According to a recent Twitter post by 0xngmi, the anonymous creator of DefiLlama, a decentralized finance (DeFi) project aggregator, a Non-Foldable Token Borrowing and Lending (NFT) smart contract token called “LlamaLend” is nearing completion. The protocol aims to address the issue of NFT holders who need to have liquidity in holding their digital assets, and is primarily aimed at small groups of NFTs.

The LlamaLend GitHub project page says, “If a holder needs money because of a good opportunity, all they can do [right now] is sell NFT products.”

According to the GitHub page, LlamaLend will allow users to deposit NFTs, get a server-signed speed certificate, and lend ether (

point down

) up to one third of the minimum value for NFT. Users can repay the loan at any time, and interest will only accrue on the time spent. The loan will have a fixed interest rate based on the rate of use of the pool.

0xngmi writes that the pools in LlamaLend will not have a built-in filtering system. Instead, the liquidator is the owner of the NFT group – he has the right to decide how to deal with bad debts. Examples include holding an auction for NFTs or renewing payment plans. Despite this, 0xngmi offers a late payment surcharge measured linearly at 100% of the loan amount every 24 hours to prevent repayment.

The protocol will also use a one-query oracle system to determine the price of an NFT loan, rather than later. 0xngmi says the move will be most cost-effective for NFTs with very little credit, as they don’t have to constantly update the network’s prices.

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NFT lending protocols have suffered recently as the bear market has stripped much of the liquidity. One project, BendDAO, went into crisis after rising interest rates on leveraged loans led many users to simply opt to forgo NFTs instead of repaying loans, leading to a bad debt spiral.

Source: CoinTelegraph