> For the complete documentation index, see [llms.txt](https://niftsy-protocol-niftsy-1.gitbook.io/niftsy/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://niftsy-protocol-niftsy-1.gitbook.io/niftsy/tech/technical-paper/protocol.md).

# Protocol

The protocol is the first element of the DAO NIFTSY, which is a formalisation of the on-chain capabilities of blockchains in a wide variety of formats.

Initially, the Protocol is created on EVM-compliant blockchains (Ethereum, BSC and others), including L2 solutions such as Polygon, and later on on other decentralised and/or distributed systems.

The protocol allows for the following NFT operations:

* Issue; 
* Wrap/Unwrap;
* Transfer (move);
* Work with collateral, where there is a dynamic (replenishable) and a static (non-replenishable) part. 

### **Protocol**

Collateral-backed and price discovery cross-chain protocol to provide NFT with inner value and liquidity. 

### **Inner value**

The guaranteed inner value is a vault containing any crypto assets of Ethereum or BSC network for MVP. The capitalization of the inner value increases depending on the pledged assets, LP tokens and with each on-chain transaction. 

#### **Smart-contracts**

NIFTSY protocol is a system of smart contracts on Ethereum and BSC networks, that provides guaranteed NFT inner value and liquidity. 

#### **On-chain royalties**

NFT authors can receive royalties in native protocol tokens from sales in the secondary market.

#### Key features of the Protocol: 

1\. With the Protocol you can emulate NFTs of any order and level of complexity; 

2\. you can also perform wrap (unwrap) operations on NFTs of any order. 

3\. In addition, you can create new NFTs through a mint operation. 

4\. Finally, you can design any convenient interest policy, whether it be royalties, bill payments (recurring payments), charity, or anything else.