🙋Borrower

The Borrower can deposit their NFT as collateral for a loan. Borrowers can also set a Buy-It-Now price on their NFTs deposited as collateral, allowing a 🧑‍🎨Collector to instantly purchase them and close out the loan. Alternatively, a Collector may make bids on NFTs deposited as collateral, and the Borrower may accept those bids to close out their loan at a profit.

Loan Parameters

Loan Denomination

Loans are denominated in 🖼️NFT Index Token, the index token representing fractional ownership of the 🔓MarketVault; loans made by the protocol are insulated against broader market volatility, with Loan-to-Value (LTV) ratios only changing when collateral values move against the NFT market as captured by the index.

Loan Length

Loans remain open for as long as the collateral value remains healthy relative to the principal.

Loan-to-Value Ratio

Initially, LTVs will top out at seventy-five percent (75%). This can be changed via governance.

Interest

Interest accrues on the principal owed and is settled at the closure of the loan. 📈Interest Rates are determined according to the Interest Rates model.

NFT Sale Mechanics

Each sale made from the Marketplace incurs a two percent (2%) spread from the sale value.

Buy-It-Now

Borrowers have the ability to set a Buy-It-Now price on their NFTs deposited as collateral. The listing price is denominated in 🖼️NFT Index Token and must be set to a value higher than the outstanding loan plus accrued interest. This allows for the loan to automatically be closed out if a 🧑‍🎨Collector purchases the NFT. The $NFT collected from the sale is then claimable by the borrower.

Bids

A 🧑‍🎨Collector may also bid on NFTs that are put up for collateral as long as the bid amount exceeds the outstanding loan value. Bids are active as long as the amount continues to exceed the outstanding loan value and remains the highest bid. A Borrower can choose to accept the active bid to close out the loan and collect potential profit.

👻 Liquidations

Liquidations cause the collateral to no longer become Reserved, allowing it to be claimed via the 🎰Redemption Mechanic.