Funft Whitepaper
  • Abstract
  • Introduction
    • Team Leaders
    • Links
  • The Funft Platform
    • Multi-Chain Compatibility
    • User Experience and Security
    • Advanced Trading Features
    • NFT-Backed Loans
  • Economic Model
    • FFT Token
    • Token Distribution
    • Revenue Distribution
    • Staking and Rewards
  • Community and Governance
    • Funft DAO
    • Governance Mechanism
  • Partnerships and Integration
    • Partnerships and Integration
    • Technical Integrations
    • Industry Influencers and Artists
    • Cross-Promotion and Marketing
  • Roadmap and Future Development
    • Future Development
    • Establish Core Functionality
    • Enhance Features and User Experience
    • Expand the Ecosystem
    • Explore Cross-Chain and Web 3.0 Integration
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  1. The Funft Platform

NFT-Backed Loans

Funft offers NFT holders the opportunity to leverage their NFT assets by using them as collateral to borrow stablecoins, enabling them to access liquidity while retaining ownership of their NFTs. This functionality is available specifically for blue-chip NFTs, ensuring that the collateralized assets have a high value and stability.

To initiate the borrowing process, users will need to select the NFT they wish to pledge as collateral. The borrowing amount will be calculated as 60% of the NFT's floor price. This approach ensures that users can borrow a reasonable proportion of the NFT's value, while also mitigating the lending risks associated with market volatility.

For example, if the floor price of an NFT is $1,000, the user can borrow up to $600 (60% of $1,000) in stablecoins. This borrowed amount can then be utilized for various purposes, such as investment in other projects, expanding business operations, or addressing immediate financial needs.

It is important to note that if the floor price of the pledged NFT drops to 120% of the borrowing amount, a liquidation event will be triggered. This mechanism protects both the borrower and the platform from potential losses due to a significant decline in the collateral's value. The liquidation price is calculated as 120% of the borrowing amount.

For instance, if the borrowing amount is $600, the liquidation price would be $720 (120% of $600). If the floor price of the NFT falls below this threshold, the platform will initiate the liquidation process to recover the borrowed stablecoins.

To ensure the security, transparency, and efficiency of the borrowing process, Funft integrates with reputable DeFi projects and lending protocols. This collaboration provides users with a trusted platform where they can maximize the value of their NFT holdings, while enjoying the benefits of decentralized finance.

By offering the functionality of pledging NFTs to borrow stablecoins, Funft empowers NFT holders with a flexible and innovative financial tool, enhancing their ability to unlock liquidity without sacrificing ownership of their valuable NFT assets. Through strategic partnerships with DeFi projects and lending protocols, Funft delivers a secure, transparent, and efficient lending platform, driving the convergence of NFTs and DeFi and propelling the growth and adoption of NFTs in the crypto world.

Last updated 1 year ago