When Untokens Stall or Crash: What’s Next for Rewards?

Welcome to the Untrading blog! Today, we’re tackling a big question from our community: “What happens to Future Rewards if my untoken’s price stops climbing—or worse, if the underlying token’s project collapses?” It’s a sharp concern, and we’re here to unpack how our Provenance Value Amplification (PVA) system and ERC-5173 standard handle these challenges—plus the clever ways Untrading protects your Flows. Let’s dive in!

How Future Rewards Work: A Quick Recap?

Untrading’s Future Rewards (FRs) let you earn from price increases even after selling your untoken—be it an unNFT or an unCrypto like unBTC. Here’s how it works:

1. When you sell an untoken, you set a Reward Ratio (defaulting to 15%-35%, adjustable as per the whitepaper, page 14).
2. If the next owner resells at a profit, you get a piece of that profit, shared among eligible past owners and the Originator.

Example:

• You sell an untoken for $40,000 with a 30% Reward Ratio.
• The next owner resells it for 50,000, making a 50,000, making a 10,000 profit.
• Your 30% share is 3,000,split with others (say,5 prior owners and an Originator taking 10% Originator’s Reward (OR), split with others (say, 5 prior owners and an Originator taking $300), netting you $150-$270.

It’s a team win that ties you to the asset’s growth, even after you’ve sold it.

Scenario 1: What If the Price No Longer Increases??

Imagine you sell your untoken for $40,000 with a 10% Reward Ratio. The new owner tries to sell, but the market’s flat or dipping—they’re stuck at $40,000 or even $38,000. Here’s the scoop:

• No Profit, No Reward—Usually: Future Rewards need a profit to kick in. If the resale is $40,000 (no gain), there’s nothing to share. At $38,000, they’d lose money, so they’d likely hold off—no reward for you. You keep your $40,000 sale price, though; FRs are a bonus, not a lock.?
• But Wait—Bear Markets Aren’t Dead Ends: Even in a declining or stagnating market, prices can spike temporarily—think “lower highs” in trader lingo. If the new owner bought at $35,000 during a dip and sold at $40,000 during a brief rally, that’s a $5,000 profit. Your 10% share is $500, split among the Flow, so you might snag $10-$20. Rewards still flow when savvy traders catch those waves!?

The system thrives on upward moves, but it’s not all-or-nothing. In bearish times, sharp buyers can still spark rewards, keeping the ecosystem alive.

Scenario 2: What If the Underlying Token’s Project Fails??

Now, the heavy hitter: the project behind your untoken (a crypto startup or NFT venture) shuts down, tanking its value. Here’s how it plays out:

• Value Tanks, Rewards Fade: If your untoken, sold for $40,000, drops to $10,000 after a collapse, a resale there means a loss—no profit, no rewards. Even a $41,000 sale (a $1,000 profit) yields a tiny $300 at 30%, split to maybe $2-$20 for you. If it hits zero and trading stops, rewards dry up entirely.?
• Market Risk Meets Mitigation: Our non-custodial setup keeps your assets yours, but it can’t dodge a token’s demise. Your $40,000 sale is your lifeline, but FRs vanish if the asset does—unless Untrading’s safeguards step in.?

This is where Untrading shines with proactive defenses—more on that below.

Untrading’s Safeguards: Protecting Your Flows?

We’ve built remedies to soften these blows, ensuring our Kingdoms—those collaborative networks—stay resilient:

1. Riding Temporary Rises: As noted, even bear markets have upticks. Traders buying low and selling during “lower highs” keep Future Rewards alive, rewarding your early faith in an asset despite broader downturns.?
2. Whitelist Wisdom: To dodge the “project collapse” trap, Untrading uses a Whitelist system. Only battle-tested tokens like BTC, ETH, LINK, UNI, and our own UN token—picked for their long-term survival odds—can become untokens. This cuts the risk of backing a dud from the start.?
3. Kingdom Treasures: Each Kingdom (our decentralized sub-communities) can whitelist its own tokens and, crucially, sets up a Community Treasure. If an underlying token dies or an untoken’s design (Reward Ratios, generations, etc.) flops and gets terminated by Flow consensus, this fund compensates affected Flow members. It’s a safety net so you’re not left empty-handed.?

These features turn risks into shared challenges we tackle together, not solo losses.

The Bigger Picture: Reduced Risk, Shared Reward?

Untrading’s magic isn’t guaranteed payouts—it’s alignment for collective wins. Our whitepaper (page 3) flips the zero-sum trap—P(A) + P(B) + F ≤ 0—into a cooperative boost: P(A) + P(B) + F + FR > 0. That FR is our shared value, but it’s zero without profit—tempered by our safeguards. You’re not bleeding cash beyond market risks; you’re betting on our ecosystem’s growth, with backup plans in place.

Tips to Navigate These Risks?

1. Diversify Your Flows: Spread untokens across Whitelisted assets and Kingdoms (we’re on Ethereum, Arbitrum One, and Polygon, with more coming). One stumble won’t topple you.?
2. Pick Winners Early: Stick to Whitelisted tokens and research their staying power—community vibes, roadmaps, and track records count.?
3. Lean on Treasures: Join active Kingdoms with robust Community Treasures for that extra cushion if things go south.?
4. Play the Waves: In bear markets, watch for dips to buy and spikes to sell—those temporary rises can keep rewards flowing.?

Got More Questions??

Swing by our docs or chat with us on X. Untrading is about building Kingdoms where we rise as one. Even if one untoken falters, our collective smarts and safety nets keep us strong.

Happy untrading, and let’s craft a future where we all thrive!