What?

ShardVaults are insrt’s first application - they democratize ownership of Bluechip NFTs & their associated returns by offering users a low entry price to become partial owners of their favorite, coveted, collections. In addition to spot price exposure, the underlying NFTs are automagically financialized to earn interest, providing ShardVault users with a consistent stream of NFT-backed yield.

How?

  1. Users can deposit ETH into insrt’s ShardVault until it reaches the required funding amount.

  2. Once the Vault reaches capacity, insrt's protocol acquires a CryptoPunk and the NFT is split into 100 unique Shard NFTs that represent 1% ownership of the Punk.

  3. Each depositor receives a Shard NFT. This NFT functions as proof of a user's partial ownership. the blue chip and entitles them to yield payments generated by insrt.

  4. The CryptoPunk is collateralized on a lending protocol (JPEG’d). The ShardVault borrows pETH: an Ethereum derivative supported by the JPEG'd protocol, and deposits it into high-yield strategies, such as JPEG'd's Citadel farm.

  5. The ShardVault manages the collateral position to automatically repay the loan, monitor risk, and compound + harvest yield for our users.

  6. Users can claim their farmed yield periodically from the ShardVault as it's accumulated.

  7. If the price of the bluechip NFT appreciates significantly, the Shard owners can propose a vote to close the yield farming position, and sell the NFT. If the vote passes, the protocol sells the NFT and distributes all profits to Shard holders.

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Why?

While the initial ShardVault is straightforward: one CryptoPunk, 100 Shards, one collateralization strategy, future ShardVaults can feature many permutations of the aforementioned. ShardVaults can be created for any collection or even a basket of collections. There can be any number of Shards created. ShardVaults can be reinitialized and more assets added to them over time. Multiple yield-generating strategies can be used and adjusted over time. As insrt creates more Wrappers for primitives, expect many new flavors of ShardVault.