In this announcement, we’ll introduce the Kyoko P2P NFT lending protocol mainnet and what the launch means for Kyoko going forward.
Here’s what you need to know:
- Kyoko’s P2P NFT lending protocol is now live on mainnet after passing its audit by Peckshield. Audit report available here.
- The protocol offers a liquidity solution for illiquid NFT assets. Its differentiator lies in its shared pool that brings liquidity to emerging collections. It also employs safer lending parameters with health score and time-based liquidations.
- The protocol will launch initially supporting a CryptoPunks pool. Support for new collections can be voted in via governance votes.
- Experience the protocol: https://ptp.kyoko.finance/.
- Learn more about the protocol: Kyoko Docs.
Well, dear Kyokoans, we’re excited to announce a significant milestone that marks a new chapter in our journey. After more than two years of development, multiple testnet events, and an intensive security audit, we’re proud to launch our final product — Kyoko’s P2P NFT lending protocol!
About Kyoko’s P2P NFT lending protocol
Kyoko’s P2P NFT lending protocol aims to bring liquidity to the traditionally illiquid NFT market. Users with NFTs on-hand may have funding needs, and they can provide their NFTs as collateral to Kyoko’s Peer-to-Pool lending protocol in order to access liquidity.
Our protocol maintains a single pool system for blue chip collections, while creating a single ‘shared’ pool for emerging collections that have significant liquidity behind them but still lack adequate liquidity solutions. Through a shared pool, we can now provide support for many more collections while spreading price volatility or risk of failure from a single collection across a diverse ecosystem of NFT projects. Shared pool collection eligibility will be proposed and confirmed by $KYOKO governance votes.
For the mainnet launch, Kyoko’s P2P NFT lending protocol will initially support the following collection. Support for additional NFTs collections will be added over time according to governance votes.
We previously employed a time-based liquidation mechanism — essentially, the relative risk of loan default increased as a user approached his/her loan maturity date. This makes sense; after all, users that repay their debts earlier are considered lower risk than those that wait. However, this criteria alone forms an imperfect risk evaluation system.
Kyoko’s P2P NFT lending protocol now employs two key risk variables — time-based liquidation and ‘health score’ liquidation — to construct an effective and diversified risk evaluation mechanism that minimizes lending risk exposure. Time-based liquidation occurs when a user fails to repay a loan by the loan’s maturity date, while the health score calculates the safety of a user’s deposited NFT against the borrowed ETH and its underlying value. Therefore, the relative risk of loan default increases as a user approaches his/her loan maturity date and also accounts for the relative effect that NFT price volatility brings to loan default risk. The higher the score is, the safer the user’s loan is against an automated protocol liquidation event.
The protocol also provides opportunities for increased community governance. $KYOKO token holders will earn a share of protocol revenues, the percentage of which can be voted on and confirmed by governance vote. The protocol will also rely on governance votes in the following areas:
- Adding NFT collections to blue chip pools and the shared pool.
- Setting operational and lending parameters, i.e. which collections should be considered blue chip vs. emerging (individual vs. shared pool support).
- Updating lending parameters for individual collection pools.
Finally, the protocol provides governance support for two tokens: $KYOKO and $veKYOKO. The protocol $veKYOKO token will not be listed on a secondary exchange and solely be used as a governance token. The primary purpose of the token is to incentivize liquidity providers on the P2P NFT lending protocol as well as increase the opportunity for users to participate in protocol governance. $veKYOKO can be obtained by staking $KYOKO tokens and will be rewarded with higher weight in governance votes.
Governance votes will be conducted on Snapshot and will provide weighted votes according to both $KYOKO and $veKYOKO token holdings. More information on votes will be released in the official Kyoko Discord shortly.
Experience the Kyoko P2P NFT lending protocol
We’ve officially launched our P2P NFT lending protocol mainnet on our official site at https://ptp.kyoko.finance/. On it, users can either receive liquidity for supported NFT collections or provide liquidity as LP depositors.
To learn more about the protocol and the opportunities it brings, visit our Docs at https://docs.kyoko.finance/how-it-works/peer-to-pool-nft-lending-platform.
We appreciate all of your support over the years, Kyokoans. It’s been a long journey and we’ve come far. We’re proud of all that we’ve accomplished and are excited for the milestones still to come. As always, let us know any questions or feedback in our official Kyoko Discord.
Kyoko addresses the most challenging issues in Web3. Kyoko’s cross-chain asset lending platform solves the persistent issues limiting the GameFi market, including the rising cost of entry and siloed in-game assets across different blockchains. Kyoko’s P2P NFT lending platform expands inclusivity and access to liquidity for NFT projects and holders through its decentralized fixed-rate NFT lending protocol. The $KYOKO token launched in April 2022.
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