How to borrow liquidity in Levvy using your NFTs 101
Levvy offers borrowers the opportunity to access liquidity promptly through a competitive lending system, enabling them to optimize their loan-to-value ratio.
With this system, lenders compete with each other to provide the highest loan amount, ensuring borrowers can maximize their borrowing potential.
What happens to my NFT when I accept a loan offer?
Once you accept a loan offer, your NFT will be locked in the Levvy smart contract as collateral. This means transferring ownership of the NFT to a smart contract that holds it securely until the loan is repaid.
After locking your asset, the agreed-upon loan amount is disbursed to you instantly.
What happens to my NFT if I fail to pay back a loan?
If you fail to repay the loan within the agreed-upon terms, the lender is able to foreclose the NFT used as collateral, and the asset(s) will be transferred to their wallet. At that point, you will not have the ability to access the asset.
With Levvy Pro, you do have the option to extend a loan on new terms in case you aren't able to pay the loan in time.
How does the protocol choose the best interest rate for the borrower?
Our team conducts a thorough analysis of loan metrics and utilizes an algorithm to carefully balance the supply and demand between lending and borrowing. This enables us to determine the most suitable interest rate for each collection, ensuring an optimal lending experience.