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Overview
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Mechanism Details
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Smart contract architecture
Borrowing
In order to generate a loan on DeFrag you will need to deposit your NFT collateral into a Vault.
Why borrow on DeFrag?
- 1.Get an instant loan without having to negotiate terms with a peer or counter-party, as is the case with most existing platforms.
- 2.Get back the same NFT you collateralized. DeFrag doesn't fractionalize your NFT assets unless you get liquidated in which case the NFT is fractionalized and fractions are proportionally split between all the underwriters.
How does it work?
- 1.Select which project you would like to borrow against. (e.g. Treasure DAOs Common Genesis Legions)
- 2.Create your DeFrag NFT Vault and deposit your NFT assets.
- 3.Choose how much fUSDC (1:1 with USDC) you would like generate.
- 4.Depending on the current NFT average floor price and the amount you are requesting to borrow, the protocol will automatically calculate required Put options you would need to buy from the underwriting pool in order to insure your NFT's floor price in case of a liquidation.
- 5.Issuance and sale of NFT put options happens automatically in the same transaction as borrow. Borrowing is not possible unless a put option is purchased. You can think of this as cost of borrowing.
Last modified 2mo ago
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