Participation Rate
Last updated
Last updated
The Participation Rate is calculated based on the ratio of the 'reference price of NFTs added by a user' to the 'total value of the basket calculated by reference prices.' The reference price represents the median of the last N (number 'N' is not disclosed to prevent price manipulation attempts) weighted average bid prices on supported marketplaces, where a bid price is the price a potential buyer submits with intent to purchase a specific NFT.
When a basket is completed, the Participation Rate determines each participant's portion of the Total Exchangeable NXPCₜ. This calculation can be demonstrated through an example with Alice.
For example, if Alice has added two of Item A into the basket with a reference price of 50 per item, and the total basket value calculated by reference price is 1,000, her Participation Rate would be 10% (50 × 2 ÷ 1,000).
The amount of NXPC Exchangeable for Alice is determined by multiplying her Participation Rate by the Total Exchangeable NXPCt. For instance, if the Total Exchangeable NXPCt is 500 and Alice's Participation Rate is 10%, 50 NXPC (10% x 500) would be provided to Alice for participating in Item Fusion.
The reference price of an NFT is the median of the last N weighted average prices. These weighted average prices are calculated using bids collected at irregular intervals, with higher bids prioritized until the required quantity (quote) is filled, ensuring reliable and timely pricing information. A bid refers to the price submitted by a potential buyer intending to purchase an NFT.
For instance, when the required quantity (quote) for Item #4 in the basket is 1,000 units, and if the highest bids for Item #4 are 100 units at 100 NESO each, 400 units at 50 NESO each, and 500 units at 30 NESO each in the market, the weighted average price of Item #4 will be assessed as 45 ((100×100 + 50×400 + 30×500) ÷ 1,000). Lower bid prices (such as bids at 1 NESO) won't be counted once the required 1,000 units are already collected from higher bids.
After this initial calculation, weighted average bid prices at different intervals are continuously assessed by dividing the period into multiple rounds. The evaluation period starts from when the weighted average bid price of NFTs in the basket is first assessed until the basket is completed and when NXPC can be distributed to participants. The final reference price, used to calculate Participation Rate, is determined as the median of the last N weighted average bid prices. This entire process is automated according to this predefined methodology.
