EthBlockArt

CreateStylesGalleryEditorial

The minting price mechanism explained

Creators pay a fee to the platform and to the owner of the selected BlockStyle to mint a BlockArt NFT, the minting cost is defined by a dynamic function including the block, time, NFTs already minted from said block, and the BlockStyle used.

There is no forced scarcity for specific block numbers, we use price discovery to create demand-driven scarcity for each block on ethereum with isolated price curves. No two BlockArt NFTs of the same block can cost the same!

Lets break it down, the formula for calculating a BlockArt NFT mint cost is

Block Fee = priceFloor + previous final price (when applicable) + dutch auction (when applicable)
Final Cost = Block Fee + BlockStyle fee (Multiplier or Minimum)

The Block Fee

Each block has its own price, set to a fixed minimum named priceFloor

Whenever a BlockArt is minted from a block, the final cost paid is stored, and used in the future as part of the block fee, so we have

priceFloor + previous price, when present

For the most recent just mined blocks, we run a dutch auction with the starting price set via a variable named priceCeil and lasting as many blocks as what's configured on the dutchLength variable,

This dutch auction acts similar to block confirmations, the more confirmations a block has, the more certain that block is, and the lower the cost of minting with it becomes, This serves as a mechanism to deal with certainty, while also de-incentivising participants sniping important blocks early, giving a fairer chance to more thoughtful curation.

Block Fee = priceFloor + previous price + priceCeil, decreasing for each block for the duration of dutchLength

The Style Fee

After calculating the block fee, the selected BlockStyle fee is applied, BlockStyle NFTs have a fee multiplier and a minimum fee, both parameters configurable by its owner.

Fee Multiplier is a number value used to calculate a dynamic price based on the block fee, balancing scarcity with price since a higher multiplier will cause a single block price to rise too high for any copycats, while also causing a higher initial mint cost from the start.

Minimum Fee is the minimum amount in ETH that a style will collect from each BlockArt mint utilising the style, when a fee multiplier is set to a small amount, the minimum fee guarantees a minimum predictable cost.

BlockFeeWithMultiplier = BlockFee * multiplier
Final Mint Cost = BlockFee + BlockFeeWithMultiplier or Minimum Fee

Concluding

  • The price ceiling for a BlockArt NFT is set when the block is mined, as time passes and a block ages the price declines along a curve, while the price never goes below the fixed floor price.

  • Once a creator mints a BlockArt NFT from a block, the price for that block stops falling, and a new floor price is set, the price for new BlockArt NFTs to be minted for that same block increases for every BlockArt minted.

  • Different BlockStyle NFTs have fees as set by the BlockStyle NFT Owner, more NFTs minted do not affect the style fee directly and the block fee is shared among all styles.

For any questions, comments and feedback join our discord and drop us a message! Thank you!

@adrianleb / 2021-07-29