Here’s How PandaDAO, is witnessing the birth of a new generation of community NFTs
The NFT scene has hit a lot of turbulence after a couple of years of explosive growth and stunning success stories. Recently, there have been some shocking stories about investors who paid large sums for NFTs only to watch in horror as the value plummeted to zero. The issues that the NFT space is facing are similar to those that the crypto sector is facing. Success stories like BAYC, in particular, fueled the rapid formation of countless new NFT communities and projects. Some of these were set up in haste and lacked a sustainable liquidity model. Others were just rug pulls. Aside from the tragedy of ordinary people’s financial losses as a result of their trust in NFTs, these types of failures and scams have the potential to cause irreparable long-term damage to the sector. According to one recent survey, public perceptions of whether NFTs are a good investment are declining. Given that NFTs are currently held by a small percentage of the general public, this is a bad sign for the sector’s growth prospects.
NFTs will only thrive in the long run if people have faith in the communities that issue and trade them. This means that future NFT projects will require a technical and financial architecture that protects NFTs from value collapses. There are indications that a new generation of community NFT projects is being built with this principle in mind. PandaDAO Random Panda Club (RPC) NFTs are one of these. The Pandaverse as a whole is working on a variety of products and services, with an emphasis on developing rich NFT-grounded creative intellectual property.
The founding principle for new community NFT projects is code is the law.
The code that PandaDAO is implementing for the collection’s launch and future trading is what distinguishes RPC NFTs. The PandaDAO team fully supports the philosophy of “code is law,” and they have used it to develop ERC721P, a swap protocol that will protect users’ investments and community liquidity by giving NFTs intrinsic value.
Fairness and value are protected through swaps and rebirths.
More information about the project’s technical dimensions can be found here and here. The Swap and Reborn contracts are the two features of the project protocol that are most likely to pique the interest of NFT collectors. The Swap contract is all about being fair. Each RPC NFT minted will be anchored to 50,000 $PANDA under the protocol. Anyone with an NFT can exchange it for 50,000 $PANDA on the community’s decentralized exchange. The protocol ensures that the NFTs users issued during swap transactions are entirely random – and it has been designed to prevent bad actors from gaining unfair access to the rarest NFTs during the minting process.
The PandaDAO community will repurchase $PANDA tokens at a fixed price of $0.005 per $PANDA. This means that each RPC NFT will always have a minimum value of $250. The system is clever in that it guarantees the value of the NFTs while also allowing for plenty of arbitrage between the community’s decentralized exchange and sites like OpenSea, encouraging appreciation in the market prices of the NFTs.
The Reborn contract, on the other hand, allows users to exchange one NFT for another in the community pool. The code ensures that the new NFT issued to the user in exchange for the old one is completely random: users may or may not receive a rarer NFT. The feature is intended to allow users who own non-rare NFTs or NFTs they’ve grown tired of to maintain a meaningful stake in the community. It also prevents the value of unwanted NFTs from falling. Interestingly, PandaDAO intends to include NFTs from other projects (for example, BAYC and Doodles) in the pool of NFTs for random 1:1 exchange. Swap and Reborn contracts include a handling fee of 7.5% of the NFTs anchor price to ensure the project’s liquidity remains strong. Half of that goes toward increasing the NFT’s anchor price, while the other half goes to the community treasury.
These two central features of ERC721P have the potential to address major issues that have plagued some community NFT projects in the past, including poor liquidity caused by drops in floor price, bad actors gaming the minting system, and user frustration and/or dumping caused by having to hold non-rare NFTs or ones that have lost their aesthetic value to the user. It will be fascinating to see how the RPC project develops over the next few years. If ERC721P addresses the issues that have plagued some recent NFT projects, we may have a viable model for a new generation of community-led NFTs.