and sell BAYC NFTs using ETH, all due to the novel NFT20 protocol.
How Bored Ape Yacht Club Liquidity Pool Works
We are sure that many people keep wondering if NFT pools work the same way as regular crypto coin pools. To help answer this, we will have a look at how the BAYC liquidity pool works.
The pool has two categories of users: regular users, and advanced users.
- Normal users use the easy UI on the BAYC homepage to sell or buy the NFTs using ETH. Regular users are collectors who love art and are enthusiastic about digital NFTs.
- Most of the advanced users are cryptocurrency investors. As an advanced user, you deposit the BAYC NFT into the pool and get 95 BAYC20 tokens in return, which you can use to trade BAYCETH-20 and add liquidity to Uniswap. You can deposit 100 BAYC20 tokens back into the pool, which gets burned to redeem your NFTs. You can also use the BAYC20 tokens for LP Farming.
Selling a Rare BAYC
BAYC allows you to lock common NFTs into a single pool and earn 95 BAYC20 tokens. However, there is a distinction for rare NFTs. You can go to the asset page and create a dutch auction, where you have the freedom to set the value price for the rare BAYC gem.
Redeeming Bored Ape Yatch Club NFT from the Pool
- You can buy the NFT directly from the Pool with Ethereum.
- You can deposit 100 BAYC20 into the pool and redeem your BAYC NFT available in the NFT20 pool.
LP Farming
After the BAYC deposit, you can add liquidity to the BAYC pool using the BAYC20/ ETH pair on UniSwap. After that, stake your LP token in the farm to earn $Muse.
BAYC Token Swap
You can swap your BAYC NFT for another in the pool; the pool allows for this freedom, which is an amazing thing. The only cost you will incur is the gas fees. However, it is essential to note there are no gas fees in providing liquidity, provided you redeem the same NFT token back. Also, 5% of the minted tokens get a direct redistribution to $Muse HODLERs.
Bored Ape Yatch Club Genius
Arbitrage helps create a common NFT floor price for sale on all platforms, whether OpensSea or Uniswap. Therefore, there is no overpriced BAYC NFT. The project is a good investment, Bored Apes Yacht Club is worth every dime.