In this announcement, we’ll introduce our upgraded P2P NFT lending platform and how it improves upon our previously released version.
Here’s what you need to know:
- Kyoko’s P2P NFT lending platform now provides lending pools for more NFT collections and is not limited to blue chip NFTs.
- We’ve overhauled our P2P NFT lending platform with safer lending parameters and a new health score.
- This upgrade offers endless opportunities for community governance.
- We acquired Hasai and all of its technology IP.
- Kyoko’s testnet P2P NFT lending platform: https://ptpv2.kyoko.finance/.
- How to test Kyoko’s updated P2P NFT lending platform: Tutorial.
- Learn more about the protocol: Kyoko Docs.
Well, dear Kyokoans, we’re back in touch with more news. They say that bear markets are for building — and that’s exactly what we’ve been doing. We’re so excited to announce that our P2P NFT lending platform v2 launch is officially here!
About Kyoko’s Updated P2P NFT Lending Platform
We’ve made some pretty big changes to our P2P NFT lending platform technology. While the protocol may have changed, our overall objective remains the same:
Our P2P NFT lending platform 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 P2P lending protocol in order to access liquidity.
As you may remember, our original P2P lending platform matched lenders and borrowers to release liquidity for NFTs. Users with NFTs on hand that had funding needs could provide their NFTs as collateral on Kyoko’s P2P lending protocol to borrow funds. The platforms allowed users to customize the loan amount, interest rate, and loan period. Once an agreement was reached, the Kyoko platform acted as the executor and issued a smart contract with the user-customized criteria.
We then upgraded our lending protocol from peer-to-peer to peer-to-pool, through which users could obtain instant liquidity for their blue chip NFTs.
Why we’re refreshing our protocol
So, the question must be asked, ‘why are we upgrading our tech again?’ Great question.
Opportunity 1: Expand inclusivity
We’ve improved upon current NFT lending protocol limitations and allowed for multiple NFT collections to participate in the lending protocol — not just blue chip collections.
Our upgrade to a peer-to-pool protocol effectively meant that we needed to create individual lending pools for each collection that we supported. While this was a dramatic improvement from a peer-to-peer protocol, this still created significant limitations. It would be difficult to find adequate liquidity to fill an individual lending pool; at the same time, blue chip NFT holders only represent a narrow segment of the entire NFT market and therefore acquiring platform users would be challenging.
So, we put our heads together with the rockstars over at Hasai and put together a solution that we consider pretty dang good — why not maintain our single pool system for blue chip collections, while creating a single ‘shared’ pool for emerging collections that have significant liquidity behind them but are still fighting for that coveted blue chip status.
Through a shared pool, we can now provide support for many more collections while spreading any price volatility or risk of failure from a single collection across a diverse ecosystem of NFT projects. Isn’t diversification beautiful?
This shared pool also gives more opportunity for community participation in the Kyoko ecosystem, but we’ll come back to this in a minute.
For our testnet, we’ll provide support for the following collections:
- BAYC, MAYC, CryptoPunks, Azuki, CLONE-X, and Doodles
- Cool Cats, CrypToadz by GREMPLIN, VeeFriends, and I am EMPOWERED by Power of Women x Man City
For our mainnet, we’ll initially (see Opportunity 3 below) provide support for the following collections:
- BAYC, MAYC, CryptoPunks, Azuki, CLONE-X, and Doodles
- Meebits, Moonbirds, and Otherdeed for Otherside
Opportunity 2: Improve the lending risk control model
“Improve the lending risk control model” may make your eyes glaze over, but effective risk control is the core of every and any successful blockchain or financial protocol.
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 platform 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.
In our protocol upgrade, we have now included a ‘health score’ liquidation mechanism that also accounts for the relative effect that NFT price volatility brings to loan default risk.
The health score calculates the safety of a user’s deposited NFT against the borrowed ETH and its underlying value. The higher the score is, the safer the user’s loan is against an automated platform liquidation event.
For example, should a borrower’s health score drop below 1, this shows that the value of a borrower’s collateral no longer sufficiently covers their loan/debt value. In simpler terms, if Sergey borrows 30 ETH and uses his BAYC ape as collateral when BAYC floor price “FP” is 60 ETH, he will have a health score of 2. Should a black swan event occur and the BAYC FP drops to 30, the health score of Sergey’s loan will drop to 1. Should his health score drop below 1, his loan will be liquidated and his ape will be taken to auction. The proceeds of the auction will then be used to repay the loan.
Opportunity 3: Increased community governance
Kyokoans, you’ve been asking for more utility for the $KYOKO token for ages. We’ve always told you that it’s coming — and our upgraded P2P NFT lending platform is just the beginning.
Our P2P NFT lending platform was built with $KYOKO token holders and stakers in mind. Our upgraded platform will rely on governance votes in the following areas:
- Adding NFT collections to the shared pool.
- Setting operational and lending parameters, i.e. which collections should be considered blue chip vs. emerging.
- Updating lending parameters like interest rates for individual collection pools.
In addition, token holders will also earn a share of platform revenues. Specific percentages can be voted on and confirmed by DAO vote.
Opportunity 4: An additional token for a more powerful platform
We acquired this platform from the Hasai.xyz team. As such, it has been adapted for $KYOKO token holders but also has another native governance token called veToken as well. The platform veToken will not be listed on a secondary exchange and solely be used as a governance token. The primary purpose of the token is to incentivise liquidity providers on the P2P NFT lending platform as well as increasing the opportunity for users to participate in protocol governance.
veTokens can be obtained by platform voting and staking.
How to test Kyoko’s updated P2P NFT lending platform?
We’ve officially launched the updated P2P NFT lending platform testnet on our official site: https://ptpv2.kyoko.finance/. After that, it’s just a simple matter of following these simple steps in our P2P NFT lending platform guide.
Well, that’s it for now, Kyokoans. We’re STOKED about the new powerful capabilities in our updated P2P NFT lending platform. We can’t wait to hear your feedback, too.
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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