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1) An NFT owner sets a Target Price for which he intends to sell the NFT and the type of quantization (standard quantization or self-quantization)

These parameters are used in the creation of the ERC20 QPhoton contract (the smartcontract that will own the NFT and will issue the shares that represent the fractional ownership) and they will determine the wETH/Shares pool for the next phase, the Free Market phase.

Each new NFT sale generates a new ERC20 Q-Photon ($QPHO) contract linked to that sale. If the same NFT is sold several times on Quantix, each sale will have a different contract. At the beginning of the sale then, the NFT is transferred as property from the seller to the QPhoton contract ($QPHO).

This contract implements the ERC20 interface and is therefore a token ($QPHO = Shares). However, it contains all the logic for managing the sales process of the NFT to which it is connected.

2) The number of shares to be minted in the Quantization Phase (QP) is proportional to the set Target Price set by the seller plus a platform interest of 3%.

3) During the QP, each investor pays wETH to obtain the minting of an equal number of shares (the shares minted during the QP, cannot be freely transferred to other users, but can be sold only via a Peer to Peer mechanism).

During Quantization Phase The number of shares received is equal to wETH deposited as the Price per share is fixed and the ratio is 1 share per 1 wETH.

As long as we are in the Quantization Phase, a user may decide to resell his shares by regaining wETH and simultaneously burn the number of shares resold, with a penalty of 2,5% (Penalty on sale is being collected by the platform).

4) Each investor, both in the QP and in the Free Market phase, is identified by the number of shares owned compared to the total number of shares (pro quota).

If the vendor decides to withhold a certain percentage of shares in the phase of the setup of the sale (and therefore to become to all effects a QP backer), at the moment of the beginning of the quantization the Shares withheld by the vendor are immediately minted and attributed to the vendor without the vendor have to supply wETH to obtain them. The rest of the Shares remain available to the investors. The maximum number of shares that the seller can retain in the Standard Quantization is 50%.

The QP can be considered complete if the seller has opted for the Standard Quantization and all the shares foreseen are minted. After that, the seller collects his gain, and the asset goes into the Free Market phase.

In this case, Seller withdraws the Target Price in wETH and the platform gets the platform interest as explained at point 2.

There are other 3 scenarios that are different from the standard one:

a) The seller has opted for Self Quantization.

The NFT goes directly to the Free Market phase without the Quantization phase; (check below Self Quantization)

b) The seller has opted for Standard Quantization and decided to cancel it;

The NFT go back to the seller (read more below in Cancel of Standard Quantization)

c) The seller has opted for Standard Quantization and decides to terminate it.

The NFT moove from Quantization to Free Market even if its not reach the target price (check below Terminate of Standard Quantization)

While setting up the sale, if the seller has opted for Self Quantization, there is no platform interest and in this case, the QP ends immediately, so all expected Shares are minted at the beginning of the sale and attributed to the seller without the seller having to pay wETH to get them.

The cancellation of the Standard Quantization phase foresees that the NFT returns to the seller and that the sale is canceled. The seller with the cancellation returns therefore in possession of the NFT but it does not earn anything, indeed, this operation previews the payment of a penalty of 1% on the wETH invested by investors.

In this case, all investors will be able to withdraw their bid in wETH without paying penalties.

In case a seller decides that the amount raised is enough and he wishes to stop QP, the amount of Shares minted becomes the new Target Price and the NFT goes directly to the Free Market. In this case, the seller will pay the platform interest of 3% on the amount of wETH raised during the QP.

Want to deep into Quantization Phase? Learn more on Product Doc