ERC1633 Re Fungible NFT

Using Bonded Curve Token or Liquid/ Smart Token as the owner address of an ERC721

Simple explanation

Bonded Curve tokens or Liquid tokens is a special type of ERC720 token that allows users to buy and sell tokens directly from the token's contract. Both refer to contract that will accept ETH or another ERC720 token in exchage for minting new tokens. The contract will hold that original ETH or ERRC721 in reserve for when someone wants to sell the tokens back. Technically very similar the two terms represent different use cases.

Bonded Curve & Curation Markets

These Bonded Tokens are mostly described for use within Curation Markets, where the price of a token can represent the popularity of a topic. One example is trend forecasting that could be conducted by buying and selling different tokens representing different trends. People predicting the success of a certain style might buy the tokens expecting more people to follow as the style gains notoriety.

Liquid tokens & Market Makers

Bancor calls this same technology a Liquid Token, emphasizing the fact that the token is always available for buying or selling in any quantity. They identify the relationship between the buying denomination and the selling denomination as a reserve ratio. Ratios below 1/2 increase exponentially, ratios above 1/2 increase logarithmically and ratios at 1/2 increase linearly. The price of a purchase is calculated with the total supply of tokens, the amount of underlying reserve and the pre-determined reserve ratio.

Re-Fungible token

If an ERC721 NFT were owned by the address of an ERC20 Bonded Curve/Liquid Token the non fungible asset would become fungible again.

Further reading

• Source: https://billyrennekamp.medium.com/re-fungible-token-rft-297003592769

• Full Implementation: https://github.com/ethereum/EIPs/issues/