What Is Solvent (SVT)? Complete Guide Review About Solvent.

What Is Solvent (SVT)?

Liquidity is essential for enabling smoother transactions on any trad-able asset. NFTs are highly illiquid today. Solvent One of the most common ways of trading NFTs today is via a sale-based or auction-based mechanism where the sellers list their NFT assets on the marketplaces. In the sale-based mechanism, the sellers list their items at a fixed price, and buyers can pay that amount to receive the NFT asset to make a trade possible. In the auction-based mechanism, the sellers list their items for an auction and receive bids from the interested buyers, with the NFT asset going to the highest bidder.

In both cases, the amount of capital that has to come into play just for executing one single NFT trade is high, and therefore the capital efficiency in both cases is low. For being able to trade NFTs as seamlessly as many other asset classes today, like gold, the markets for NFTs need to be made more liquid. Solvent is a platform to create efficient liquidity markets for trading NFTs. Users get instant liquidity for their NFTs by depositing them into a collection-like data structure called “bucket” in exchange for a fixed number of a fungible token derivative called the “droplet” of that NFT project.

This droplet represents an index of the floor price of NFT assets in that project. Each NFT project / collection will have its own “bucket” and “droplets” on Solvent. So in a way, users receive instant liquidity equal to the floor price for that NFT project with Solvent. These fungible tokens are tradable on Serum order books, and liquidity can be established for trading these tokens with the help of AMMs like Radium.

Solvent Storage Key Points

Coin BasicInformation
Coin NameSolvent
Short NameSVT
Circulating Supply6,920,000.00 SVT
Total Supply100,000,000
Source CodeClick Here To View Source Code
ExplorersClick Here To View Explorers
Twitter PageClick Here To Visit Twitter Group
WhitepaperClick Here To View
Official Project WebsiteClick Here To Visit Project Website

How does the pricing discovery work?

Degenerate Ape Academy has its bucket available on Solvent. The owners of the NFTs belonging to the Degen Ape collection will be able to get instant liquidity by depositing their apes into the Degen Ape bucket. For every Solvent deposited, 100 $DAPE (droplets for Degen apes) will be minted to the depositor. Each droplet on Solvent will have its respective liquidity pools on an AMM. The real-time prices of the droplets of the NFT projects represent a stabilized AMM-based floor price of NFT projects as compared to the stabilized source of floor price from the marketplaces where the floor of the entire project is defined by the price of just one single NFT asset.

Why is Solvent more efficient?

NFTs have one huge problem today and that is the problem of liquidity. One of the reasons for liquidity is just as mentioned above, the lack of efficient ways to discover fair pricing for NFTs. Most of the NFT collections today get their floor prices from the NFT that is listed for the sale at the lowest value in a particular marketplace. Solvent And the valuation of floor price is achieved by the NFT, only after the buyer has paid that amount to the seller. As noticed, the capital efficiency of this approach is low. Capital efficiency is the ratio of spending and growth. The NFT asset won’t be truly worth 100 SOL until some buyer pays the equivalent amount to the seller.

How do Solvent establish enough liquidity?

For executing smoother transactions on the droplets, sufficient liquidity needs to be added to the Serum markets for those droplets. Users holding droplet tokens of NFT projects can add their liquidity to the pools to earn trading fees as well as yield farming rewards. Solvent Currently, as of December 23, 2021, the way users can add liquidity is by minting the droplets by liquidating their NFTs and using those droplets to add to the liquidity pools. This way has been working well for projects that have relatively lower floor prices (less than 10 SOL), such as Pesky Penguins.

Whereas for the projects which have relatively higher floor prices (greater than 35 SOL), they have noticed that users do not want to lose the ownership of their relatively expensive NFT assets for adding liquidity to the pools. For this, they are evaluating and working on newer features. So, there is near to constant cost that is paid for the price discovery to happen, and the same price discovery applies to all the NFTs in the project.

Liquidity Rewards

For providing liquidity, the users will be rewarded with liquidity rewards. The liquidity rewards are in form of $SVT tokens, the governance token for Solvent, that will be discussed ahead in detail. The liquidity rewards will be higher for the early-stage liquidity providers and will reduce with time. The Solvent team has a significant allocation of the $SVT tokens in the tokenomics for the liquidity rewards and will be available to the public when the tokenomics are released.