Borrowing and Lending
The NFT Collateralized Loan System on CoDEX offers a unique way for NFT enthusiasts and holders to leverage their digital assets. By combining liquidity pools and time-locked loans, this system ensures fairness, security, and accessibility without requiring dex-owned liquidity. Here's how it works:
Core Components
— Loan Creation (404 Mechanism)
NFT owners create a 404 contract by locking their NFT into the dex.
Lenders' locked tokens are transferred to the borrower.
— Repayment Terms
Borrowers must repay 95% of the current FP of the NFT to reclaim it.
A 15% fee of the FP goes to the dex for facilitating the process.
— Interest Section for NFTs
Users can lock tokens in a dedicated section indicating their interest in specific NFTs (e.g., Fable Beras, Brained Beras).
Locked tokens must represent 85% of the current floor price (FP) of the selected NFT.
— Loan Default
Borrowers have 30 days to repay the loan.
If the borrower fails to repay, the NFT is transferred to the lender’s address.
— Time-Based Fee Tiers for Loans
A tiered fee structure is implemented to incentivize timely loan repayments and accommodate varying durations:
Short-Term (1–10 days): Lower fee (10% of FP).
Medium-Term (11–20 days): Moderate fee (12.5% of FP).
Long-Term (21–30 days): Standard fee (15% of FP).
Benefits
Dynamic NFT Utility: Unlocks liquidity without selling the NFT outright.
Risk Management: NFTs are collateralized and secured until repayment.
No Dex-Owned Liquidity Risk: Reduces dependency on centralized liquidity.
Flexibility: Borrowers choose repayment terms; lenders can diversify interests.
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