PawnHouse Litepaper

Using Information Symmetry to Strengthen Common and Private Values

1 NFT Price Discovery

There has been increasing attention towards NFT assets in the crypto industry. The uniqueness of NFT assets gives it low liquidity. Evidently, any popularization requires a liquidity solution mechanism, which is why we provide a series of pricing solutions here.

2 The Oracle for NFTs

The centralized transaction pricing of Fungible Tokens comes from the order book and matching engine. Traders of Fungible Tokens can freely place orders and quotes, making the miners who provide quotes in the oracle design process closely similar to a Price Taker. The processing of heterogeneous data and the pricing completion are accomplished. The quintessential part of the pricing is the relationship between supply and demand. Oracles for Fungible Tokens serves as price porters with the Defi ecology empowered by the AMM mechanism, while Non-fungible tokens are difficult to price because of their unique nature.

3 The Price Corridor of NFT Assets

Derived from pricing and auction theory, PawnHouse believes that any non-standard asset’s value composes of two parts: Common Values and Private Values.

3.1 Mortgage Loan & PawnTickets Circulation

NFT’s pawn contract is a NFT collateralized loan defi product that allows users to borrow or lend money based on their NFT assets or other non-standard assets like financial tickets generated in other defi protocols. “Price inquiry” is essentially the basic cognitive demand of NFT holders, and obtaining income is the basic economic demand of NFT investors.

3.2 Limited-Time Bidding

For defaulted PawnTickets that fail to repay on-time, a Limited-Time Bidding will automatically open when they expire. Effectively speaking, an English auction in where the total PawnTicket principal and interest are used as the price basis will begin. The transaction is then executed automatically within a limited time, and the highest bidder wins the auction. This model is also suitable for holders who want to convert their NFTs into cash as soon as possible. These users can also complete the disposal of assets by submitting a consignment of Limited-Time Bidding.

3.3 Simultaneous Multiple Round Auction

The 2020 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was jointly awarded to Paul R. Milgrom and Robert B. Wilson “for improvements to auction theory and inventions of new auction formats.” The auction they designed effectively solved the winner’s curse and the problem of information provision. SMRA (Simultaneous Multiple Round Auction) is the product of their design.

4 Tokenomics

PH is the original token of PawnHouse. It is an important element that encourages the normal operation of the system. It is also a certificate for users to participate in the economic rules of the platform for governance, profit distribution, and token repurchase. The total supply of tokens is 1 billion, of which 60% used as mining incentives, including: liquidity mining and staking mining.

4.1 Token distribution

Mining 60% (600 million PH)

The total distribution is as follows: [* For more details, please refer to “PawnHouse Dual Mining Rules & Algorithm]

Early team 10% (100 million PH)

Half year cliff, 10% unlock for the first release and 90% will be unlocked within 36 months quarterly.

Financing 15% (150 million PH)

Ecological incentive 15% (150 million PH)

● First year, 7% (70 million PH). 30% (21 million PH) of which will be unlocked after the project goes online. Subsequent PawnHouse unlocks 10% every time the equivalent of 10 million USDT mortgage loan matching is completed.

4.2 Token Usage

PH, as the original token of PawnHouse, not only represents the rights of the holder, but also has actual use value. PH will be used in scenarios including, but not limited to the following in the future:

4.3 First Adopters Reward Program

We are very happy that version 1.0 of PawnHouse will be introduced in June. Therefore, we have launched the “First Adopters Reward Program”.

Contact Us

[Email] Team@pawnhouse.io

References

1. Milgrom, P. (1981b). Rational expectations, information acquisition, and competitive bidding. Econometrica, 49:921–944.

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PawnHouse

Provide Better Liquidity and Price Discovery Mechanism for Nonstandard Assets