If you want to dig more in tech/crypto stuff, and btw this is one of those reasons that make this game great.
cNFT is a proposed standard for ERC-20 collateral staking on Non-Fungible Tokens for borrowing against game assets. Every item in game has its own market value and can be traded or get a loan for that item. In case loan does not return, that item will be collateralised, taken away from you as owner.
Example, buy good ship ingame for Credits from player. That ship is now your Farsite cNFT. It can be common or super rare. No matter what, that cNFT item has its value in ERC-20 tokens - in short thats RL money. That means every item you produce, collect, have in Farsite, it has its value in money and technically you can sell everything you have on community driven market for cash.
The core idea behind cNFT is a collateral stake to grant the intrinsic value of a digital asset created in the game. Simply put, cNFT is an NFT that holds a certain amount of ERC-20 as a collateral inside.
At any given moment, cNFT’s owner can burn the token and receive the ERC-20 stake, unless the cNFT is not used as a collateral itself (and that’s the most important part).
Backed by ERC-20, a cNFT can be used as a collateral for an ERC-20 loan. Staking an existing cNFT for lending additional ERC-20 allows for creating a new cNFT — rinse and repeat — that might create a leverage for multiplied growth (refer to Staking cNFT).
That said, a cNFT item can be used in many different ways:
playing the game — fly the Ship to haul goods, complete contracts, fight for loot, explore the universe, search for rare materials, act as a mercenary, to name a few;
as a collateral to borrow Credits;
as a storage of value (HODLing a Ship);
as a source for Credits (disassembling an item will release staked Credits);
for sale (list it on OpenSea or an internal marketplace).
Creating a cNFT
Creating a new ERC-721 cNFT token of an in-game item requires an ERC-20 to be staked.
An amount of ERC-20 required to create the cNFT depends on the item power or scarcity as designed by the game economy.
That said, with every cNFT purchased on a market a seller also passes the right to receive all the ERC-20 staked within. Whenever an owner decides to, or (if designed by the game) after being destroyed in the game — burning a cNFT will always release staked ERC-20 to the token owner’s address.
Staking cNFT
The most important part about cNFT is its ability to be used as a collateral for an ERC-20 loan. Being backed by the underlying ERC-20 stake, the lender is always sure he will receive borrowed ERC-20 back from the cNFT if the borrower defaults on the loan.
A player can continue using the token in a game and use borrowed ERC-20 to create new cNFTs and stake them again:
That enables building an entire fleet of Ships to gain significantly better achievements in no time, leveraging production volumes and total amount of items presented in a game.
Releasing a Collateral
A cNFT’s owner has the right to burn the token and receive the ERC-20 collateral at any given time, unless it’s pledged in a loan.
For example, a Ship may be destroyed in the game (rather a common scenario) — the cNFT token will be burned and ERC-20 collateral released:
to a player — if the Ship was not pledged — countervailing the loss of the game asset;
to a lender — if the Ship was used as a collateral for an ERC-20 loan — in a part that is required to be covered by collateral.
If a cNFT is staked, in case it’s destroyed or a borrower is no longer able to maintain the debt, ERC-20 will be transferred directly to a lender.
Join the team, msg me on discord Bombadil#9843 for more help. https://farsite.club/u/Bombadil