In order to obtain a gNFT from a collection, a user must first purchase GBT from the bonding curve specific to the collection. They can then convert the GBT to a gNFT in the GumBall Machine. When users send a GBT to the GumBall Machine, they can choose to either mint the next gNFT in the collection or choose from one of the gNFTs that have been returned to the GumBall Machine (if any have been returned).
Users can also return their gNFTs to the GumBall Machine and receive back GBT. Each 1 gNFT returned to the GumBall Machine returns between 0.9 GBT and 1 GBT to the user. This specific amount depends on the redemption fee set by the creator of the collection (between 0-10%). This redemption is sent to the collection's bonding curve treasury where it gets distributed with the swap fees.
GBT as gNFT Index
In relation to the GumBall Machine and gNFTs, GBTs represent 2 things:
- 1.A unit of liquidity for a collection
- 2.An index of the gNFTs in the GumBall Machine
Initially, all gNFTs of a collection are in the GumBall machine. At this point, 1 GBT represents an index of the whole collection (and 1 GBT = the right to claim 1 gNFT in the collection). Over time, gNFTs will leave the GumBall machine. This happens when users deposit GBT into the GumBall to get gNFT out. Eventually, rare gNFTs will be taken out of the GumBall Machine, as their value should be greater than the common gNFTs in a collection. It is expected that rarer gNFTs are less likely to be returned to the GBM, but rather held in user wallets or sold on third party websites (opensea, LooksRare) for prices above the current GBT price.
Holders of rare gNFTs can always sell and instantly exit their position if they are willing to sell it for the current price of GBT on the Bonding Curve.
To summarize: Initially, GBT of a collection represents an index of all the gNFTs in the GumBall Machine for that collection. Over time, the rare gNFTs will likely leave the GBM and be held outside it, meaning the collections GBT will converge to an index of the floor gNFTs in that collection.