Lending

Frequently Asked Questions (FAQs)

LENDING POOL

There are many duplicate collections, how can I open the correct one? The best way to search for and open the correct collection as a lender is by using the contract address. You can find these on marketplaces such as OpenSea and checking if they have the "verified" blue check mark.

How to mitigate risk as Lender for volatile NFT Projects? You can set a shortened loan duration of 1 or 3 days if you think the current conditions are volatile and set a lower collateral percentage, meaning they can borrow much less than the usual 40% of LTV. We also plan to support additional features that will further mitigate risks as a Lender, for example by being able to recall a loan if the LTV drops below a certain threshold %. As a Lender, how much liquidity should I typically provide? You would need to look at the floor price, let’s say it’s currently 2 ETH. Take the LTV of around 50% which would be 1 ETH for that project. So a good start would be around 10 ETH’s which would allow around 10 loans (10 loans x 1 ETH = 10 ETH in the Lending Pool).

What does Exposure Limit mean? The Exposure Limit refers to how much (for example WETH for Ethereum) you want to expose out of your wallet at any given time.

For example, if your wallet contains 20 WETH, but you don't want to expose this entire amount for borrowers (because you might be using the wallet for other purposes), then putting an Exposure Limit is the ideal solution. If you set the exposure to 10 WETH then no matter how many borrowers take out a loan on your pool, they will never be able to take out more than 10 WETH at any given time.