It feels like DeFi summer, and NFT lending is back on track. Top non-fungible tokens can be used as a collateral for loans, and the opportunities are growing. The NFT lending expansion depends on fairer loans, support for other NFT types, and composable debt.
Astaria is the on-chain NFT lending platform that aims to provide a seamless experience for DeFi user, by implementing a three-actor model to provide instant liquidity to borrowers and provide competitive yields to liquidity providers.
The three-actor model model is built around strategists, borrowers and liquidity providers. The Strategists will deploy vaults with a list of loan terms matched to supported NFTs. The terms can be continuously updated as markets fluctuate.
The Borrowers are the users that take out loans against NFTs according to loan terms provided by Strateigsts, while the Liquidity Providers earn yield on funds provided to Public Vaults.
I wrote about it few months ago, and as a follow-up I was able to test the platform before the official launch. Astaria makes it easy for owners to access instant liquidity on supported NFTs. Borrowers have the benefit of having their loans be refinanced if better terms are available.
I was instantly impressed by the smooth UI, and by the simple but efficient display. Most of the DeFi tools are going for a heavy layout, which makes the navigation difficult.
The Strategist will create terms for a specific collection and the Liquidity Providers will fill the pools. The exit of the pool is epoch based and strategists will compete for the most favorable terms for both borrowers and lenders.
Astaria was built from the ground up to provide a borrower-centric experience while maintaining capital guarantees for liquidity providers. Time consuming search for the best borrowing rate against a NFT is eliminated by the wide range of loan terms offered by Strategists.
All loans on Astaria may be permissionlessly refinanced if better terms become available. It gets even better with the FlashActions tool, as users can instantly reclaim NFTs, perform an action with it, and return it to Astaria without sacrificing your active loans.
I received the Bad Trip NFT to use it for a new loan, and played a bit with the collateral options. The NFT was used to borrow 0.1 wETh for a week. The APR for the loan was only 1%, a fine amount if someone needs quick funds. Decided to share my thoughts on a video, so check the stuff on Loom if you are interested!
This beta testing took place in the dark days of crazy gwei, and I had to comeback on a daily basis in the search for a cheap transaction. The network was always busy and the gas fee was playing ping-pong between 120 and 150 dollars. If you don't remember those days... it happen when $PEPE broke the Ethereum blockchain!
Few days later I was able to finalize my loan, but not as cheap as I wanted. What happens if you don't pay the loan? The NFT will be sent to liquidation and will be auctioned as an affordable price.
Any excess funds received in liquidation will be automatically returned to the user, after the debts are paid and a 13% liquidation fee is applied. What's your personal opinion about NFT lending?
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