Proposal to lock REF token to mint NFTs to reduce circulating supply

General Concept
Lock REF to reduce circulating supply of Ref and mint NFTs, Ownership of the NFTs provide additional benefits beyond what the amount of locked Ref could usually get.

As part of research, we came across the following mechanics in Serum where you can lock 1,000,000 SRM together to create 1 MSRM, and you can redeem 1 MSRM out for 1,000,000 SRM. Note that there is a supply cap of 1,000 MSRM, so at most 10% of all SRM can be locked in MSRM at any point in time. Hence there is scarcity factor. Each MSRM receives slightly more rewards than 1M SRM would, and in many cases more than the maximum without MSRM. Staking : Each node requires at least 10,000,000 SRM (each MSRM counts as 1M), and each node must have at least 1 MegaSerum (MSRM) in it

With the recent recognition on the role that NFT plays, we start to see utility beyond just PFP. Prior to this, we see NFT being used as a passport to allow gated access to Discord or events for example.

Combining the two, my proposal is to consider locking up Ref tokens to mint NFT : Similar to Serum, the concept helps to lock up circulating supply of tokens in order to mint NFT.


  1. Lock X REF via contract and mint NFT. The contract should also allow redemption of said NFT for X REF. This helps to determine the floor value of the NFT.

  2. Set max mints possible for NFT at Y.

  3. This helps to lock up to X * Y REF into the NFT mining contract. That helps to remove that amount of REF out of circulation. We can further determine what is the right %. 10%? 20%?

  4. I am very against the idea of NFT for the sake of being NFT. I believe in having a strong use case to justify the demand. To that end, we need to carefully craft out what are the benefits for NFT holders that will be attractive to them. One thing to note as we design this is since the tokens are locked in a contract, the user is technically not able to use them for LP which is the current main use case (Besides “numba goes up”) coming from a DeFi perspective.
    Some preliminary ideas as follows. It can be a combination of the following.
    a) Potentially introducing staking so that users can still get some yields?
    b) Earn a share of the swap fees (We see this similar mechanism such as dQUICK and xSushi)
    c) Preferential swap fees on Ref
    d) Gated access to private communities
    e) Partnership with other NEAR Ecosystem Projects Eg. Cheaper minting/trading fees at Paras? Higher farming rates at Metapool and Cheddar? An egg at PixelPets etc
    f) Ref Mechandise swag
    g) Airdrops
    h) Early access to IDO (Need some calibration since there are existing platforms such as Skywards)

  5. To further gamify it, we might even do a collaboration with artists and introduce rarity to the NFTs with various traits. Recently, we start seeing AMM DEX introducing NFTs. One very recent example is SpookySwap.

  6. One further extension within the realm of possibility is whether it is possible to make those NFTs available on Paras for secondary market to trade freely? This has value of introducing value beyond the X REF tokens locked. Benefits + Limited mints. Similar to various gaming projects, a carefully crafted game economy has “sinks” to attract use case and demand of their token. Eg. $SKILL for Cryptoblades to summon new hero and buy Sword and Shield in order to earn more $SKILL, Aavegotchi Gotchis and Wearables to compete for a slice of earnings from Rarity Farming event help to keep demand for $GHST token.

  7. Other details to deliberate on
    a) Design of Contract : What can we do with the REF locked up that is locked up, while ensuring there is sufficient liquidity for users to redeem their NFTs for the X amount of REF tokens? Is it possible to trigger to buy back REF tokens from the market whenever someone redeems? This will clearly have a positive impact on the price, but this is complicated and question of where does the funds come from. Another alternative mechanism is a token bonding curve, but I feel this is too much change.
    b) Who owns the NFT contract? REF Treasury?


Fully agree with the idea. It will high the demand on REF token.


basically it should be staking function. NFTs or staking protocol are both good options.


To my mind this could also attract the audience from NFT to gain on staking and push the price of REF token up

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So nice proposal. I’m sure it will increase our REF token’s value more and more!

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considering it, thanks @wmheng


How about NFTs that are tied to farms?

Use the NEAR from minting to add liquidity to the REF/wNEAR pool, staking the shares on the farm. Every x days (maybe random) the farm rewards are claimed and something like 90% are distributed to holders of unlisted NFTs. The remaining 10%, along with a portion of the royalties from secondary sales, goes to buying-back listed NFTs and burning them.

Burning an NFT does not remove shares from the farm/pool. Over time, as more NFTs are burned, the number of shares each NFT represents increases, and the more rewards holders receive.

If this is successful, then we can introduce new generations of NFTs, maybe for other pools/farms. We can also increase the value of the NFTs by making it so that Gen 1 holders are the only ones who can mint Gen 2 NFTs, and Gen 3’s can only be minted by Gen 1 and Gen 2 holders.

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For example, if you have 10,000 NFTs with a mint price of 100 REF each, the max amount the contract can collect is 10,000 * 100 = 1,000,000 REF.

Let’s assume that users perceive greater value in holding the NFT than other use cases (of using their REF tokens). The first thing I see is that NFTs cannot be divided (undivisible), so the contract has a limited supply, creating a first come, first served rule. It can create a FOMO-like kind of event (if successful), like the ones we see in auction, for example. Why not, but it’s worth noting that not everyone will be able to participate.

Now, in the idea of creating intrinsic value for the NFTs.

Yes, staking could be done on Paras Staking Solution for example. But this solution only creates demand in the short term, as it is not sustainable.

Potentially cannibalising our revenue sharing contract. What would be the splitting rule? Today protocol fee equals 16% of the total pool fee. Of that 16%, 75% goes to the xREF contract. Details.

If the rewards go to the NFT contract, am I correct to assume that the floor price of the NFTs will automatically increased? I think so.

That’s interesting. How would we enforce such a rule at the contract level? Why would we not do the above with xREF too/first?

What communities are you thinking of?

Like d, that involves an important Business Development effort to unlock d and e.

Again, why would we not focus on xREF too/first. Like holding x amount of xREF gives you a discount for swag, etc.

Goes at the opposite direction of limiting the supply, imo, although you were thinking of other tokens. Then that requires, again, an important Business Dev workstream.

Would not work with the concept of Skyward, as it based on a fair launch principle (no exclusivity and privilege).

Although that’s a good idea, it’s worth underlying that the risk is covered by the DAO Treasury, as the contract always ensures/enforces the redemption of the NFT for a known and determined price. As you mentionned, the floor value of the NFT is known.

In a scenario where the artist damages his/her reputation by x, y actions, and if such actions significantly undermines the value of the NFTs, holders will still be able to redeem the NFTs for a minimum price. The DAO treasury will then end up with worthless NFTs in its treasury.

I don’t see any reason why those NFTs couldn’t be traded freely on the secondary market (i.e. Paras).

It’s not a buy back, remember, it’s like the staking contract. You can redeem the NFT and you will get Total REF amount locked (at the time you redeem) divided by 10,000 (taking back our example).


Do you mean the Treasury matches the equivalent amount of REF locked (the ones used to mint NFTs) in NEAR to then provide REF <> NEAR liquidity and stake into a farm?

If we do that, we take back our own liquidity incentives’ emission, no? Or did I misunderstand?

Thus decreasing the potential number of beneficiaries, as fewer NFTs involve fewer max possible unique holders, no? Why not but that will benefit only the ‘dominant class’ in the game.

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I should have specified that NEAR would be used to mint the NFTs, not REF

We can put mechanisms in place, like a whitelist, to reduce mints/person. The max total number of NFTs will also effect the length of time it takes for the dominant class to gain a monopoly. But once minting is done, and the NFTs are allowed to be sold on secondary markets, it’s up to individuals to decide whether to sell or hold

btw we can also use a portion of royalties/rewards to buy back ref and deposit into the xREF pool.

Hmm for further context the proposal was conceptualized in Nov 2021, at that time xRef were not given birth yet so a lot of these functions can be derived to xREF instead of building a separate Ref NFT

Cant expliticity replicate what he had in mind at that time, but my guess would be to allow NFTs holders of Ref(assume that we allow REF NFTs to be a thing) to gain access to previlidges that other NFT holders have

For example i think NEAR Panda Squad holds a weekly poker table exclusively for its NFT holders and its partner, we can exchange those seats for NFT holders in return for a farm proposal which requires Ref emission

Hmm from my understanding Ref. finance is rewarding the Ref/wNEAR pools with huge APR since people apes in as the reward they got back would surpass the IL affected to the LPs

However, the acts of Ref taking the NEAR raised from NFTs selling to add liquidity to the REF/wNEAR pool indicates that Ref is taking the risk of the IL from Ref/wNEAR to itself, the user by buying at a fixed rate for the NFTs is neglected from the IL + receive a huge upside from ref emission, which is unjustified IMO => if the NFTs is release there could be chances that LPs can simply unstake the owner/Ref LP, used that unstaked tokens to repurchase NFTs and game the system
Hence we should identify a clear outcome on how Ref can give out an ROI that flipped the IL via this LP NFT idea

I don’t think IL will be an issue. The goal is to lock REF, and using revenue from NFTs doesn’t put existing funds at risk. The shares will also never be withdrawn, they are permanently in the pool and staked unless something extreme happens, and the DAO votes to withdraw them or movie them to another pool/farm. Not all minting revenue will go to the farms. Ref will keep a portion, and some will be set aside for buyback/burn of NFTs. Same with farm rewards. Also, there are royalties from secondary sales. The hope is that when we start buyback and burn of the NFTs, their value will increase, and the revenue from royalties will increase as well.

The owner of an NFT will not have any control over the shares. They cannot unstake them, or withdraw the liquidity from the pool. They can only list their NFT, unlist it, or transfer it. There won’t be any connection between a specific NFT and a specific share. The shares will be under one account, ideally controlled by a DAO.