Introduction

What's DeFrag?

DeFrag is a decentralized liquidity market protocol where borrowers can use NFT assets as collateral to get an instant loan.

How is it different?

The protocol automatically insures your NFT assets with a financial instrument called a Put Option. In other words, to receive a loan against your NFTs, the protocol purchases insurance on your behalf via Put Options.
This allows you to get instant liquidity when you borrow, without waiting for another user to accept the terms of your loan. The maximum amount you can borrow depends on the value of NFT assets you have deposited and the available liquidity.

Which NFT collection will be enabled as collateral at first?

Genesis Legions from TreasureDAO.

How do you value Legions?

Initially, our oracle contract will calculate and keep track of a moving average floor price as each sale on the Treasure DAO marketplace is processed. The value of your collateral is simply # of NFTs deposited from that collection * the average floor price from the oracle.
For example, if you deposit 3 Common Genesis Legions, and the current average floor price is $1,000, the value of your collateral will be ~$3,000.
Over time this oracle will improve to provide more accurate pricing based on rarity, achievements, available bids and future gameplay revenue potential, etc.

Peer to Peer vs. Peer To Pool.

Underwriters pool liquidity to earn premium fees from the sale of Put Options without having to negotiate terms such as strike price, or expiration with a peer or counter-party.
Borrowers collateralize NFT assets to request loans and the protocol automatically calculates required Put Options to be purchased from Underwriters.

Why TreasureDAO?

  1. 1.
    Providing users with instant liquidity without loosing in-game utility of the collateralized Legion Genesis NFTs. Borrowed liquidity could be used within the Treasureverse, whether to buy more $MAGIC or NFTs in-game or cross-game. This will increase user activity across multiple projects within the Treasureverse.
  2. 2.
    Asset Stickiness: NFTs staked as collateral will reduce the selling pressure of Treasureverse NFTs and $MAGIC.
  3. 3.
    Enable an NFT rental market, which in turn will lower the barrier to onboard more new players and increase the strategies of existing players.
  4. 4.
    SubDAOs and Guilds will have another tool they can use to compete within the Treasure gameplay by developing more advanced gameplay strategies utilizing lending and borrowing.
  5. 5.
    $FRAG: DeFrag’s stablecoin, which will be used to issue and denominate the loans taken out. $FRAG will evolve to become the stablecoin of the Treasureverse, allowing for fast and more native conversions without leaving the Treasureverse ecosystem.

Benefits of using DeFrag:

  • Instant liquidity for borrowers.
  • Liquidation insurance on collateralized NFT assets.
  • Ability to utilize collateralized NFT assets in-game.

Governance.

DeFrag is a DAO from day one. We are committed to community-based governance. Each Metamatician NFT will grant 1 vote within DeFrag's governance.
Last modified 9d ago