Opportunities by NEND
NFT owners can borrow against the value of their NFT whilst retaining ownership of the asset.
If you have bought an NFT that you want to hold on to because it has rights associated to it you wish to retain but at the same time it’s of no practical use, NEND protocol will allow you to utilize its value and take opportunities for more returns in several ways, such as reinvest timely undervalued assets or highly profitable NFTs.
Many owners view NFT ownership as a long-term investment but would like to make short term better use of the asset. No NFT is the same so the reason for different stakeholders participating in this ecosystem will be many and varied. All operations will be governed by smart contracts defined by a democratic governance process, like many you can see working today in the Defi community. While lenders in the protocol can earn a yield through providing liquidity and through the process of assessing risk and value, ‘curators’ in the network can earn NEND tokens for performing ‘curation’ (the process of defining an NFT $ valuation).
NEND Protocol specially enables participants to refinance or monetize their various illiquid assets.
In several sectors of the defi protocol, various assets remain illiquid in the form of deeds, notes, or bonds. These assets typically take a long time to sell or can be structurally complex because the underlying sources of cash flow can be hard to discern. There may be time or costs associated with the conversion to cash that could impact the final amount.
Borrowers getting a loan by collateralizing their NFTs can issue ‘Trust deeds’ while lenders offering a loan receive ‘Promissory notes’. Also, stakers who stake assets and get rewards in escrow can also issue EABs(Escrowed Asset-Backed Bonds). The value of such illiquid assets is possibly lower than that of an intrinsic asset that is readily marketable. Trading these assets on the market can produce sufficient cash flow in the ecosystem. Through this secondary market, you can have a huge opportunity of managing risks and amplifying yields by trading illiquid assets.
Reducing the risk
NEND protocol is a cross-chain NFT leveraged lending platform, allowing all participants to reduce the risks of losing the value of their assets while increasing the possibility of higher profit.
There are 3 ways of reducing the risk in the platform.
Firstly, lenders are able to take lower risks by up to a third using leverage lending, yet enjoying bigger profitability. The rest risk is shared with the pool, reducing it down to 1/n.
Secondly, borrowers are able to get free from the risk of losing their collateralized NFTs by having the ability to issue and sell trust deeds against the assets before the loan expiration date.
Thirdly, stakers don’t have to worry about frozen escrowed assets anymore because they can now issue EABs(Escrowed assets Bonds) and monetize them anytime. They are also able to enjoy the rewards and interests from indirect-low risk lending and are even protected by the insurance fund of the platform.
The platform also has a valuation process called ‘Curation’ where the participants, called curators, can join the valuation process of NFT holders’ loan requests by using VPCs(Voting Power Cards), receiving a part of the interests. They are also able to bet the VPCs on the result of each curation if they want to test their luck.
Please stay tuned for more information and further updates.