Above and Beyond Shorting

The creation of borrowable pool is effectively the creation of a fungible proof-of-partial-ownership (POPO) to a pool of non-fungible assets. Although such concept has been realized by various projects (e.g. Fractional), Parallel is the first to let POPO holders be able to redeem their POPO back into NFTs within the pool. Therefore the size of assets within the pool can expand and contract freely given whether there are more deposits to or withdrawals from the pool, and the value of the POPO will be much more closely related to the value of the underlying assets in the pool as the redemption of the POPO acts as its minimum price. POPO effectively becomes the tradable and settle-able instrument that underlies the floor price of a collection.

This opens the door for all kinds of possibilities for POPO to be used in DeFi scenarios, such as being a general holding of NFT vaults, providing liquidity in AMM and acting as collateral in money market.

Last updated