Buy¶

TL;DR¶

The Buy phase gives NFT holders a standing bid, priced in $LOOP, they can sell into at any time. Since all other marketplaces price in ETH, the fluctuating exchange rate creates a buy-side arbitrage surface.

How It Works¶

2% LRT Swap Fees (LOOP)
  │
  ▼
Open Bid
  │
  ▼
Standing Offer ──→ Accepts NFT ──→ Vault Queue
  │
  │  Growth: Balance accumulates → bid increases along fixed checkpoints
  │  Reset:  After each purchase → reverts to previous checkpoint

Loophole maintains a perpetual standing bid (the Open Bid) for NFTs from each supported collection.
The Open Bid is priced in $LOOP, while NFT marketplaces predominantly price in ETH. This currency mismatch creates the buy-side arbitrage surface: the fluctuating ETH/LOOP exchange rate means the Open Bid's effective ETH value constantly shifts relative to external floor prices.

The Open Bid grows along a fixed series of checkpoints as swap fees accumulate in the acquisition pool. Checkpoints enforce linear increases, preventing the bid from spiking if a sudden surge of trading volume floods the pool. When an NFT is purchased, the bid resets to a previous checkpoint and begins accumulating again.

Anyone holding an NFT from a supported collection can sell it to the protocol by accepting that collection's Open Bid. The NFT enters the vault queue and waits for its Dutch auction.

Example¶

The $PUDGYRUN Open Bid accumulates to 600 LOOP. At a LOOP price of 0.01 ETH, that bid is worth 6 ETH equivalent. The Pudgy Penguins floor on OpenSea sits at 5 ETH.

An NFT trader buys a Pudgy on OpenSea for 5 ETH and sells it to the protocol for 600 LOOP. Converting back: 600 LOOP × 0.01 = 6 ETH equivalent. The NFT trader nets roughly 1 ETH before fees. The Pudgy enters the vault.