The Ultimate Guide to FRAKT Staking
How to Maximize Your APY Yield With Frakt NFTs
TL;DR. I believe Orange Nets are the best risk adjusted return for FRAKT.
Orange Stars currently yield the highest APY.
FRAKT (the first generative art built on Solana) is widely considered a blue chip NFT, with a broadening ecosystem, their own $FRKT governance token, regular new NFT launches, and the ability to stake your FRAKT art to earn interest. Full disclosure, I’m a holder.
My goal with this post is to help you navigate the wide range of FRAKT art to help you make more informed and better buying decisions that yield the best APY and risk adjusted return.
The NFT market is still very new and there’s a lot of inefficiency, as people panic sell, need liquidity or simply don’t understand the ecosystem well enough to price things properly.
Since my goal is to find the best risk adjusted return investment in terms of APY (paid in the native $FRKT) token, I took the liberty of mapping out each possible category of NFT I could buy and compared it to the real time APY.
As you can see from the graph below, the best risk adjusted return are the orange nets, which are very poorly priced on the open market. For example, at the time of this writing, the orange net floor is 6.4 SOL, while the white net floor is 6 SOL. This makes for a solid improvement in the APY of owning an orange net compared to a white net.
The highest APY are the Orange Stars, although you’ll take on significantly more risk and have less liquidity.
Personally, my favorite investment in FRAKT at the moment are the Orange Nets because they produce the best risk adjusted return while still providing near immediate liquidity as they are close to the floor price of the overall collection.
If you do the math yourself and don’t see the same APY with the Orange Nets, it’s because I just swept the floor!
(The spreadsheet can be found and copied here). You can plug and play the numbers both the floor price of the NFTs and price of $FRKT changes.
Question: can anyone plug these numbers into an API so that the floor price and price of FRKT update automatically within the spreadsheet to help us all make better buying decisions? That’d be awesome.
And if you’re wondering why I’d share this information instead of keeping it for myself, it’s because I care more about contributing to the space and believe I’ll be rewarded more for giving than I will by making investments with asymmetric information.
A few notes on my process. I used the current floor price on Solanart.io. I’m aware that FRAKT is listed on other places, such as MagicEden, but in my experience the most volume and best floor prices is on Solanart.
Second, I measured the APY in USD, using the current $FRKT price of $0.23. Naturally, if the price of $FRKT doubles, so too will your APY.
Finally my only consideration for this post is the APY I can earn by staking FRAKT. I didn’t consider other factors such as the novelty of owning a rare or the accumulation of points, which gives you perks such as early access to future drops.
The points system grants you one allocation of a future NFT drop per 500 points of staked FRAKTS. For example, if you own 1,000 points worth of FRAKT and stake them, you’ll get 2 mints for a future drop. These mints cost 5 $FRKT which is roughly $1, so you’re essentially getting free art for being a long term staker.
Alternatively there’s a lottery where 1 point earns you 1 ticket.
Personally, I don’t place much value on accumulating points, as it costs roughly $50,000 to gather the 500 points required to guarantee to you one free mint for a future drop.
The last drop (Moments) has a price floor of roughly $100. Even if FRAKT were to launch one new collection per month with each project having an average price floor of $100, that’s $1,200 per year in free value in exchange for staking 500 points worth of FRAKT art. This comes out to an additional 2.5% APY.
In short, having enough points to guarantee you a free mint is a hefty investment for incremental APY, so I neglected it from my calculations.
I hope this post helps you better navigate the FRAKT ecosystem.
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Thanks for your help and attention.
P.S For further reading on the FRAKT ecosystem and strategy, check out this awesome post.
Disclaimer: The content covered in this newsletter is not to be considered as investment advice. I’m not a financial adviser. These are only my own opinions and ideas. You should always consult with a professional/licensed financial adviser before trading or investing in any cryptocurrency related product.