Breakdown of utility
Here’s how our proposed rug reimbursement will work, chronologically.
First, the 2D Automata collection will mint. Initially these freely-minted NFTs will serve both as cool art pieces and as keys to the presale of the 3D Automata collection. The 3D Automata collection will have 1200 pieces in total, and 600 will be minted at presale. Those who hold FIVE of the 2D Automata will be able to access the presale where they will be at a significantly reduced cost (50% less). The minting and presale of the 3D collection will use MonkeLabs Launchpad.
After all 1200 of the 3D Automata are minted the rug reimbursement program will begin. 30% of the initial mint and 50% of post-mint revenue from this collection will be used to fund the program. Each of the 1200 NFTs from this collection will be allotted a proportional amount of the funds, regardless of rarity or market value.
Other NFT projects that have been rugged (The devs took the money and ran) will be identified and added to a list. Holders of a 3D Automata will be able to send NFTs from rugged projects in and will receive SOL in return, up to the amount they paid to mint the rugged NFT, but only if they are the original minter. Wallets that buy rugged NFT’s from a secondary market will not be reimbursed unless the NFT was minted to that wallet. Reimbursement SOL will come from the allotment of funds attached to each 3D Automata. So, the more 3D Automata you have in your wallet, the faster your SOL reimbursements will come in.
This program will be based on cycles and will also reimburse rugs retroactively. If at the end of a cycle there are unused funds they will be used to deflate the 2D Automata collection. In other words the excess funds will be used to purchase the lowest value 2D Automata from holders and burn them, reducing the supply and increasing the value of the collection. 3D Automata will not accumulate unused allowances, even after the deflation of the 2D Automata has reached a final point. After deflation has completed unused SOL will be pooled into a community fund.
When a rugged NFT is sent in the wallet that minted it will be credited with our SPL token in an amount equal to the SOL mint cost of the NFT. In order to receive reimbursements the SPL tokens will need to end up in a wallet that holds 3D Automata. Each cycle the SOL allotted to the 3D Automata can be redeemed in exchange for an equal amount of our SPL token. When the tokens have all been redeemed the rug will be fully reimbursed for the holder.
A couple examples: Jeremy has four 3D Automata in his wallet in addition to five rugged NFTs that he minted for 0.5 SOL each. He sends the NFTs in to Element Art and his wallet is credited with 2.5 SOL to be reimbursed. At the end of the current cycle the total reimbursement fund has accrued 300 SOL. Each 3D Automata Jeremy owns is allotted 1/1200 of the fund (0.25 SOL). So, Jeremy’s wallet receives a 1 SOL payout (4 x 0.25 SOL) and his wallet reimbursement credit is now 1.5 SOL.
Mikey doesn’t have any rugged NFTs to send in, but he likes the project and loves the art. He has two 3D Automata and ten 2D Automata with another ten 2D Automata for sale on a market. At the end of the same reimbursement cycle his wallet doesn’t receive a payout because it hadn’t sent a rugged NFT nor did it have any existing credit. However, two of his NFTs that were for sale were near the floor and were bought and burned. He netted 1 SOL from the sale and the value of his other NFTs went up at the same time.