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-title: Overview
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-metaTitle: MPL-404 - Overview
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-description: Provides a high-level overview of the framework and onchain protocol for hybrid assets.
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----
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-MPL-404 is a new model for digital assets, web3 games, and onchain communities. At the core of the model is a swap program that trades a fixed number of fungible assets for a non-fungible asset and vice versa. The swap is a dual escrow system, ensuring that all available non-fungible assets are backed by escrowed fungibles and vice versa.
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-The ability to freely move between fungible and non-fungible assets in a predictable way allows this new asset class (often called 404s) to take advantage of the best aspects of both asset types. Non-fungible assets can now benefit from the liquidity, distribution, and DeFi opportunities associated with fungible assets. Conversely, fungible assets can now benefit from the improved utility, collectability, and identity that come from the non-fungible world.
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-MPL-404 includes the option to "re-roll" the asset each time its swapped. For example, every non-fungible asset can have its metadata blanked as it enters the escrow wallet and randomly reassigned (rerolled) as it leaves escrow. The creator has the ability to both manage available traits as well as to charge a small fee during the swap (typically when swapping into an NFT). MPL-404 can add add “loot box” gamification to every 404 project and can serve as an alternative source of revenue (e.g. unique limited time traits for an NFT community or randomized in-game rewards). It also offers the ability to craft more dynamic collections that can evolve to better suit the needs of the project and community over time.
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-## MPL-404 Advantages
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-At a high level, MPL-404 allows you to create a bridge and toll booth between two types of assets, providing collectors additional flexibility and freedom and creators additional economic opportunity. MPL-404 hybrids have the following advantages:
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-### Liquidity
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-Unlike NFTs, fungibles have efficient mechanisms for providing liquidity. Liquidity generally allows people to transact easier, resulting in additional transaction volume. A project can both provide a sizable liquidity as well as incentivize community provided liquidity. Because of the swap, providing liquidity for the token also provides liquidity for the NFTs. Liquidity is a complex topic, that is beyond the scope of these docs.
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-### Fractional Exposure
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-By maintaining a stable conversion between fungibles and NFTs, users can now gain exposure through fractional amounts of a collection. This provides fractional ownership opportunities of expensive NFT collections to a larger audience.
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-### Availability
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-MPL-404s are able to be featured in NFT marketplaces as well as fungible token outlets such as DEXs, CEXs, telegram bots, and token trading platforms. Additionally, the MPL-404 swap mechanism can and will be hosted on external platforms, minimizing the need for self-hosting.
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-### Dynamic Collections
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-Via the swap mechanism, creators can easily distribute new art and traits over time.
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-### Community Curated Collections
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-MPL-404 collections become community curated over time, allowing people to swap out of undesirable traits and into more desirable ones. Traits get rebalanced over time. For example, this allows the ratio of female to male characters to accurately reflect the communities needs without the need to make an arbitrary, irreversible pre-judgement as a creator.
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-### Inbuilt Gamification
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-Optionally projects can randomize the NFT metadata via the swap, resulting in a “Loot box” or “Gachapon” like effect. Users still have the opportunity to re-roll into rare and desirable NFTs, which often is not the case with other mechanisms like fractionalization. Swapping can further be incentivized by creators by introducing limited time and/or seasonal traits.
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-### Additional Project Revenue
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-For facilitating the swap and gamification a creator may choose to charge a swap fee (often when swapping from fungibles to non fungibles). Charging a fee is important to prevent rarity inflation and must be balanced with swap outcomes. Properly incentivized, it’s not unlikely that the swap fees raised bring more revenue than NFT royalties. MPL-404 offers the project an additional source of revenue.
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-### Unified Tokenomics Model
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-Unifying one or more NFT collections to an underlying token simplifies a project ecosystem and makes a tight coupling of NFT and ecosystem token instead of a loose one. These two assets are no longer economically independent, which means creators no longer have to struggle to manage both. Value provided to one asset type will affect the other.
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-### Arbitrage Opportunities
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-With MPL-404s, two assets are always intertwined by a bridge. Occasionally, the price of the assets can diverge great enough for there to be an incentive to arbitrage them using the bridge. This arbitrage improves trading volumes and swap volumes, leading to additional project revenue.
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-### Optional Deflationary Tokenomics
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-Some MPL-404 projects have decided to use swap fees to burn tokens slowly over time which is in contrast to most projects with tokens that slowly inflate the supply over time, often via a staking mechanism.
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-### Guaranteed Swapability
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-Generally MPL-404 hybrids choose to create & release their whole token supply at the start, ensuring the number of NFTs and fungible tokens are in balance and the escrows are fully funded. When set up properly, the MPL-404 swap is never “offline” or out of tokens. MPL-404 swapability is a guarantee projects can make to holders.
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-{% callout type="note" %}
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-The MPL-404 docs are currently in alpha, with new improvements and guides coming soon. Interested in using MPL-404 for your project or learning more? Contact us in [Discord](https://discord.gg/metaplex) and tell us more about what you're working on.
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-{% /callout %}
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