Secondary Marketplace

A secondary market dominated by mass resellers using Bots is exactly what this platform seeks to mitigate. However, a secondary market allowing primary consumers to resell goods should be supported. It helps signal value and encourage hype for the Sponsor while the primary consumers of the good receive the most benefit from resale.

DropShop will have an integrated Secondary market to allow for seamless resale of goods won for the duration allowed by the lottery parameters. Winning participants can port their winning NFT directly into the Secondary market. These peer-to-peer marketplaces are well established in the NFT space already and would operate much like Opensea or Rarible. It would allow for fixed price, timed auction or open bidding.

Non-redemption is a problem for Sponsors as they incur holding costs, hence the limits on secondary market duration in the parameters.

NFTs ported directly from the platform will have no service fees as both a reward and incentive for transacting on the platform. The secondary market will be open to import and trade other NFTs, however they will be charged a service fee in the range of 1-5%.

Non-redemption is a problem for Sponsors as they incur holding costs, hence the redemption period parameter which effectively limits secondary market duration. Therefore, an NFT which passed its redemption period could be rejected by the Sponsor after this period, forcing the holder to burn and convert the NFT to its collateral – potentially lower than what was staked.