Links

Lending Model

Instant NFT loans through our peer-to-pool model utilizing the Black Scholes Model.

Peer To Peer vs Peer To Pool

Peer-to-peer NFT lending networks are highly inefficient. Borrowers seeking liquidity must wait for the counter party (lenders) to accept their terms. Additionally, borrowers are forced to pay interest in full even if repayment occurs before the expiration date of the term agreement. Borrowers have the option to renegotiate term agreements, however they must wait for the counter party to view and agree the proposal. At times this prolonged process causes loss of assets (liquidation). These inefficiencies led us to create an underwriting pool which enables borrowers to get instant liquidity without having to negotiate terms.

Utilizing Black Scholes Model

One reason it is difficult to take a loan against an NFT is due to the volatile nature and in some cases low liquidity of the asset. What happens if the floor collapses?
This is precisely why the protocol makes use of Put Options, where the premium is effectively the borrower's APR (cost of borrow). The ability to protect and hedge a volatile asset allows for the protocol to confidently extend loans and provide liquidity to our users. While at the same time generating yield for underwriters by passing through the APR (Put Premiums).