NAMA Finance — How The Loan Works
Hello folks, welcome back!
Following the previous article NAMA Finance: More Than A Decentralized NFT Liquidity Protocol, let’s take one step further, and talk about something we are all interested in:
How the loan here works?
Without further ado, let’s get into it.
Roles In NAMA protocol:
In the NAMA Finance world, there are 3 types of user roles in total.
In the future Token Economy posts, we will describe in detail about Liquidity Provider, but today in this article, let’s just focus on Borrowers and Lenders, the two very important roles in our day-to-day business cases.
Following are two simple examples illustrating how Borrowers and Lenders play their parts in the loan flow.
Example 1: A good loan with full repayment:
Step1: Lenders deposit stable coins to the pool. By doing this, Lenders will get nTokens as well as NAMA tokens as the rewards.
Step2: Borrowers apply for a loan and collateralize their NFT assets.
Step3: Lenders can invest in one or more loans, or proportionally participate in the investment of listed loans.
Step4: Once the loan is fulfilled, the borrowers will be noticed and thus claim it real easy.
Step5: Upon the Borrowers repay the loan in time, they will get back their collateralized NFT assets and will be rewarded with a certain number of NAMA tokens based on the amount of the loan.
Step6: Lenders will also get back their nTokens with the interest on the other side.
Example 2: A delinquent loan:
Steps from Step1 to Step4 are the same as the above Example 1.
Step5: If borrowers failed to repay the loan in time, the collateralized NFT assets will be liquidated to pay off the Lenders.
Step6: Lenders have the privilege priority to make offers in liquidation so that they can get the defaults NFTs at a good price.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
In conclusion:
- Borrowers will get their loan fulfilled real quick by one or more lenders.
- Lenders can invest in one or more NFT loans at any time, or even proportionally participate in the investment of one massive loan, and get an attractive interest.
- Both Borrowers and Lenders will get NAMA tokens rewards by participating in the loan activity.
- NAMA Oracle will provide secured NFT assets valuation and loan risk assessment along the way.
Of course, there are more complicated cases and flows in the NAMA protocol, we will launch our application in the testing network soon, and explain more details in a real demo in the near future, please stay tuned!
