Section covering the lending portion of NFTY Finance.
NFTY Finance uses a new method of lending which are referred to as "liquidity shops." These liquidity shops can be owned by an individual contributor be it a person, institution, DAO, etc. and are the key aspect of NFTY Finance's lending feature.
Upon connecting your wallet on the NFTY Finance platform, you will then be able to fully utilize the platform. Make sure you connect your wallet that has the specific NFTs you want to borrow against (Note: NFTY Finance currently only supports Ethereum at launch).
Once you have a connected wallet you will have an "account page" that will house all of your active and expired loans and liquidity shop features like loans pending approval and shop management.
After connecting a wallet, you will be able to navigate to the "lend" section on NFTY Finance. From there, you will be prompted to start the process of creating your liquidity shop with your connected wallet.
Liquidity Shop owners will have full control over the features of their specific shop. These key features within the creation process can be broken down and found below:
- Which NFT collection users can borrow against with their liquidity shop
- A maximum offer that will be allowed to be borrowed against their liquidity shop (Example: A liquidity shop owner can decide that no loans higher than $5,000 USDC can be issued out against their liquidity shop)
- The amounts of the interest rates for the different loan duration tiers of 30, 60, and 90 day periods
- Which token their liquidity shop will be handled in (Example: If a liquidity shop is opened and filled with USDC, then all loans taken out against that specific liquidity shop will distribute USDC to borrowers)
- Liquidity Shops have no capital requirements upon opening but will only allow borrowers to borrow funds that are allocated within the liquidity shop
Additional key options will be present but will be further implemented upon in future updates. These additional key options can be found below:
- Adding the ability to negotiate refinancing terms with any loans issued
- By default, borrowers will not be able to negotiate refinancing terms
- Automatically approve all loan applications
- By default, liquidity shop owners will have to manually review their loan offers and accept each individually
Once you have a liquidity shop open, you will have additional informational tabs within your account on NFTY Finance to interact with. These tabs will show pending loans and liquidity shop management options. The tab called "pending loans" will house all loans requested from user that want to borrow against your liquidity shop. You will be able to review all loans requested and manually accept or deny from the list of pending loans.
You will also be able to track all accepted loans from the tab "loan activity" and keep up with all of the information regarding these accepted loans like total payment amounts and durations of loan payback times.
Upon accepting a loan, you will receive an NFT referred to as a "promissory note." These promissory note NFTs represent the loan from the lenders side and can be traded to outside parties to transfer the loan. Once the promissory note NFT is transferred to another user, the loan that the promissory note NFT represents will also be transferred to that user, and you will no longer be the owner of that specific loan. When the loan is paid back or expires, the user with the promissory note representing the loan with either receive the funds or the NFT in the case of a defaulted loan.