UMBI NFT (ERC-1155)

Introduction

The UMBI NFT (FarmNFT) is an ERC-1155 multi-token standard where each tokenId represents a unique farm plot or operational right. It enables fractional ownership, transferability, and transparent distribution of farm income.

Unlike ERC-721 (single unique NFT) or ERC-20 (purely fungible), ERC-1155 allows UMBI to manage multiple farm offerings under one contract, making it highly efficient for scaling across many farms.

Attribute	Value / Description
Standard	ERC-1155 (multi-token)
Representation	Each `tokenId` = one farm plot / container with a 10-year operational duration.
Ownership	Fractional (investors can own multiple units of the same farm or different farms).
Transferability	Fully transferable on-chain and tradable on secondary markets.
Profit Sharing	Entitles holders to a percentage of farm profits (80% to NFT holders, 10% protocol, 10% escrow).
Compensation Escrow	10% of income stored for holder compensation if operations end.

How Does a FarmNFT Hold Value?

The value of a FarmNFT is tied to farm performance and operational rights, not purely on speculative hype. Key value drivers include:

Revenue Sharing - NFT holders receive a share of farm profits proportional to their units.
Time-Limited Operation - Each farm NFT has a 10-year lifespan, meaning its value declines over time.
Compensation Escrow - Provides downside protection; if the farm isn’t extended, NFT Holders can reclaim escrow, ensuring accountability.
Liquidity & Transferability - Unlike traditional agreements, FarmNFTs can be freely traded, allowing investors to enter or exit positions.

How to Get FarmNFTs?

FarmNFTs are primarily acquired through:

FarmICO (Fundraising Rounds): Investors purchase units during primary offerings to finance farm operations.
Secondary Markets: NFTs can be traded peer-to-peer or on marketplaces like OpenSea.
Protocol Incentives: In the future, community campaigns or grants may issue NFTs as rewards.

Valuation Framework

Valuing a FarmNFT requires considering both farm economics and protocol design:

Farm Revenue Projection - Expected net income over 10 years.
Bidding Price - Investors pay less than expected value to factor in risk.
Compensation Value - Escrow ensures NFTs converge toward intrinsic value if operations end.
Discounting Over Time - As years pass, remaining profit potential declines, lowering fair value.

Mathematically, the fair value of a FarmNFT can be approximated as:

V = \sum_{t=1}^{T} \frac{R_t}{(1+r)^t} + C

Where:

$V$ = present value of the FarmNFT
$R_t$ = expected revenue distributed to the NFT holder in year $t$
$r$ = discount rate (risk-adjusted)
$T$ = remaining operational years (up to 10)
$C$ = compensation escrow claimable if farm operations end

This formula combines cash-flow projection with escrow-backed downside protection, making FarmNFTs both yield-generating and risk-mitigated assets.

Disclaimer: Actual FarmNFT values can vary significantly due to external factors such as:

Operational risks (farm management, productivity efficiency)

Commodity price fluctuations (market volatility of crops)

Environmental hazards (weather events, pests, natural disasters)

Macroeconomic conditions (inflation, interest rates, demand shifts)

As such, FarmNFTs should be seen as risk-shared agricultural opportunity, not guaranteed returns.