Lending protocol using NFTs as collateral differentiating itself from the competition by offering better LTV and instant borrowing.
Polypus project is a new decentralized lending protocol. At its core, it is a fully permission less way to get a loan, using your NFTs as collateral. Even if this idea is kinda crowded at the moment, we as users feel frustrated by the mechanisms available today. The hard question here is how to value NFTs. Some platforms use oracles on the floor price of collections and divide this number by 3 to determine a safe LTV for lenders to use on forks of aave or compound. Some other platforms use user to user négociations to find better terms, which is very asynchronous and inefficient from a protocol or time-consuming perspective, but offer a better LTV. We believe that getting supplier liquidity in protocols is not the hard part in lending protocols, getting borrowers to take loans is. So we are focused on the borrower experience. We offer instant loans at a great LTV for a large number of NFT collaterals. To achieve this, we ask suppliers to provide liquidity ahead of time on categories of assets such as alien punks of rare bored apes. To achieve a good LTV suppliers are in competition in a free market : they have to choose the LTV they are confortable with. The protocol builds an offer book in the contract from best to worst LTV for a given loan duration. When someone borrows, he just takes the best offers in the order. We need no oracle, nor liquidations. If a borrower doesn’t repays before the due date, his assets are sold in a dutch auction. The last part of our borrower-friendly experience is that borrowers enjoy a fixed interest rate. Suppliers get interests only if they’re offer were good enough to be automatically taken. To make the loss of bad offers not too bad, their liquidity is supplied on classical lending protocols aave and compound.
How it's made
We used: - forge-foundry as the framework for the contracts developement. - The contract uses OpenZeppelin libraries for token managements. - We use a lot of inheritance and in-house libraries to make the code clearer and modular. - We used foundry to develop a lot of solidity-based tests, including some fuzzing. The front-end is built using react and deployed on fleek, to be available through ipfs. - We integrate compound on ethereum mainnet and aave v3 on Polygon and Arbitrum so the liquidity no loaned gains some yield. - Polygon and Arbitrum allows us to be cost-effective for users. Arbitrum as a L2 allows users to bridge NFTs from L1 to get loans with cheap gas costs on L2. - We integrate wallet connect to have a great user experience through moralis SDK.