Introduction

A quick introduction to Bitgem and how it works

What is Bitgem?

Bitgem is a system for staking and minting NFTs that uses opportunity cost and artificial scarcity to assign value to minted NFTs.

The way Bitgem works is by requiring you to stake some amount of Fantom for some amount of time in order to successfully mint an NFT. NFTs minted using the Bitgem system are called Gems.

When you stake your Fantom for an NFT Gem, the Bitgem network creates you a Claim, which is like a bearer bond for your deposited Fantom as well as your NFT Gem. Both NFT Gems and claims are implemented using the ERC1155 token spec, making both Gems and claims tradeable on any NFT marketplace.

Bitgem allows you to retrieve your Fantom at any time if you want - there are no restrictions placed on submitting your claim before its maturity date in order to get your tokens back.

However, in order to receive your NFT Gem, you must wait until the claim maturity date before you submit your claim. When you do, Bitgem then returns you your staked tokens, along with a newly-minted NFT (minus a 0.2% staking fee, only applied if you mint an NFT Gem).

Each time someone receives (mints) an NFT Gem, the staking price for that item is automatically increased, making staking more expensive for the next person. The rate of increase depends on the item's "difficulty", which is either a logarithmic or inverse log function, depending on how the staking pool was created.

Each staking pool also has a minimum and maximum staking time, which can be adjusted by the staker. The longer the staking time, the less it costs to stake that NFT Gem.

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