FAQ
Frequently asked questions.
How does NFTY Finance work?
You can create a liquidity shop to provide money for people to borrow against with their NFTs, for example a Pudgy Penguin, which would allow you to then collect interest and principal for the loan. If the borrower doesn't pay back the loan you would receive the Pudgy Penguin NFT. Each liquidity shop is equal to a small small pawn shop with the intention of loaning money for NFTs. Individuals, groups, or even DAOs can pool funds to open their own liquidity shops.
Which chains does NFTY Finance support?
At launch, NFTY Finance will only support Ethereum.
Will platform expand to new chains in the future?
Yes, NFTY Finance has plans to expand and function across as many chains as possible, and is one of our top priorities.
Does NFTY Finance charge any fees?
All loans will include a 1% NFTY token fee meaning the borrower will need to buy an amount of NFTY to borrow against an NFT. This fee is called the "Loan Origination Fee." 70% of the LOF goes directly to the lender on loan issuance, 20% goes to the NFTY Finance platform, and 10% goes to the borrower once they pay back their loan. If they don't pay back their loan, then the NFTY Finance platform receives the 10% instead.
How secure is the NFTY Finance platform?
The NFTY Finance will look to provide as many safety precautions as possible, and the platform will also be officially audited.
You can find more information about the audit and smart contracts below:
Which tokens does NFTY Finance support?
At launch, any ERC-20 token can be deposited into a liquidity shop to be borrowed against.
What is the advantage of NFTY Finance compared to similar platforms?
The biggest improvement with NFTY Finance over similar platforms is the concept of a liquidity shop versus peer-to-pool lending.
In a peer-to-pool lending protocol, there are health scores that alert when an NFT is near liquidation. These liquidations happen as a result of the pool being at risk if the price of the token goes down, as well as the prices of the NFTs in the loans. In the NFTY Finance model, users can't get liquidated. The user either pays back their loan, sells their promissory or borrower note to someone else that wants to buy the loan as a lender or a borrowers, or defaults on the loan in which they would lose their NFT to the liquidity shop.
Also, liquidity shops heavily benefit lenders in that they allow borrowers to bring offers to the shops based on the terms they are searching for. This is a much more convenient method than having to find individual users that want to borrow against an NFT and that will accept your offer as a lender.
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