NFT Loan
NFT Loan service and Liquidation mechanism
Currently, NFT Collateral Loan service is not opened yet.
The users who own investment position NFT can borrow an asset against their position NFT and the QUI tokens in a specific LTV. The protocol gives a loan deducted by a borrowing fee that goes to the protocol treasury and the asset lender to the protocol. NFT lender get interest fees from protocol and get QUI incentives for a while.
Since NFT investment position has a fungible tokens representing the the shares of the vault invested, Protocol can evaluate the current discount value of NFT position with its yield not harvested yet.
A Liquidation is a process that happens when the borrower's collateral value can't cover the debt/loan value or the borrowers can't pay back his/her loan. In a liquidation, the overcollaterized asset QUI tokens are taken by protocol as a penalty which goes to the protocol treasury and the liquidators.
A liquidation is a process that occurs when value not properly covering their loan/debt value.
The criteria of LTV calculation of collateral is still on discussion. The borrowable asset should be the same kind of collateral asset for beta version so that the liquidation by volatility of collateral doesn't happen for now.
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