About Kyoko
Kyoko is a protocol that creates a lending market for non-fungible tokens(NFTs).
When the borrower deposits the NFT in Kyoko Vault and customizes the loan amount, he or she can get an ERC721 token (namely, BToken), which is used as the proof to redeem collaterals from Vault.
When the funder sends the specified amount of ERC 20 tokens customized by the lender to the mortgager of the collateral, he or she can get an ERC 721 token (namely, LToken), which is used as the proof to redeem the ERC 20 assets from the Vault, and is qualified for liquidating NFT collaterals.
How does it work?
Anyone can mortgage any NFT asset on Ethereum into the Vault to create a loan order and get an ERC 721 token (BToken), the only proof to redeem collaterals.
The order includes: the ERC20 Token and its amount to be lent, and the address and ID of the collateral.
Based on the information listed on the order, the funder can decide whether to lend the corresponding ERC20 Tokens to the NFT mortgagers or not.
When the funder lends the corresponding amount of ERC 20 assets to the mortgager, he or she can get an ERC 721 Token (LToken), which has the right to redeem the ERC 20 assets and liquidate collaterals.
How to price the NFT collateral?
As a P2P platform, Kyoo is priced by consensus between the debtor and creditor.
Who can benefit from Kyoko?
The collectors.
NFT in basic forms is of low cashability, unable to achieve liquidity quickly. Therefore, collectors can mortgage their collections in the Vault to create an order, so as to obtain liquidity. A certain amount of interest is required to redeem the collateral.
The funders.
The funder will get a certain annualized income after lending the ERC20 assets to the designated mortgager, and is entitled to the ability to liquidate the collateral.
How to liquidate collaterals?
After lending assets for a period, the funder can trigger an emergency to urge the corresponding mortgager to repay the debt.
The mortgager must repay the debt within the buffer period in case of emergency, otherwise, he or she will be confronted with liquidation. The funder has the right to initiate liquidation, and in such case, the collateral will be sent to the address of the funder.
Matters need attention:
BToken is the only proof to repay debts and redeem collaterals. Namely, anyone with BToken can repay debts and redeem collaterals.
LToken is the only proof to redeem ERC20 assets and liquidate collaterals. Namely, anyone with LToken can redeem ERC20 assets, trigger emergency, and appeal to liquidate collaterals.
About BToken/LToken
BToken/LToken is the unique ERC 721 token that comes into being at any time by using mathematical algorithms.
This means that the holder of the two tokens can re-mortgage and re-lend the tokens.
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