Stripping Mechanism
Stripping, also known as 'Strip the price' is an innovative pricing mechanism that enables users to unlock the guaranteed lowest price of the NFT products on Stripto Marketplace.
Stripto Marketplace offers two different but connected underlying mechanisms for buying and selling NFTs.
Positive Stripping Pricing Model (PSPM)
Negative Stripping Pricing Model (NSPM)
"Strip the price" model is an intellectual property of Stripto. The concept has been protected on Bitcoin and Ethereum blockchains. Additionally, the US patent has been filed (Patent pending).
# Positive Stripping Pricing Model:
This pricing model supports the trading engine by offering a simple mass price-reduction approach.
Let's take an example to understand the underlying model.
NFT Listed Price: $1000
STRIP token market price: $1
Required token per Stripping action: 1% of the listed price (i.e., STRIP tokens worth $10)
In this model, the listed price of the NFT is $1000, and the market price of the STRIP token is $1. To lower the price of the NFT by 1%, the user needs to pay 1% of the listed price in STRIP tokens, which is 10 STRIP tokens (worth $10). This process can be repeated by multiple users until the price drops by 99%.
For example, if 99 users participate in the process, they will collectively spend $990 worth of STRIP tokens to bring the price down by 99%. At this point, any participant or buyer can complete the transaction by paying the remaining 1% (which is $10) in ETH or BNB.
However, if there are more than 99 participants and they keep stripping the price by paying an additional 1% worth of tokens each time, the price will not go below the last 1% (which is $10) and will become static. This means that the price will not drop any further, even if more participants try to strip the price.
Here, the PSPM approach ends, and NSPM begins.
# Negative Stripping Pricing Model:
Negative Stripping Pricing Model (NSPM), which is an extension of the PSPM (Positive Stripping Pricing Model). Like PSPM, NSPM allows multiple users to collectively strip/unlock the price of an NFT by using Stripto's native token called STRIP.
However, in NSPM, the price of the NFT can not continue to drop once it reaches a certain value called the negative stripping hard cap. For example, in the above-mentioned case, the hard cap is 1% of the listed price, which is $10. This means that no matter how many users participate in the stripping process, the price of the NFT will not go below $10.
Let's assume that 150 or more users participated in the stripping process. In this case, the price of the NFT will keep dropping until it reaches the hard cap of $10 (via PSPM). Once the hard cap is reached, the price will become static (via NSPM), and no matter how many more users participate in the process, the price will not drop any further.
If the final buy transaction is concluded at the hard cap value of $10 via NSPM, the seller will receive not only the listed price of $1000 but also an additional 50% of the listed price, which is $500. This additional value is called 'excess tokens', and it is collected via NSPM when the demand for the NFT is high. In total, the seller will receive 150% of the listed price, which is $1500.
If the final buy transaction was concluded at 1% of the listed price, i.e., $10 via PSPM, the seller would receive 100% of the listed price (Max users participated = 99).
or
If the final buy transaction was concluded at 1% of the listed price, i.e., $10 via NSPM, the seller would receive 99% (contributed by 99 participants) + 51% (additionally contributed by 51 participants) =150% of the listed price via NSPM (Max users participated > 99)
To sum up, in NSPM, the seller can potentially earn more than the listed price if the demand for the NFT is high at a given time and the number of participants in the stripping process is more than 99. The hard cap value ensures that the price of the NFT does not drop below a certain point, while the excess tokens collected via NSPM provide additional value to the seller.
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