3.NFTs
Composing for Cash Flow
Core Function
3NFTs are the protocol's mechanism for transforming capital growth into programmable cash flow. By composing 3Receipts into non-fungible token (NFT) lots, you seamlessly switch their function from automated reinvestment to automated revenue generation. This provides a powerful lever to strategically manage liquidity, diversify income streams, and align your portfolio with real-world financial needs.
How It Works: The Cash Flow Switch
The process is a deliberate, reversible action that changes the fundamental behaviour of your assets:
Composition: You lock a precise number of 3Receipts from a Compound Deposit Pool (CDP) into a fractal 3NFT lot (e.g., 33, 330, 3,300 receipts).
Signal Automation: Upon composition, the Signal for the underlying 3Receipts is automatically and irrevocably set to a Liquidation Path. This cannot be overridden while the NFT exists.
On-Demand Cash Flow Generation: All rewards generated by the assets backing the 3NFT continue to compound as normal. Your cash flow is delivered through the protocol's shared efficiency: when a user or a liquidator initiates a claim, the system automatically harvests and liquidates all accrued rewards for that entire NFT lot into crvUSD. In practice, with an active ecosystem, this creates a near-continuous stream of claimable stable-coin revenue, giving you the benefit of automated cash flow while preserving the on-demand nature of the claim.
Reversion: Burning the 3NFT releases the underlying 3Receipts back to their native state, allowing you to reset their Signal and return them to a growth-oriented Compound Path.
The Protocol's Treasury Engine
This is not just a user-facing tool; it is the core of 3's own financial management. The 3 treasury uses 3NFTs to definitively segregate its assets into two pools:
Growth Assets: 3Receipts set to Compound Paths, continuously compounding to increase the treasury's long-term value.
Revenue Assets: 3Receipts composed into 3NFTs, generating the stable-coin stream that funds the Settlement Pledge, distributions, and ecosystem operations.
This allows the protocol to have a predictable and verifiable revenue model, directly linking treasury activity to system-wide stability and rewards.
Strategic Outcome: Liquidity on Your Terms
3NFTs complete the vision of a truly adaptable financial system. They provide the final, crucial piece of functionality:
For Users: A tool to generate passive income from your deposits without moving or selling your principal, enabling you to fund expenses or seize new opportunities without exiting your positions.
For the Protocol: A hard-coding mechanism to enforce a revenue policy, ensuring the system's solvency and growth are mechanically balanced.
Together with Deposit Pools and Signals, 3NFTs form a tripartite system that allows both users and the protocol to dynamically compose and recompose their financial strategies between growth and cash flow, as effortlessly as building with blocks.
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