FALT: Physical Art On-Chain

Project Name : Falt

Project Track : Web3

Team Name : Renaissance Labs

Team Member(s) :
2 Members
boxfox
ovon

DevPost URL :

Project Goal :
We tokenize physical assets on-chain and make them accessible to retail investors.

One of the most interesting use-cases come from setting the tokenized physical asset as a collateral on lending protocols. We can transparently rate the collateral on the market terms and build more liquidity to give a loan against the asset. For example, if I have a Banksy’s Girl With Balloon (estimated value of $100,000) and tokenized / fractionalized it with Renaissance Labs, I have a liquidity source against my asset that wasn’t available or took too long to receive in real life. Bringing assets with real utilities is the next crucial step for crypto, and it started with stable coins to us.

Falt tokenizes physical assets on-chain and make them accessible to retail investors.

One of the most interesting use-cases come from setting the tokenized physical asset as a collateral on lending protocols. We can transparently rate the collateral on the market terms and build more liquidity to give a loan against the asset. For example, if I have a Banksy’s Girl With Balloon (estimated value of $100,000) and tokenized / fractionalized it with Renaissance Labs, I have a liquidity source against my asset that wasn’t available or took too long to receive in real life. Bringing assets with real utilities is the next crucial step for crypto, and it started with stable coins to us.

[What your project is trying to accomplish]
Project Info :
DeFi is mostly stable coins, swaps, lending and derivatives, limited by the number of the building blocks. Real-world asset on-chain increase the number of DeFi lego blocks to grow the market size and the users with higher stability and growth.

The global financial value mostly derives from real world assets. For example, the global real estate market has $360 trillion (https://www.savills.com/impacts/market-trends/the-total-value-of-global-real-estate.html), and gold has $11 trillion market capitalization (https://companiesmarketcap.com/gold/marketcap/). Think about unlocking the values tied with the real world assets on-chain with DeFi incentives. Let’s take USDC for example. The yields from USDC outperformed Aave and Compound in the last year. (https://blockworks.co/what-are-real-world-assets-defis-newest-yield/). Another example would be Synthetix - a dApp that offers on-chain exposure to fiat currency, commodities and stocks through synthetic cryptocurrencies, locking up to $3 billion worth of assets in the protocol at its peak.

Taking this notion further, we believe that tokenizing world-class physical assets can be beneficial for a multitude of reasons.

For the artists:

  1. Lowering the barrier of entry for their artwork whilst expanding their consumer base. Rather than one individual owning a valuable asset, multiple people can have partial ownership of the asset for the portion they own whilst maintaining the integrity of the physical asset and the transaction fees introduce a new income stream for the artist. i.e. people would rather own a piece of the Mona Lisa over another one of Da Vinci’s artwork.
  2. Art in its purest form is subjective and difficult to be made proprietary. The global art market was estimated to be worth around US$405 billion in 2021 and rapidly growing, and with the advance in technology, gives rise for more. intellectual property infringement. (https://aaaipright.com/the-impact-of-intellectual-property-on-the-art-market-in-hong-kong/). However, with the use of blockchain technology, fALT tokens can act as underlying assets - much like financial derivatives - and can also verify the authenticity and ownership of the assets.
  3. fALT can also be gamified through token ownership. Artists can impose certain benefits and perks for holding a minimum threshold of <1 fALT, further increasing the value of their collection.

For the consumers:

  1. Like financial derivatives, fALT will bring a wave of new investors to trade in this new asset class. We have already seen the huge success of $GMX and $SNX on Arbitrum and there’s still plenty room to grow given the size of the current derivatives market. Indices, ETFs and vaults are just a few examples of the benefits of fALTs.
  2. Holding <1 fALT can also give consumers access to utilities that are gated from the public, much like how NFT passes/POAPs/tickets are used today. This design is fluid and dynamic and stems from the original collection instead of launching multiple collections.

Project Website : https://falt.app/

Project Test Instructions :

  1. Press “Launch App” on the top-right
  2. Click on “Eunjin Kim’s Location of God - Crowded (2020)”
  3. Connect wallet
  4. Swap “KGCC” with TRX

Project Details :
Renaissance Labs Pitch Low Quality.pdf (2.7 MB)

Project Milestones :
The following milestones are to distribute ALT in a launch and flywheel the fALT distribution with on-chain governance to select the desired artworks by the community. The following are the tech specs -

ALTToken: ALT Token
fALTToken
wfALTTokenMilestone 1: $ALT and $fALT Launch
fALTSale: Used for the first sales of fALT
ALTDrop: ALT Token air-dropped in accordance to fALT purchase amount
Buyback: Buying back the ALT token at specified price with respective cliff. More details are outlined in the tokenomics.
Vote: On-chain governance on artworks yet to be sourced. If the vote is successful, the voters will receive 10% discount on the offerings.
ALT Airdrop: $ALT will be airdropped to holders and fALT purchasers. The ALT drop amount will increase in respect to the amount of fALTs purchased.
Faucet: Sale of $ALT tokens with price increase cliffs at the number of tokens sold.

Future Milestones:
Lending Protocol
This milestone is where our real plans begin to unveil. The lending facility allows for permission-less lending and debt origination with fALTs and other ERC-20s as collateral assets. The primary goal is to allow anyone to create a market between a pair of ERC-20 tokens. Any token with an oracle data feed can be used as collateral.

  • Lender: Lenders provide asset tokens in exchange for fTokens.
  • Borrower: Borrowers provide fALT or other collateral tokens in exchange to receive Asset Tokens. Borrowing incurs an interest rate which is to be paid to the lenders upon the redemption of fALTs.
  • Oracle: Oracle to calculate the market price for the fALT and asset tokens.
  • Rate Calculator: The contracts give an interest rate based on the amount of available capital to borrow. With less borrowers, the rate will be higher and vice versa.
  • Artwork Pricing Algorithm: We will build a proprietary pricing algorithm for artworks. The algorithms are used to allow the lenders to know which
  • Loan-To-Value: The borrower will have a Loan-To-Vale (LTV) to represent the ratio between the loan and the collateral deposited. The LTV will decide the health range of the borrower’s position.
  • Liquidator: When the borrower’s LTV is beyond the maximum LTV, liquidators can repay the debt for the borrower and receive the collateral with liquidation fees.

Artist Index (fALTI)

This milestone’s objective is to create liquidity for the illiquid artworks by creating indices. fALTI is the liquidity aggregator for the illiquid artworks. It’s pegged to the basket of fALTs to track inflation and price variations of the assets held.

The creators of an artist index has a creator fee in perpetuity to incentivize third-parties to create new indices and receive trading fees by providing liquidity on a DEX. The indices aim to be on-chain value account of the basket of assets held.

  • Artist-based Index: We will create an index token comprised of basket of the artists’ pieces. The creator of the index token will have to burn ALT to create the index and will be receive the origination fee in perpetuity until the community decides otherwise. The liquidity providers are able to accrue the trading fees.
  • Whitelisting for Index: Only whitelisted assets will be able to added on to an index for the fALT. This is to ensure only the relevant assets are held into the index.
  • Asset addition into index: fALTs whitelisted in the index token can be added to the index at anytime. The index grows in value of the fALT added into the index and mints new tokens to the user adding fALT. This allows the fALT owner to obtain instant liquidity through indices and index investors to have a hedging agent when investing into a more liquid basket, while also investing into an illiquid artwork alone.
15 Likes

Nice project. This is going to be a great one. Weldone :+1::+1:

5 Likes

Hey thanks for the kind words. Please check out our dApp at https://falt.app!

2 Likes

We are actively looking for feedbacks to improve our ui/ux
:heart_eyes:

2 Likes

Nice project but is there any limitation to the physical assests?

1 Like

Hola, es una buena inversión a largo plazo, lo que haría que otras personas que no están en el campo criptográfico se unieran mediante las obras de arte,

1 Like

Hey Mattylegend! Thanks for looking over our project.

If I am understanding correctly, we are not only bound to physical artworks, but can be extended to real estate and luxury goods. We also see great use cases with RWA with ReFi, such as tokenized carbon credits. USDC and USDT have paved their way into DeFi for us. We lowering the barrier of entry of RWAs for DeFi users and exanding the consumer base for RWAs, a win-win for all. The most exciting part of this is to gamifying the token ownership to increase the benefits to <1 fALT. Being on Tron makes perfect sense to develop the gamification further.

1 Like

¡Sí! Esa es nuestra visión. Necesitamos incorporar a más usuarios de Web2 para utilizar DeFi sin problemas. Tener tokens planos como garantía en DeFi abre los casos de uso reales para una financiación más abierta y transparente.

1 Like

Hola, me parece genial