A few months ago (felt like ages ago), there was a huge boom of “food tokens” on Uniswap. These food tokens at their core were yield farming tokens — you would stake some sort of token and then receive yield back in the form of another token. Typically you would stake Liquidity Provider (LP) tokens from Uniswap, and staking this LP would give you an entirely different token in the form of yield. This caused short-term price appreciation of the token for which liquidity was provided due to the nature of the Uniswap pricing mechanism. However, in order to realize this yield, you would need to sell off the token that you farmed. Unfortunately, this caused many of the projects doing this to fail — can’t keep the musical chairs going forever.
Uniswap pricing works by a simple ratio of asset to collateral. In our case, the ratio is Ethereum per TOSHI, the TOSHI/ETH pairing. As the amount of collateral goes up, the price in Ethereum goes down. As the amount of Ethereum goes up, the price per TOSHI goes up. Uniswap has no way to provide “limit” or resting orders and has no orderbooks. There are only “market” orders, and the market price is always the ratio of that asset to collateral. When you provide liquidity on Uniswap, you receive LP tokens in return. These LP tokens act as the “key” to withdrawing your liquidity. Thus, if you burn the LP token, you permanently lock liquidity onto Uniswap. These are the basic mechanics.
NFTs on platforms like Opensea, however, do offer limit orderbooks. You can list an NFT for a price, or set an offer for a price at which you would purchase an NFT. Thus, a project that combines NFTs with Uniswap can take advantage of market orders on Uniswap, as well as the orderbooks on Opensea — giving it the full range of liquidity, same as a normal exchange.
Currently, TOSHI uses a model similar to the food token craze, except we give vouchers (in the form of ToshiCash) to purchase NFTs as yield. This is good for the NFT market and provides additional access to liquidity for the project. However, tokenomic issues can arise under the current model as the project will always seek to balance liquidity between Uniswap and Opensea.
This model will be changing in a way that ensures greater price stability and encourages price appreciation of both TOSHI and Toshimon Cards.
The new model
Shortly we will be offering a sale of two exclusive NFT cosmetic cards that will act as permanent locked liquidity vouchers on the Uniswap platform. These cards will only be purchasable with LP tokens. Upon purchase, you will be able to stake these cards exactly how you stake your LP tokens currently, and earn yield in ToshiCash. This encourages price appreciation through the permanent locking of liquidity onto Uniswap. These cards will be rare, collectible, and also act as cosmetic items in-game.
Due to how liquidity works on Uniswap, this is a better alternative than simply burning TOSHI tokens, as it accomplishes the same thing in a better way. Effective supply of TOSHI will be reduced, while effective pool size also increases. As more liquidity tokens are locked into NFTs, small buys and sells will no longer significantly affect price. As more LP tokens are used to purchase these NFTs, the NFTs become more valuable. It is a positive feedback loop.
Our NFT gateway will allow for you to seamlessly send these NFT LP cards back and forth between Ethereum and Polygon (Formerly known as Matic) to stake and use in-game. This model serves to ensure programmatic price appreciation and stability of TOSHI while also providing easy secondary markets to buy and sell your Yield farming NFTs —e.g. Opensea.
This update is implicitly a commitment to keep TOSHI on Uniswap, and to keep decentralization as a core tenet. Listing on centralized exchanges is often a death knell for small projects, as you give supply and price control to a centralized entity. This commitment to Uniswap ensures that the community will always decide the fair price — not some disinterested CEX.
How to get the NFT LP cards at launch
Step 1: Add TOSHI and ETH liquidity to the TOSHI/ETH Uniswap pairing. This will give you a number of LP tokens.
Step 2: Purchase an LP NFT with these LP tokens using the official Toshimon website or the contract on Etherscan (not yet launched — updates will be given in Telegram)
Step 3: Stake this LP NFT on the official Toshimon site or the contract on Etherscan (not yet launched — updates will be given in Telegram)
Step 4: Earn Toshicash as yield for the duration that you stake these NFTs.
NOTE: Due to high demand, it is best to have your LP tokens ready at launch. Price of obtaining LP tokens rises with the price of TOSHI.