Kyoko
  • Kyoko Introduction
  • HOW IT WORKS
    • Peer-to-Pool NFT Lending Platform
      • P2P NFT Lending Introduction
        • As Lenders: Earning Interest
        • As Borrowers: Get Instant Loans
        • NFT as the collateral
        • NFT Price Discovery
      • Who can create the pools?
        • The Blue-Chip Pools
        • The Shared Pool
      • Risk Models: Health factor or Time-based
        • Risk Framework
        • Dual Rates
        • NFT Risk Parameters
      • Pending Liquidation
        • Auction liquidation
        • Bad Debt
      • Security and Audits
    • Cross-Chain GameFi Assets Lending(CCAL)
      • How to use Cross-Chain GameFi Assets Lending?
      • FAQ for CCAL
  • TOKEN
    • Token distribution
    • Understanding $KYOKO in P2P NFT Lending
      • Staking (Shared income)
        • Staking your $KYOKO
        • Claiming shared income
      • Voting
        • Vote Locking
        • Governance Mechanism
        • Snapshot
        • Proposals
    • Vesting
    • Stake
      • Liquidity Mining
      • How to start staking?
    • Business Model
    • Governance
      • KRCs
      • KIPs
      • Governance forum
      • Voting(Snapshot)
  • Roadmap
  • Security and auditing
  • Contact
  • DEPLOYED CONTRACTS
    • P2P NFT Lending
    • Cross-Chain GameFi Assets Lending(CCAL)
  • TEST
    • P2P NFT Lending testnet
    • Cross-Chain GameFi Assets Lending(CCAL)
  • COMMUNITY
    • Twitter
    • Telegram
    • Discord
    • Medium
    • Github
    • TERMS OF SERVICE
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  1. HOW IT WORKS
  2. Peer-to-Pool NFT Lending Platform
  3. P2P NFT Lending Introduction

NFT as the collateral

NFT as the collateral

Kyoko protocol enables NFT loans through the pooling of funds. Each loan is secured by an NFT collateral acting as a risk mitigation tool against default.

Given the specificities of Kyoko’s evaluation model, the selection of NFTs has been performed with the following constraints:

  1. Each additional NFT will slightly increase the gas cost of the borrow and repay actions permanently. The currency must be included in the smart contract, adding complexity and thus costs.

  2. Each NFT added to Kyoko protocol as collateral increases the protocol risk of insolvency. From a financial perspective, the assets of Kyoko Protocol are the collaterals, while the liabilities are the loaned amounts. The underlying floor price of assets and liabilities often differ, with loans mostly taken in ETHs and backed by volatile NFTs. This means the protocol is heavily exposed to the failure of supported token systems as well as market fluctuations.

  3. A centralized NFT accepted as collateral exposes the protocol to its centralization risk. The single point of failure risks of underlying currencies flow into Kyoko Protocol.

  4. Collaterals are the assets of the protocol. To remain solvent, these assets must remain greater than the liabilities, the loans.

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Last updated 2 years ago

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