What is Efinity (EFI)? Everything you need to know about EFI Token

What is Efinity?
Efinity is developed by Enjin - An ecosystem enabling consumers and developers to purchase, sell and distribute NFT items, founded in 2009 with a network of over 20M gamers worldwided.

Efinity Website
Efinity is a parachain for NFTs that builds on the Polkadot Relay Chain. Because Efinity is also a blockchain, it has independent economic, framework, data and state.

For those who are new to Polkadot, I highly recommend reading this article below before jumping into the Efinity ecosystem.

See Also: What is Polkadot (DOT)?

In short, Polkadot is a relay chain which is responsible for the network's shared security and connecting validates to Parachains - a sovereign blockchains that use the relay chain's computing resources

Efinity Structure
Efinity’s collator nodes are responsible for processing transactions on the Efinity parachain and the network pays out EFI (its native token) from Collator Pool to them.

How the Efinity blockchain solves the NFTs trilemma
Up to date, creating NFTs on Ethereum is full of challenges due to crippling fees, inflexible smart contracts and disjointed interoperability. Thus, the development of NFTs is still limited and difficult to make real progress.

Efinity is borned to solve these problems and will be a core part of the multi-chain NFT ecosystem

Efinity Metaverse
Fees
Efinity aims to build an NFT highway, therefore its priority is to focus on the Token creation, transfer and purchase sections.

Transaction fees on Efinity are designed in the background then allow users to interact with their favorite collectibles without worrying about the fees.

Incentives
Rewards on PoW blockchains that support NFTs are claimed by miners, not by people who actually create, trade, use the tokens, and build the community. Therefore, unlike Ethereum, Efinity compensates all network participants with their native token EFI including:

Collator Nodes (Network runners and maintenance).
Users (Who govern the network).
Buyers and sellers (Price-discovery facilitators).
Developers (Project’s builders on Efinity).
Early adopters and NFT creators.
Network
Fragmented blockchains and marketplaces lead to the war of liquidity, thus hurting the growth of the digital metaverse.

Efinity will be a hub for all fungible and non-fungible tokens. It accepts any tokens from any other chain. In the future, Enjin’s Ethereum-base platform will continue to be developed and cross-chain bridges will connect both networks for full compatibility with the entire Ethereum ecosystem.

Noteworthy features of Efinity - Blockchain utilizes for NFTs
Token Standard
Enjin is building a token standard called Paratokens for Polkadot. This standard will be compatible with parachains, parathreads and smart contracts therefore, it’s interoperable with the entire Polkadot and Kusama ecosystem.

Scalability
Efinity could process up to 1000 transactions per second. Recall to another blockchain’s TPS, I will put the figures here for you to make a comparison:

Transactions are confirmed in 6 seconds, a medium number, allowing fast response times needed for mainstream applications.

Development Platform
Developers will write and deploy contracts using Ink! if they want to bring projects to Efinity. Ink! is a universal smart contract framework that is compatible with all Polkadot-based chains.

Contracts can be written in a popular programming language named Rust.

Marketplace
Buyers and sellers in Efinity are provided with a robust suite of tools for creating and filling orders for any token.

Efinity Marketplace
Ask Orders can be placed by an owner to sell their token. Placing the order will bind the token to the owner’s account until the order is filled or cancelled.

Ask Order
Bid Orders can be placed on a token ID or base ID (which includes all token IDs of the same type).

Bid Order
Price discovery mechanism
The highest active bid on any Token ID or/and Base ID establishes the best known current price for each NFT.

The highest bid on any token receives a share of fees and earns weight in the Price Discovery Pool over time for any transactions involving that token. Tokens don’t need to be listed for sale (or even exist on the network) to receive a bid. In fact, users are encouraged to maintain the highest bid on any token.

I will take an example to illustrate this mechanism:

The ability to place offers on NFTs on any network could change the way people buy things like cars and houses. You might be in search of an antique car; you find the NFT on an automobile showcase website, but the owner isn’t actively selling. Regardless, you can place a bid on the car NFT and see if the owner bites. If he doesn’t, you’ll still get rewarded for being the highest offer.

How does Efinity work?
Transaction Fee Delegation
A transaction can include a fee payer signature, which allows someone else to sign responsibility for fees before broadcasting. This is beneficial for companies and creators who want to subsidize transaction costs for their users.

Discrete Accounts
Discrete Accounts are unique addresses that can be created and operated on the parachain. They do not have an associated private key.

This address can be used in any transaction, if that transaction is also signed by a wallet (which is allowed to use the discrete account).

Transaction on discrete account
Fuel Tanks
Fuel Tanks are special discrete accounts that are used purely for transaction fees. Creators can choose to subsidize costs for their customers by depositing EFI tokens to a Fuel Tank they control.

Crafting
Crafting allows existing tokens to be modified, or creates new tokens by following a Recipe. This system is useful for gamifying collectibles with minimal effort. Anyone who has a copy of the recipe can execute it on Efinity without any coding experience.

Crafting process
Tags
Tags can be used to group related tokens (for instance, covering transaction fees for an entire game’s token collection).

Pools
Efinity creates various pool to serve these stakeholders:

Collator Pool: Distributing to active Collator Nodes and to users that vote for these nodes.
Community Pool: Granting EFI to projects that benefit ecosystem and facilitating initial development by subsidizing the project’s transactions on Efinity.
Price Discovery Pool: The price discovery process encourages users to place Bid Orders. Top bids for each Paratoken will receive EFI from this pool as compensation until their order is filled or beaten by a higher bid.
Fuel Tank Pool: Providing a replenishing source of EFI that may be used for paying transaction fees.