# NFT Redemption

**Redemption**

The NFT Redemption feature in Floor Protocol allows users to redeem a non-specific NFT from a particular collection by burning 1,000,000 µ-Tokens. For example, if a user has 1,000,000 µBAYC tokens, they can redeem an NFT from the Bored Ape Yacht Club collection. Upon redemption, these µ-Tokens are permanently burned, and a randomly selected NFT from the BAYC Vault is transferred to the user's wallet.

### **Element of Randomization**

The feature incorporates an element of anticipation by randomizing the NFT that users receive upon redemption. Similar to the experience of minting NFTs, it introduces elements of surprise and excitement into the Flooring Protocol experience.

{% hint style="success" %}
Random redemption provides users an opportunity to exchange their deposited NFT for a potentially more desirable one from the Vault.
{% endhint %}

### **Dynamic Fee Structure**

Redemption fee is in μtokens and scales with the Reserve Ratio, the fee increases as the Reserve Ratio % decreases, aiming to sustain the system's viability. However, when the [Reserve Ratio](/features/nft-fractionalization/vault/reserve-ratio.md) of the Vault falls below 20%, redeeming from the vault becomes unavailable.For specific fee rates, please refer to the [Dynamic Fees Page](/features/nft-fractionalization/vault/nft-redemption/dynamic-fees.md).

### **Diversification in the Vault**

The randomized redemption process encourages a diversified pool of NFTs within the Vault. By ensuring that the redeemed NFTs are randomly selected, it prevents the potential for the monopolization of specific, high-demand traits and promotes a more balanced and diversified ecosystem.

### **Depositing NFTs in the Vault**

Accumulate Vault Contribution Quota whenever you deposit an NFT of that specific collection in the vault which expires every 5 days and extends whenever you vault one. 

These Vault Contribution Quota can be used to waive redemption fees. For specific breakdown, please refer to  [Dynamic Fees](#dynamic-fee-structure).

| Reserve Ratio | Vault Contribution Quota |
| ------------- | ------------------------ |
| 30% -> 100%   | 1                        |
| 20% -> 29%    | 2                        |
| 10-> 19%      | 4                        |
| 1 -> 9%       | 8                        |

### **Reserve Ratio Limitations**

When RR is below 20%, normal redemptions are paused and users have to bid in µTokens to redeem NFTs from the Vault.

<table><thead><tr><th width="355">Reserve Ratio</th><th>Auction Limitation</th></tr></thead><tbody><tr><td>&#x3C; 20%</td><td>1 Auction / 3 Hour</td></tr><tr><td>&#x3C; 15%</td><td>1 Auction / 6 Hour</td></tr><tr><td>&#x3C; 10%</td><td>1 Auction / 12 Hour</td></tr><tr><td>&#x3C; 5%</td><td>1 Auction / 24 Hour</td></tr></tbody></table>


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