Drop Event Overview
NFT Drop events are designed to provide exposure to new digital creators, while levelling the playing field for the acquisition of new NFT artwork.
A drop is organized whenever a new digital creator onboards onto the Drops platform, in either a public or private sale.
Public drops will allow anyone to participate, while private drops will be limited to whitelisted addresses that are chosen via a raffle. Users will also be required to hold a minimum quantity of DROP tokens, liquidity provider tokens or dPoints to participate in the whitelisting raffle. Additionally, all raffle entries will charge a fee in dPoints.
Private Drop Sale Structure
Each private drop raffle ticket sale will last for 24 hours. These raffle tickets are ERC115 tokens, each of which will be redeemable for one randomly-selected NFT from the artist’s collection. The total number of tickets minted for each drop will match the number of NFTs available.
Raffle ticket sales will reward early buyers with lower prices and increase for later participants. These prices and quantities will be decided in collaboration with the featured artist. For example:
- First 50 tickets priced at 0.4 ETH each
- Next 40 tickets priced at 0.6 ETH each
- Final 10 tickets priced at 1 ETH each.
Tickets can be purchased with ETH and DROP. Users may also spend their dPoints to cover up to 50% of the purchase price. Ticket purchase will also provide cashback rewards in the form of DROP tokens to eligible users.
To ensure fairness, there will be a purchase limit of 1 ticket per whitelisted address.
Conclusion of Private Drop and Redemption
A raffle ticket sale will conclude once all tickets have sold, or once the 24-hour sale period has elapsed.
Upon this conclusion of the sale, users will be able to use their ticket to redeem a randomly-selected NFT. Each ticket provides a claim on one NFT, so every ticket holder will be guaranteed the ability to redeem an NFT from the drop.
Cashback Rewards
To incentivize participation and a fair distribution of the DROP token, eligible users will receive DROP cashback rewards every time they purchase a drop event raffle ticket.
The cashback reward rate is dependent on the amount of liquidity provider (LP) tokens staked by the user. Each DROP-ETH LP token staked provides the right to 0.1% cashback rewards, with a maximum cashback reward of 5%.
Complete Example
Scenario: A drop raffle ticket currently costs 1 ETH, with ETH currently trading for a market price of $1,000.
User X can pay up to 50% of the ticket’s value in dPoints, and decides to do so. User X then pays the remaining amount (50%, or $500) in ETH.
User X receives their raffle ticket, which entitles them to redeem one randomly-selected NFT from the drop, at the end of the raffle.
User X is also currently staking 20 DROP-ETH LP tokens, which entitles them to a 2% cashback reward. For this particular purchase, User X receives $20 worth of DROP tokens in cashback rewards,
Overall, User X:
- Pays 500 dPoints and 0.5 ETH (a total of $1,000 in value)
- Receives raffle ticket redeemable for one randomly-selected NFT in the drop, and $20 in DROP from cashback rewards.
