Banking for NFTs. Lend ETH to pools and borrow from the pool to purchase NFTs.
This project enables loan-based purchasing of NFTs. The protocol manages a set of Lever Pools which are loan pools dedicated to approved, individual NFT collections. Users can deposit their (ether) funds similar to a liquidity or lending pool and receive a proportionate stake in the pool that grows with interest payments from borrowers. Users can borrow ether from a pool to purchase an NFT of the pool’s determined collection. If the NFT price is within a set range of the collection’s fair price, the reserve requirement of the pool will still be intact, and the borrower supplies a deposit at or above the required portion of the purchase price, the loan will be originated. Borrowers are responsible for repayment with interest by predetermined payment periods over the course of the loan lifespan. Borrowers get the use of a synthetic version of their purchased NFT for the life of the loan to use according to the use case of the collection’s NFTs. The real NFT is held by the pool for the term of the loan. Liquidation of the NFT can occur if the borrower defaults or if the loan to value ratio crosses a predetermined risk threshold. The asset will be rapidly liquidated to ensure the safety of the pool’s funds. The end goal of the Lever Pool product is to provide a place where users can deposit ether where the pool’s total ether balance will never decrease.
How it's made
The Lever Finance protocol was built from the ground up, first deriving inspiration from Uniswap's v3 protocols, and then moving towards a more independent design which we felt was appropriate for the current stage of our protocol. Development started in Foundry but was later shifted over to hardhat and chai due to the difficulties of maximizing our yield from Foundry. Some new/sponsor technologies we used were chainlink and the graph. It was a really fun process playing around with the oracle contracts and grabbing off chain data on chain. It allowed us to build something automated, with compounding, liquidation, and price updates, increasing the power of our protocol. Furthermore, we used the Graph protocol to grab more granular data from the protocol activity. Learning about and using both tools proved to be a great experience. The speed at which we were able to build this project. was impressive to say the least. Neither of us had much experience tackling defi from this angle, and our growth through this hackathon was a refreshing site to see. We are definitely looking forward to continuing to work on this project post submission and hope to make something big out of it.