The pricing model

• We have considered a few models for this exercise, in particular a model very commonly used in TradFi, the Black-Scholes model.

• However, we have finally decided to choose simplicity first, and have gone for a excruciatingly simple model to start with

• We will simply define the price of the option (the Security Deposit) as a % of the current floor price of the collection

• This % is going to be fixed arbitrarily by us as we list a new collection, and it will be impacted by traders decisions as the market lives.