NFT Pot of Gold: Honey Lab’s upcoming Defi merged NFT project
Honey Labs upcoming NFT launch is a sleeping giant in the Solana NFT ecosystem with huge potential and utility.
Dropping Q1 2022:
10K NFTs / IDO — $HONEY token / NFT Liquidity Solutions
Merging DeFi protocols and NFTs, Honey Finance is opening up a variety of different financial use cases for NFT users. Providing liquidity solutions like collateralized lending, borrowing, staking and yield farming all in one place with the use of native protocol token $HONEY. And this is just the beginning of what’s to come. NFTs will push the limits of what financial services of DeFi can offer, and Honey is at the forefront of developing these new use cases. Honey aims to create a new kind of NFT, adding new functionalities in the ecosystem. The use case within DeFi is explained more in depth in their 📑whitepaper.
There are two different kinds of liquidity solutions on Honey: borrowing with NFT collateral and NFT farming.
borrow, lend, stake, earn, maintain ownership
Honey’s native NFTs will launch with 6666 NFTs available for mint. Specific details have yet to be announced, but it has been confirmed it will happen sometime in Q1 2022. For a project geared around DeFi utility and use cases the art is actually quite incredible.
The story behind the project is perfect. An ode to the well structured organization of bees. Who all work together to help pollinate and build their hive. A worthy metaphor of what our financial system ought to be: a community of developers and holders, working together to build a strong ecosystem in which profits are redistributed. Creating an intuitive experience with self explanatory features, such as locking $HONEY in honey combs, or bees yielding $HONEY. With a top teir doxxed team and amazing user interface. Check it out for yourself → https://app.honey.finance/
Holders of the naive NFT will be able to stake on platform to earn $HONEY tokens, which will also serve as governance token, currency of platform, or can be exchanged on DEX for SOL and USDC. Native farming through staking will serve as the primary liquidity mining tool. $HONEY token will be minted to those staking in the pool at a fixed rate (yet to be disclosed). Additionally, all royalties from the sales of NFT collection, as well a part of the fees generated by the protocol, will be distributed to those who stake in the native farm.
Honey’s protocol connects lenders, borrowers, and liquidators in a peer-to-contract protocol.
You have probably already seen $HONEY around already. This is because Honey has partnered with over 30+ different DAO NFT projects with more to come, giving holders of these collections exclusive access to stake their NFTs and earn yield of $PHONEY (pre IDO token, which can later be swapped for $HONEY. Most likely at 1:1 rate) on their platform. This initiative not only adds liquidity to DAOS benefiting holders (incentivizing holding), but also helps fortify the decentralization of the protocol by widely distributing tokens throughout the ecosystem. Working as an in-house marketing tool at the same time. Strengthening the overall Sol ecosystem.
The team has also enacted a smart contract that mirrors the NFT staked, so users can still view their NFT in wallet even when it’s staked on platform farming for tokens. This is huge!
While not all details have been released yet on the exact supply of $HONEY, the IDO is set to happen sometime in Q1 2022. Stay on the lookout from the team to drop more details in the months to come. Distribution of tokens might look something like this:
- 7% IDO
- 55% DAO Treasury (insurance fund, contributor/grant fund, Honey foundation fund)
- 22% to the team
- 16% liquidity emissions (through mining or bond issuance)
10% of money raised at IDO will be allocated to $phoney holders. Money from mint will go towards funding insurance fund, foundation, and contributors.
Pools will be available for users to access or discover in the Pool page of our dapp. If you hold NFTs compatible with one of the pools, you will be able to stake them. You still keep 100% custody of the NFT. A smart contract will store your NFT in its own vault. The rewards are sent to this vault, and can be claimed at any time. Upon claiming the rewards, the protocol will collect a 3% fee.
Another liquidity solution is NFT farming. To mint the native token $HONEY, you will need to stake NFTs into farms on platform, this is available to more than just Honey NFT holders. There are three kinds of farms: native farms, collection farms, and zombie farms.
Native farm: serve as the primary liquidity mining tool for our native NFTs. Likely will yield the most as well. Only native Honey NFTs to be staked. $HONEY token will be minted to those staking in the pool at a fixed rate. Additionally, all royalties from our own NFT collections, as well a part of the fees generated by the protocol, will be distributed to those who stake in the native farm.
Collection farms: NFTs from various verified collections can be staked to mint liquidity for our token. The DAO approves and voted on which collections to include. $HONEY token will be minted to those staking in the pool at a variable rate, for a shorter amount of time.
Zombie farms: NFTs from hard rugged collections can be staked in return for $HONEY. The mint rate is lower than the other two farms, however it usually assumes the minting price of the NFT at the time of mint and/or presale. The rewards from these pools are subject to a 4-month vesting period. After 1 month, users will be allowed to withdraw $HONEY rewards, and will thereafter be able to withdraw on a bi-weekly schedule.
3 different variables to yield farming, to accurately reflect yields produced to value that is being staked.
Floor price, # of nfts in collection, % of collection staked
Floor price will play role in determine value of NFTs staked (market cap). A SMB would earn more than a Pesky Penguin for instance due to variance in values and FP. How many NFTs are in the collection will also be a function of amount of $honey earned. And lastly, the more participants in a collection staking their NFTs, the higher the yield. This incentivizes collection holders to have as many people stake as possible. WAGMI
- $HONEY : The native asset of the protocol, will have an IDO in Q1 of 2022 and will serve as the governance token, as well as liquidity incentive.
- $HONEY can be staked in pools to receive fees generated by the protocol. You can stake $HONEY to allocate votes to the different proposals in DAO.
Borrowing with NFT as collateral will work with a number of verified NFT collections. Solving the opportunity cost problem of holding illiquid NFTs longterm. Allowing users to still hold, while utilizing the assets value. The anticipated initial Loan-to-Value ratio will be 50%, so if your NFT belongs to a collection whose floor price sits at $1000, you will unlock $500 of liquidity simply by placing the NFT in escrow.
Lenders can deposit SOL in return for an APR, which is revenue generated by borrowers. This revenue is generated when A) borrowers pay back interest on their loan or B) borrowers are liquidated. This APR received by lenders is thus variable, and depends on the utilization ratio of the protocol and the default rate of borrowers (more details in whitepaper).
With our liquidity solution, NFTs will serve as a layer of liquidity on top of the existing DeFi protocols to offer the variety of financial services.
Holders can now prosper financially without having to sell their NFTs. Liquidity solutions such as staking farms allow $HONEY to be earned as a passive income. Their great power in being able to unlock the liquidity of an your NFTs by placing them as collateral. Offering people different yield strategies to earn liquidity, from NFTs while still having ownership. Generating yields, that otherwise would just be sitting dormant in wallet.
Once exact token data and IDO info is released, I wouldn’t be surprised to see passive income opportunity similar to what we have seen with Genesys Go or YAWW’s NFTs. Where the true value of Honey NFT could be upwards of 50SOL+ based on $HONEY yield fundamentals and utility offered.
A successful product in DeFi, is one that can be used as a building block for a system greater than itself, and it must present a utility to other protocols while allowing developers to build on top of it. Honey is positioned with a foundational layer that will allow for new ideas to be built upon and expanded. With the same technology behind NFT loans, Honey has been able to create a decentralized exchange for all NFTs within the metaverse. No more peer to peer trading, NFTs need to be fully liquid to break down barriers to entry in the non-fungible space. I believe what we see now is just a drop of the bucket of what is still to come with Honey.
DeFi + NFTs = creating a whole new layer of liquidity for DeFi
“Nobody is doing what we’re doing, and we’re prepared to shock everyone in the coming months.” — @tomjpandolfi
Special shout out to the Honey Labs team @tomjpandolfi, @DariusFoodee, i@0xPedr0. Please check out their Twitter @honeydefi and Discord for more information and to stay up-to-date with latest announcements.