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How to use NFT Loans V2
Brace yourselves for the whole new world of possibilities unlocked by the NORD NFT Loans V2!
We are extremely thrilled to share that Nord NFT Loans V2 is now live! In this guide, we will go through each of the steps involved in borrowing as well as lending so that you can get a seamless experience of our product Nord NFT Loans V2.
Please follow this detailed guide step by step for each functionality to understand the dynamics involved. Enjoy, and experience the power of NORD NFT Loans V2 in the most exciting way. Remember to join the NORD community to drive DeFi adoption to the mainstream, as we are always excited to hear from the community.
Nord NFT Loans is supported only by Chrome and Brave browsers, and it only works on desktop with Metamask and other wallets which support the WalletConnect feature.
Let’s get started!
In a Fixed interest rate bid, borrowers need to pay the entire interest amount to the lenders even if they pay back the loan amount well within the loan period. In the Pro-rata option, the lender provides money to the borrower on a pro-rata basis which means the borrower only needs to pay back the loan amount with the proportional interest rate required.
For Example, Alex is ready to take a loan from the Bob on Nord NFT Loans platform against his NFT. Let’s say the agreed amount for the NFT Loan between Alex and Bob is $1000 at a 10% interest rate for 10 weeks. Let’s say Alex can pay the amount back with interest within 5 Weeks.
Following are the interest amount that needs to be paid by Alex to Bob in each of the scenarios:
Fixed interest rate option: 1000*(10/100) = $100 interest amount payable to Bob
Pro-rata interest rate option: 1000*((10)(5/10)(1/100)) = $50 interest amount payable to Bob
We aim to accommodate thousands of tokens to Nord NFT Loans in the future. We’re introducing multiple token support in Nord NFT Loans V2 for lenders. Now, lenders can provide money with their current token holdings to offer loans to NFT holders.
Tokens standards like ERC-20 and ERC-721 require a separate contract to be deployed for each token type or collection. This limits certain functionality by the nature of separating each token contract into its permission address. To keep up with the best practices, we are making Nord NFT Loans ERC-1155 compatible.
One of the core principles of the Nord Finance platform is to provide the best user experience to investors. We’re following our core principle and bringing you new UX improvements. Now, You can lend and borrow easily and intuitively.
Needless to say, in order to seamlessly explore NORD NFT Loans V2, the user will be required to set up a MetaMask Wallet or a wallet that supports WalletConnect with tokens available in it.
- Click on the “Connect” button located on the top right corner of the page to connect your wallet.
- Select MetaMask option to connect with MetaMask wallet.
- If you are using any other wallet which supports WalletConnect, then select WalletConnect option instead.
- Scan QR Code displayed with the wallet app and connect to an account.
- Click on connect in the MetaMask pop-up and you should be connected to the Nord Finance DApp!
You should now be successfully connected to the Nord Finance DApp! We will next take a look at the lending and borrowing process involved in NFT Loans.
- Click on the borrow option in order to begin the process of taking a loan against your NFT.
- You will then see a list of your NFTs currently supported by NORD NFT Loans V2, that you can take a loan against. Click on the “+ Loan” button on the NFT you wish to use as collateral and take a loan. Users may fill out the whitelisting form to get their NFT Collection whitelisted.
- A preview of the NFT is shown and a link to view it on Open Sea is also available. Click on the “Create Loan” option to proceed further.
- The user will then be required to sign a message to put up the NFT as collateral.
- The NFT will now be successfully listed on the marketplace for interested lenders to place a bid on. The user can later revisit to check for any new bids.
- Once any new bid of interest is available, the user can accept the same by clicking on the “Accept” button next to the bid details. This will launch a modal displaying the bid details, and the option to confirm bid acceptance
- The user is then required to sign the transaction for approving the ERC721 transfer from the user account to the NORD NFT Loans escrow account.
- This completes the borrowing process, and the ERC20 tokens will be transferred to the borrower’s account.
- At the top right corner section of the screen, the option to “Cancel Loan” is present.
- Upon clicking the “Cancel Loan” button, the transaction to confirm the same has to be signed by the user.
- Once the transaction is confirmed, the NFT Loan is cancelled and the NFT is no longer listed for bids.
- The user can choose to repay the loan at any given point in time. Under the My Loans tab, the button to “Pay” the loan back can be clicked.
- The “Pay Loan” button located next to the loan details is to be clicked. This launches a modal where the user can confirm the details of the loan repayment and click “Continue to Pay”.
- The MetaMask pop-up to first approve the spending limit for the ERC20 token is requested. Followed by which the transaction to repay the loan has to be confirmed.
- After the transactions are confirmed, the loan repayment will be successful.
- Click on the Lend option in order to begin the process of lending a loan for an NFT.
- The list of NFTs currently open to bidding is displayed. The user may click “Bid” on any NFT of interest.
- The option to “Bid For Loan” is available. Clicking on it opens a modal where the user can enter the details of the loan proposal.
NOTE: Please do keep in mind the loan is not instantly lent and is instead subject to acceptance by the NFT Owner.
- Upon clicking on the dropdown next to the token, a list of all the available ERC20 tokens is displayed. Currently, USDC, USDT, DAI, and NORD tokens are supported.
- Additionally, a checkbox is available next to the interest rate to mark it as fixed. By default, the interest rate specified is pro-rata.
Dropdown for selecting token.
Checkmark for opting fixed interest.
- Upon clicking “Submit Bid”, the user will be first required to approve spend limits on the ERC20 token. Followed by which the user will be required to sign a confirmation message.
- The Loan bid for the NFT is now placed. The user may revisit to check the status of the loan acceptance and repayment under the My Bids and My Loans tab respectively.
- Once the user’s bid is selected, it is displayed in the My Bids section.
- The process to change the bid for an NFT is very straightforward. The option to “Change Bid” is located near the Bid Details. Clicking it will launch a modal and the user can click “Continue” to confirm the user wishes to proceed with changing the bid.
- Similar to placing a bid for the first time, the user may enter the details of the bid and click on “Submit Bid” to continue.
- The user will be prompted to sign transactions. First, to cancel the previous bid. Next, depending on the spending limit approved - the user may be prompted to approve the spend limits.
- Lastly, the signature of the user is requested to confirm the new bid.
- The bid details are updated.
- The process to cancel any bids placed is very short and simple. The option to “Cancel Bid” is located on the top right of the screen.
- Upon clicking “Cancel Bid”, the user will be required to sign the transaction approving the same.
- After the transaction is confirmed, the bid is successfully cancelled.
- In case the borrower defaults and does not repay the loan in the stipulated time period, the lender may seize the NFT staked as collateral. The option to “Seize NFT” is present in the My Loans section of the lender’s dashboard.
- Upon clicking “Seize NFT”, the user is required to sign the transaction to liquidate the loan and transfer the NFT from the borrower.
- Once the transaction is confirmed, the NFT is transferred from the borrower’s to the lender’s account.