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Getting started

In this section, we address the most common general questions regarding the NFTfi protocol.

NFTfi is the leading liquidity protocol for NFTs.

We allow NFT owners to use the assets (NFTs)they own to access the liquidity they need by receiving secured wETH and DAI loans from liquidity providers, peer-to-peer, in a completely trustless manner. 

NFT liquidity providers use NFTfi to earn attractive yields or — in the case of loan defaults — to have a chance at obtaining NFTs at a steep discount to their market value. 

NFTfi's vision is to build a fully decentralized, permissionless, user-owner public utility, supporting the seamless financialization of NFT based economies through innovative mechanisms and highly user-friendly applications.

NFTfi currently requires the MetaMask digital wallet to connect. You can find and install it here. Then, navigate to nftfi.com and click on any tab and you will be prompted to connect your wallet. You can then navigate to the ‘Account’ tab on the top right where you can edit your account information. If you add an email address to your account, you will be able to receive email notifications.

Your NFTfi account corresponds to the connected MetaMask wallet Ethereum account. To switch, simply switch accounts in Metamask and refresh the page.

We encourage all users to list their Discord ID in their Account profile. We have a bustling community on our Discord server and that is usually where Borrowers and Lenders can find each other, discuss terms, ask further questions, get tips, ask for help in valuations or take part in NFT project/collateral discussions. 

The ability to access liquidity against their NFTs without selling the asset gives unprecedented financial flexibility to NFT holders, especially if they have a large percentage of their portfolio locked up in these illiquid assets. 

A few examples of what the liquidity obtained via NFTfi can be used for include: 

  • Serving immediate liquidity needs (e.g. covering margin positions)
  • Taking advantage of short-term investment opportunities (e.g. high-yield liquidity mining or NFT flips)
  • Taking advantage of long-term investment opportunities (e.g. buying real estate; long-term loans is now supported in NFTfi V2)
  • Delaying a planned sale of an NFT for more opportune market conditions
  • Delaying a planned sale of an NFT to defer potential capital gains tax
  • Financing ‘real life’ needs without having to sell valuable assets

Liquidity providers use their idle capital to earn attractive yield and, in case of Borrower defaults, they have a chance at obtaining NFTs at a steep discount compared to market prices. Strategies vary among liquidity providers.

NFTfi liquidity providers are typically collectors themselves and possess a deep understanding and appreciation of the NFT markets, or a specialized niche within them. Recently, more professionally operating and highly analytical individual and organizational liquidity providers (e.g. lending DAOs) have emerged.

NFTfi is a peer-to-peer platform connecting NFT holders and liquidity providers directly via permissionless smart contract infrastructure. The NFTfi team at no point has access to any asset or is involved in any way in the negotiation of terms between Lenders and Borrowers. Since NFTfi’s first loan in May 2020, we have done over $300m in loan volume spread over more than 30,000 loans, and no borrower has ever had an asset stolen. 

The NFTfi V2 smart contract system has been double-audited by two industry-leading firms (Chainsecurity, Halborn).

Here are all Halborn security audit reports:

There are no fees for borrowers on NFTfi. The NFTfi service fee for Lenders is 5% of the interest earned by Lenders on successful loans. In the case of a loan default, there is no service fee.

Yes, to simplify your loan analysis or tax reporting, you can download loan data in a CSV file: Navigate to your Account and click the Loans tab. Click the “Export in CSV” button, and you will retrieve your loan data.

NFTfi presently supports Wrapped Ethereum (wETH), USD Coin (USDC), and Dai (DAI). You can wrap regular ETH into wETH on Uniswap or many other venues.

NFTfi currently only supports the Ethereum blockchain. That being said, we have an ambitious multi-chain strategy. We will soon launch on Flow blockchain, the first step in that direction.

Yes, V2 of the NFTfi protocol supports EIP-1271, a standard way for contracts to verify if a provided signature is valid when an account is a smart contract. Our smart contracts and SDK support Gnosis Safe multi-sig, but the dApp is not yet supported.

We recommend you use desktop devices and Google Chrome browser for the best experience.

P2P and P2Pool are fundamentally different approaches to enabling NFT credit markets. The advantages of NFTfi are: 1) borrowers get higher LTVs on average (driven mainly by lender competition and diversity; there are many lenders who are offering very high LTVs / taking very high risk since they are long the collateral and don't mind defaults); 2) no auto-liquidations hence borrowers always have the option of paying back their loans until loan maturity; they can't be liquidated half-way through as it can happen on a P2Pool protocol (a P2P protocol such as NFTfi does not take any protocol risk and does not need to manage liquidity, hence does not need a liquidation mechanism).

Yes, we have a full-featured SDK, enabling developers to easily access our full-feature API and build on top of NFTfi (for instance, lending bots). You can find the SDK in our public repo. It is currently in closed beta, which means you have to request an API key to start using it via this Google form. If you have questions or want to connect to other developers building on NFTfi, join our Discord and go to the #dev-zone channel.

Yes! We have a thriving community of NFTfi Ambassadors, who are active community members that support NFTfi (and soon the NFTfi DAO) in various ways, such as through community moderation, outreach and education, content creation, and technical support. They enjoy exclusive perks and play a major role connecting NFTfi to its current and future users.

Check out the Ambassador page for more info and the application form.

Borrowing

This section addresses the most common questions regarding borrowing activities on NFTfi.

If you own an NFT from a listed collection, you can now list it as collateral on NFTfi.com. Click the ‘Borrow’ tab and find the asset you would like to list as collateral. If you have a specific loan amount, duration, and interest rate in mind that you’re looking for, you can specify those desired terms to guide potential Lenders on their offers.

Once listed, your asset will appear in the collateral section (Lend/Collateral), and Lenders can make offers against it. If you did choose to specify loan terms, a loan gets automatically executed once a Lender accepts these terms. If you listed the asset without specifying preferred terms, a loan would only get executed when you choose to accept a certain Lender’s offer. Loan offers automatically expire after 7 days if not accepted and only remain valid as long as the Lender’s wallet is sufficiently funded.

Once you accept a loan, your NFT is transferred to the NFTfi escrow smart contract (V2 contract address: 0x8252Df1d8b29057d1Afe3062bf5a64D503152BC8). The smart contract securely holds the NFT until it’s reclaimed by you upon repaying the loan or claimed by the Lender in case of failure to repay in time (loan default). Until such time, the technical owner of the NFT is the escrow smart contract, and you will not be able to use the NFT in any way while it is in escrow. We are working on implementing a rights management system that will allow you to use your NFT for specific cases while in escrow!

You can view your current loans under ‘Borrow/Loans’ and your past loans under ‘Lend/Loans’.

We highly recommend you read our borrowing guide before taking out your first loan.

Here are a few important pointers regarding repayments:

  • You can repay the loan at any time before it is due, but you still pay the full interest amount.
  • You can only repay the loan from the wallet you started the loan with, unless you mint an obligation receipt and effectively transfer your borrower rights to another wallet or someone else (obligation receipts are not yet supported by the dApp - read more here).
  • You can only repay the loan in one single repayment, i.e. not partially
  • You can request loan renegotiation at any time before the loan is foreclosed by the lender. Read more here.
  • Once you default on a loan, it cannot be repaid any longer, even if the Lender has not foreclosed yet.
  • Once a Lender has foreclosed the NFT of a defaulted loan, they become the sole owner and the loan can no longer be repaid through the NFTfi platform
  • Make sure you have both ETH and wETH in your wallet! You’ll use wETH to repay the loan, but you still want enough ETH to be able to pay for gas. 

Once you have repaid the loan in full, including interest, the NFT will be released from the smart contract (escrow) and returned directly to your wallet. However, if you fail to make payment in full before the due date, the Lender will be able to click the ‘foreclose’ button and the NFT will be moved from escrow to their wallet.

In the very unlikely event that the website is down, you can repay your loan via Etherscan. 

Yes, loan renegotiation can be initiated both by the borrower and lender on any active loan that is not yet foreclosed by the lender. To read more about loan renegotiations and how they work, please read this blog post.

Yes, you can do that with NFTfi bundles. NFTfi bundles allow borrowers to collateralize multiple NFTs more conveniently and renew or roll over multi-collateral loans quicker and cheaper. Bundles also provide more options when negotiating higher-value loans with lenders. At launch, you can bundle up to 236 NFTs into a single bundle. If you want to learn more about NFTfi bundles, please read this blog post.

NFTfi is a peer-to-peer platform and the liquidity terms are agreed upon exclusively and directly between lenders and borrowers. Several factors (as perceived by the two counterparties) typically affect loan terms, including but not limited to:

  • Current market conditions
  • Quality and longevity of the respective collection
  • Rarity of the specific NFT

Here are a few resources that might help you estimate the value of your NFT, and infer sensible loan term ranges:

  • Marketplaces such as OpenSea, and websites like Rarity Tools
  • Browsing past loans given against similar assets on NFTfi
  • Checking collection pages or individual assets to see the average APR and loan principal over the last 30 days
  • #valuation-and-appraisals NFTfi Discord channel
  • The #rockefeller Discord channel (accessible for active Lenders only)

Borrowers will pay gas fees for the operations listed below:

  • Approving NFTfi to interact with your NFT (once per NFT collection, except for CryptoKitties (CK), where it must be done for each individual cat as CK isn’t fully ERC-721 compliant).
  • Approving the NFTfi smart contract to spend (repay) wETH or DAI for the first time (this is a one-time transaction)
  • Starting a loan
  • Repaying a loan

Remember that when you begin a loan, your NFT is moved into the NFTfi escrow smart contract. Therefore the de facto owner of the NFT during the duration of the loan is the smart contract. No one (also not the NFTfi team) can access the NFT during that time.

Whether you are able to receive an airdrop during an active loan depends on the airdrop/claim mechanism. In some scenarios - the answer is no. Here are a few scenarios for your reference (please note, this list is not exhaustive):

  • If the airdrop is distributed based on a snapshot that was taken before your loan began, at a time when the NFT was still in your wallet, then your wallet will still receive it.
  • If the airdrop occurs in real-time or based on a snapshot that was taken after the loan began, then the smart contract will likely receive the airdrop, in which case it cannot be retrieved later.
  • In yield-bearing NFTs, where the claim/value is accrued "in" the NFT or "connected" to the NFT, the claim will be waiting for you once you have possession of the NFT again.

Yes! If you take out a loan against BAYC / MAYC / BAKC NFTs (or NFT bundles) while they are committed to either the BAYC, MAYC or paired (BAKC) staking pool, they keep accruing $APE rewards. While the NFTs are in the NFTfi escrow smart contract during the loan, you cannot technically uncommit them from the BAYC or MAYC pools (you need to be in possession of the NFT for that). In the case of the paired pool, you technically could uncommit them during a loan if you’re in possession of the paired BAKC, but since the BAKC only gets sent the accrued rewards, and the BAYC/MAYC gets sent all the staked $APE, your staked $APE would be forever lost in the escrow contract (so don’t do it!!). Upon loan repayment, the NFTs transfer back from the escrow smart contract into your wallet, and you are again able to uncommit the NFTs and claim all associated staked $APE and accrued rewards.

Important: If you fail to repay your loan in time for whatever reason, you lose your collateral BAYC / MAYC / BAKC to the lender, and with it, you also lose access to all associated staked $APE and accrued rewards. We therefore highly recommend to uncommit your BAYC / MAYC / BAKC before taking a loan on NFTfi (except, of course, you would be consciously borrowing against a committed asset incl. associated $APE to achieve better loan terms). Please note that the above statement is based on the ApeCoin staking specification available at http://apestake.io/ as of January 6th, 2023. Please inform yourself of any changes in the meantime.

Approvals happen at the NFT contract level. This means that once you have approved or granted NFTfi access to manage an asset, the NFTfi smart contract will have access to all of your assets minted on that contract. The NFTfi smart contract will not have access to manage NFTs minted on other contracts though. For example, if you approve a BAYC and you have multiple apes and also a CryptoPunk, our smart contract will have the ability to manage all of your apes but not your CryptoPunk. Remember - the only way for the contract to move the asset is for you to start a loan on the asset, so this can not happen automatically. 

Yes. Borrower rights are tied to an “obligation receipt” NFT, which can be optionally minted and is then sent to the borrower’s wallet. If you move the obligation receipt to another wallet address, you are effectively transferring the borrower’s rights (to repay the loan and receive the collateral back) to that address. To learn more about obligation receipts, read this article.

Lending

This section addresses the most common questions related to lending activities on NFTfi.

Proceed to the ‘Lend’ tab. As a Lender, you can browse all available NFT collateral and make (gas-free) loan offers by proposing a loan amount, duration and interest rate. Once you submit an offer, it will show on the asset's listing page. You can modify or cancel an offer any time before it is accepted. If your loan offer is not accepted it will expire automatically after 7 days. You can currently only make 1 offer on any given NFT at a time.

Once a Borrower accepts your loan offer, the corresponding funds will be automatically deducted from your account. From hereon, as a Lender, you cannot cancel the loan before it expires, it could be repaid early by the Borrower, however. 

If a loan is not paid back by the Borrower in time, the asset becomes available for foreclosure by the Lender. If you click on ‘Foreclose’ the NFT will be transferred to your wallet.

Before getting started, we highly recommend you read our lending guide.

You might find this blog article helpful in formulating your personal NFTfi lending strategy: https://nftfi.com/blog/3-lending-strategies-on-nftfi/

Lenders pay gas fees for the operations listed below:

  • Approving the NFTfi smart contract to spend wETH or DAI for the first time (this is a one-time transaction)
  • Foreclose an NFT in case of a borrower default
  • Canceling an offer on-chain (due to security reasons)

Lenders can use private offers to make a loan offer to potential borrowers for assets that are not publicly listed. Private offers can also be used by friends or parties who know each other but would like to facilitate a loan without listing an asset on NFTfi. To learn more about private offers, please read this blog post.

Standing Collection Offers or SCOs allow lenders to submit loan offers that are valid for any currently listed NFT (or that may be listed in the future) from a particular NFT collection. Before, lenders had to place individual loan offers for each individual NFT asset in a collection - now, they can target entire collections (any asset within the collection) with just one offer! There are several risks associated with SCOs, and we advise that you carefully read this blog post before placing any Standing Collection Offers!

The Rockefeller role (red-labeled names) is a special designation claimable by anyone who is currently lending on NFTfi and has an active loan (i.e. holds a Promissory Note). Rockefellers receive special privileges in recognition for promoting liquidity on NFTfi, including access to a lenders-only channel called “🎩-rockefellers” (link)

If you have an active loan — please head over to our dedicate channel #collabland-join (link) and follow the instructions there: you’ll be prompted to connect your wallet. If the system indeed detects an NFTfi Promissory Note (indicating an active loan) it will grant you the Rockefeller role. Only active lenders can claim the role. If you lost the role due to not having any active loans, you can later reclaim it when you do, by repeating the process explained above.

Yes. Lender rights are tied to a “promissory note” NFT. The promissory note is minted with every new loan and sent to the lender's wallet. If you move the promissory note to another wallet address, you are effectively transferring lenders' rights (to receive the loan repayment or loan collateral in case of default) to that address. To learn more about promissory notes, read this article.

If your loan offer has an expiry duration of less than 48hrs, it can be revoked in two ways:

  • Cancel: offer gets invalidated on the smart contract. Requires a blockchain transaction and costs gas fees. This is the option we recommend for maximum safety.
  • Delete: offer gets deleted from the off-chain order book immediately, but remains valid on-chain until it expires. Less secure and not recommended, but avoids gas fees.

If your loan offer has an expiry duration of more than 48hrs, it can only be canceled for security reasons.

Listing new NFT collections & projects

Learn how we list new collections and how you can get involved.

Listing is the process of approving specific NFT collections for use as collateral on the NFTfi platform. Users can only borrow and lend against collections that have been listed.

The NFTfi team aims to approve new collections based on a few quantitative and qualitative criteria. We plan to hand over listing decision-making to the NFTfi community sometime during 2023. For now, users can suggest new NFT collections via the following process:

1) Check if the collection matches our current general listing criteria (more or less).

  • Floor price > 0.5 ETH
  • Historical trading volume > 500 ETH
  • Sales in the past 4 weeks > 50
  • ERC-721 standard

2) Post your request in this channel and excite at least 10 people from the project's community to support your request with an emoji.

3) Once your request has at least 10 emojis, fill out the listing Google form, which will be reviewed by the team (we list every 4 weeks, with some exceptions).

Please note that we typically don't have the capacity to discuss the status of listing requests. If you follow the above process, you can trust it will be reviewed, and if it meets the criteria (incl. other security checks), it will be listed on the platform.

These are the steps that will need to be followed in order to request projects be listed:

  1. You need to fill in the listing form. This will automatically add your suggestion to the list that the NFTfi team checks on a weekly basis. If you want to speed up the process, convince a  large group of other users  requesting the respective listing via the listing form as well :).
  2. All projects will be added to our watch list, where we track projects to see when they achieve the necessary criteria.

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