TradePort Price Locks on Sui

TLDR

TradePort is bringing Price Locks to the Sui Ecosystem! This innovative feature gives traders novel risk management options allowing them to go long or hedge their holdings with NFTs without actually owning the underlying asset. In addition to more options for active traders, this also makes participation in blue chip NFT collections more accessible to the average user. We are excited to bring this innovation to Sui on TradePort and have secured several partnerships to provide incentives for traders engaging with this new feature! Make sure to read through to the end to learn how you can get involved!

Introduction

In this article, we'll cover the exciting new feature that TradePort is bringing to the Sui Network: NFT Price Locks. We'll explain what Price Locks are, the new opportunities they bring to Sui, how the associated calculator works, and details about purchasing and funding locks. Additionally, we'll provide insights into the communities expected to participate in the launch of Price Locks.

What are Price Locks

Price Locks are a trading mechanism that allows users to either go long or hedge an NFT without owning the NFT itself. This means you can participate in the price movement of an NFT collection and potentially profit from it, without making a large upfront investment to purchase the NFT itself.

Price Locks operate on a peer-to-peer basis, meaning the trades are directly between individuals and not based on oracle pricing. You can be on either the purchaser side or the funding side of a lock and have the flexibility to go long or short.

Put simply:

• Long: You are anticipating the price will go up.
• Short: You are anticipating or hedging a scenario where the price goes down.

Price Locks - Creating new opportunities for Sui NFTs

1. Lower Capital Requirement: Engage in NFT trading without needing to buy the NFTs outright, making it accessible even to those with limited funds.
2. Financial Inclusion: Options are a great way to allow users who might not be able to afford to purchase an asset to still participate and have exposure to some of the best/biggest collections in the space. In other words, price locks make it possible for NFT collections to have an even larger community than they could before.
3. Profit from Market Movements: Price locks give users the flexibility to potentially benefit from the price movements of NFTs in either direction.
4. Expanding NFT Utility: While NFTs are still in their infancy, these types of features will be necessary for market participants as NFTs expand to a wider variety of use cases (think RWAs).
5. Risk Management:  If you’re a large holder of a collection, you might want to use price locks as a way to manage your exposure, and price locks give you a way to do that.
6. Flexible Trading Strategies: Use long and short positions to create more sophisticated trading strategies.

By incorporating features like Price Locks, TradePort aims to enhance the overall NFT trading experience, making it more inclusive, functional, and flexible for all participants.

How the Calculator Works

The Price Lock Calculator is an essential tool for determining potential profits and break-even points when engaging in Price Locks. Here's a simplified breakdown:

• Input the Lock Price: The price at which you enter a long or short position.
• One-Time Fee: The fee paid for entering the position, which affects the break-even point.
• Projected NFT Price: Estimate where you think the price of the NFT will move.

How do Price Locks Work?

Purchase Locks

Going Long

• Goal - You want the value of the NFT to be higher than the locked price + the fee (value in this scenario is determined by the highest collection offer, not the floor price). When going long you want to go with the lowest price when reviewing the offers.
• Price - The current fee is 3.0% of the locked price. This is the only fee charged and it is non-refundable.
• Potential gain - Sui. You also have the right, but not the obligation to buy the NFT at the lock price.
• Risk - Loss of the fee. If the highest collection offer is lower than the lock price + fee then the lock is not in profit.

Going Short

• Goal - you want the value of the NFT (floor price in this case) to be lower than the locked price + the fee. When going Short you want to select the highest offer.
• Price - The current fee is 3.0% of the locked price. This is the only fee charged and it is non-refundable.
• Potential gain - Sui. You also have the right, but not the obligation to SELL the NFT at the lock price.
• Risk - Loss of the fee. If the floor price is higher than the locked price plus the fee, the lock is not in profit.

Fund Locks

Funding a Long with an NFT

• Goal - When you fund longs, you provide an NFT as collateral. If the floor price of the NFT rises above the lock price, the lock purchaser can exercise their right to buy the NFT, and you will receive a yield. If the value of the NFT drops below the lock price, you will get the NFT back plus yield. To fund longs, you need to have an NFT to fund the position. It isn't guaranteed that you will get your specific NFT back. When funding price locks, you agree to receive one of two outcomes: either a random NFT from the same collection or the minimum amount of Sui you specified. You won't know which one you will receive until the lock you funded is either exercised or expires.
• Price - There is no fee for funding longs using NFTs.
• Potential Gain - yield + Sui or yield.
• Risk - When funding longs you need to understand that you might be parting with the NFT you use to fund so you might not want to include a rare NFT unless you set a high price. Also you won't be able to list the NFT during the Price Lock.

Funding a Short with Sui

• Goal - You either want the NFT or the price of the NFT to go up. If the floor price goes below the lock price then you get back a random NFT + yield. If the floor goes above lock price then you get back Sui + yield.
• Price - When you fund shorts, you specify a lock price at which you are willing to provide liquidity. This lock price is the amount you expect to receive back in Sui if the price conditions are met.
• Potential Gain - Funding shorts allows traders to gain exposure to a collection without owning the NFTs outright. This can be a strategic way to earn yield and potentially acquire NFTs at a lower cost.
• Risk - Funding shorts carry the risk of the floor price falling below the lock price. In this case, you receive a random NFT from the collection instead of your initial Sui investment. If the NFT you receive is of lower value, you might incur a loss. Therefore, careful consideration of the lock price and the market conditions is crucial to mitigate this risk.

Price Lock Collections

Below is a list of collections that will be taking part in TradePort NFT Price Locks. This list is not all-inclusive, and more collections will be announced in the future. Keep an eye out!

• Tails by Typus
• Egg by Aftermath Finance
• Prime Machin
• Unchained
• SuiFrens: Bullsharks and Capys
• Simba
• Rootlets
• And more!

Conclusion

TradePort is bringing this innovative new feature to the Sui Network and partnering with various collections that will offer exciting prizes for engaging with this new feature. Make sure to check TradePort’s Twitter for announcements. Stay tuned for more updates and happy trading!

Financial Disclosure

Price Locks are very volatile and can result in a total loss of capital provided. Only utilize Price Locks if you completely understand the mechanisms involved and the risks associated with them. None of the above should be construed as financial advice.