Introducing TradeStars series: Fractionable Non-Fungible Tokens.

Introducing TradeStars series: Fractionable Non-Fungible Tokens.

The industry lack of innovation in the last few years, the rise of new technologies and the huge potential to develop the Fantasy Sport model outside the today’s traditional dominating markets and sports was the kick of to our idea of changing for good what this industry is about.

Our vision is to provide true Digital Ownership, Transparency, Liquidity and Decentralization to the Fantasy Sports industry, and in this endeavour, bring new ways on which people can communicate and express their passion for sports between each other and with their favourite sports teams and players.

TradeStars’s is based on a few, very new, and interesting concepts in digital economy around Continuous Token Models and Non-fungible Assets (NFTs) that we believe are key in helping us to fulfil our vision.

This article is about the internal features that allowed us to build a game based on the four pillars defined above and its crypto-economy.

Public blockchain infrastructure is well-suited to freely create and exchange unique digital representations of anything in forms of tokens.

After the great success of the fungible ERC-20 standard and the great hype for the ICOs in 2017, several initiatives started working on a new proposal that could represent something unique and scarce on a public digital ledger. This digital asset, a non-fungible asset, univocally owned, non-interchangeable and capable of holding intrinsic value took form with the ERC-721 token standard in the first months of 2018.

A Non-Fungible Token, or NFT, is a special type of cryptographic token which represents something unique, not interchangeable and with verifiable digital scarcity.

So far the use-cases for ERC-721 have mostly been for collectibles games, like CryptoKitties, Gods Unchained, Axie Infinity, and other on-chain assets like for example the Lands’ assets in Decentraland or like in The Sandbox upcoming sale.

Why using the Ethereum Blockchain?

Despite the network congestion and scalability issues Ethereum has been facing momentarily for large scale applications, it has proven to be one of the most successful blockchains released to date. Not only in terms of reliability, but also in the amount and quality of projects building on top of it and its active blockchain community.

The programable blockchain is key to fulfilling our vision of disruption of the Fantasy Sports industry. Transparency, Decentralization, Continuous Liquidity (without having the custody of the users’ funds) and true Digital Ownership is possible through the use of Smart Contracts.

It’s worth noting that we’re working on solving scalability through the use of a PoS second layer solution with our friends at Matic.network, but this is a story for another post.

What seemed the natural next step around the non-fungible tokens was the possibility to be partially owned. This could for example be accomplished by transferring the ownership of the asset to another “manager” Smart Contract that could provide governance for the different owners based on their current holding of shares of the NFT just if they were equity holders of a real world asset.

This is a super interesting pattern, and I believe we will see many implementations of it for sharing the acquisition of NFTs in the future. It would allow people to partially own digital assets whose market price would turn them virtually impossible to be entirely acquired, or maybe just to participate as investors on an expecting future rent, backers of a project, etc.

But our approach to the fractionable non-fungible tokens is first focused on how those NFTs would manage its shares supply. A Continuous Token Model seemed to be ideal for providing Liquidity, and the NFT’s Smart Contract could also control the price and supply of the shares with Transparency, while ensuring the Digital Ownership and having Custody of the users’ funds. All of this in a Decentralized way.

TradeStars implementation is influenced by the ideas behind Bonded Curves and Smart Tokens concept in the Bancor protocol. An excellent post from Simon de la Rouviere details the timeline of how these ideas first appeared.

How these concepts technically works are matter of another post. You can check the TradeStars White Paper to have a more detailed overview meanwhile.

In Fantasy Sports’ games the scores are generally based on athletes’ real-life performance statistics, and by combining Decentralized off-chain data with an on-chain NFT registry it is possible to tokenize those public sports performances data sets. “Tokenizing” is the act of creating a unique, tradable, trackable representation of the real world asset on a public ledger.

Our implementation of Fractionable NFTs allows then to represent each athlete’s public performance statistic to be represented through a digital asset with the unique capability to issue fractions of itself.

In the next posts we share more ideas on how we are building a new kind of Fantasy Sports and the crypto-economic ideas this amazing technology enables us to create.

TradeStars is a Fantasy Sports platform powered by the Ethereum Blockchain where users can own, create and trade digital assets that represent real-life sport performances. A new way in which people can express their passion for sports, compete against each other, and show “How much their sport knowledge worth”

Published at Sun, 01 Dec 2019 04:58:46 +0000

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