DN404 Mechanics

DN404 is a smart contract implementation to solve NFT fractionalization/liquidity/fungibility, linking ERC 20 tokens with ERC 721 NFTs.

Xtremeverse NFTs are linked to $XTREME tokens.

1 $XTREME token is linked to 1 NFT.

Minting

  • Each minting wallet gets 1 $XTREME for every Xtremeverse NFT.

    • Example: Mint 2 NFTs, get 2 NFTs + 2 $XTREME tokens.

NFT trading

  • For every NFT transferred, the sender wallet $XTREME balance reduces by 1 and receiver $XTREME balance increases by 1.

    • Example 1: 4.3 $XTREME balance wallet sends 1 NFT to 0 $XTREME wallet, sender wallet $XTREME balance updates to 3.3, receiver wallet $XTREME balance updates to 1.

    • Example 2: 4.3 $XTREME balance wallet sends 2 NFTs to 0 $XTREME wallet, sender wallet $XTREME balance updates to 2.3, receiver wallet $XTREME balance updates to 2.

Token swap/trading

Sender wallet: $XTREME balance reduces by the transfer amount.

  1. If the whole number part of the token balance reduces, then 1 NFT is burned for every whole number reduction. The NFTs are burned in a last in first out (LIFO) order, i.e the last NFT assigned to the wallet is burned first.

    1. Example 1: 4.3 $XTREME balance wallet sends 0.5 $XTREME, the balance will update to 3.8 $XTREME, and 1 NFT will be burned.

    2. Example 2: 4.3 $XTREME balance sends 1.5 $XTREME; the balance will update to 2.8 $XTREME, and 2 NFTs will be burned.

  2. If the whole number part of the token balance does not reduce, then there is no change in NFT ownership of sender wallet.

    1. Example: 4.3 $XTREME balance wallet sends 0.3 $XTREME, the balance will update to 4 $XTREME, and no NFT will be burned.

Receiver wallet: $XTREME balance increases by the transfer amount.

  1. If the whole number part of the token balance increases, then 1 NFT is minted to the receiver wallet for every whole number increment. The NFTs are minted in a last in first out (LIFO) order, i.e the last burned or to be burned NFT is minted first.

    1. Example: 0 $XTREME balance wallet receives 1.2 $XTREME, the balance will update to 1.2 $XTREME, and 1 NFT will be minted.

    2. Example: 0.5 $XTREME balance wallet receives 1.7 $XTREME, the balance will update to 2.2 $XTREME, and 2 NFTs will be minted.

  2. If the whole number part of the token balance does not increase, then there is no change in NFT ownership of receiver wallet.

    1. Example: 0 $XTREME balance wallet receives 0.9 $XTREME, the balance will update to 0.9 $XTREME, and no NFT will be minted.

    2. Example: 1.5 $XTREME balance wallet receives 0.2 $XTREME, the balance will update to 1.7 $XTREME, and no NFT will be minted.

Check out which NFT will be minted from burn stack next here:

FAQs:

Q1. How do traits change when NFTs are burned or minted?

A1. There is no change in traits of burned or minted NFTs. Traits associated with any NFT ID will remain the same. Example, If NFT #1233 rarity trait is "Epic", it will remain the same for all #1233 burned or minted NFTs.

Q2. If I want to transfer tokens, but do not want to lose my NFT, what should I do?

A2. You can transfer your NFT to another wallet, and then do the token transfer.

Q3. Is there a chance of getting Legendary NFT when, say, buying tokens from DEX or CEX?

A3. Yes

Q4.

What is User C's NFT's rarity?

  • User A: 1.4 $XTREME, NFT #1001 rarity: Common

  • User B: 1.4 $XTREME, NFT #501 rarity: Legendary

  • Both deposit 0.7 $XTREME into a (fresh) LP (User A first then User B)

  • User C: Swaps ETH for 1$XTREME token from the pool

A4. User C will get the most recently burned NFT in the overall burned NFTs stack. Doesn't matter where they get the $XTREME from. If User B's NFT is the most recently burnt NFT in all of Xtremeverse, then User C will get User B's NFT. If some other User X's NFT is the latest burned, then User C will get User X's NFT.

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