What is PawnSpace? PawnSpace is a decentralized NFT collateral lending platform on Polygon that uses a Peer to Peer (P2P) lending model. Let’s find out what is special about this project with Weakhand in this article.
What is PawnSpace?
Overview of PawnSpace
PawnSpace is an NFT collateral lending platform on Polygon that uses a lending model Peer to Peer (P2P). PawnSpace supports ERC-721 NFTs and uses price data from Opensea to assist both borrowers and lenders in finding the best valuation for NFTs.
Objects participating on the platform:
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Borrower (Borrower): Use NFT as collateral to borrow a corresponding amount of money. PawnSpace mint produces 1 amount Debt Tokens represents debt.
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Lender (Lender): Accept the loan conditions and lend money to Borrower to receive interest. PawnSpace mint produces 1 amount Credit Tokens represents the amount of Lender’s credit.
PawnSpace’s mechanism of action
PawnSpace’s operating model takes place according to the following steps:
Step 1: Borrowers who want to borrow money against their NFT will first create a loan order and lock their NFT in the PawnSpace contract. Borrower sets out the conditions of the loan such as: Loan amount, interest rate, loan period, etc. PawnSpace mint 1 produces the amount of Debt Token representing the debt.
Step 2: Once a loan order has been created, Lenders can submit loan requests to Borrower.
Step 3: Borrower accepts the appropriate loan request and receives a corresponding amount of USDC. PawnSpace also mints an amount of Credit Token for Lender.
Step 4: At the end of the loan term, Borrower returns the loan and interest to the Lender to receive the NFT. PawnSpace burns Debit Token and Credit Token to clear Borrower’s debt.
Sale: At maturity and Borrower has not returned the loan, the Lender can claim ownership of Borrower’s NFT.
What is the PawnSpace difference?
There are 2 types of tokens: Debt Tokens and Credit Tokens has created a new asset class for NFT derivatives. Lender and Borrower can trade these 2 tokens to transfer debt and loans to others as soon as the loan is taking place.
For example: Alice borrows Bod’s money by pledging her NFTs on the PawnSpace platform. Alice knew she had lost the NFT because it was nearing its maturity date and was unable to return the money to Bod. Alice wants to minimize her loss by selling the NFT to Jacob, which she does by selling all of her Debt Tokens to Jacob. Jacob realized that buying back debt and selling NFTs to OpenSea could make a profit, so he decided to buy back Alice’s Debt Tokens.
However, this model still has some risks such as: Debt farming – where Borrower borrows money using NFTs, then sells Debt Tokens on the market for more money with no intention of paying it back in the first place, and sends all repayment obligations to the new owner of the debt. Therefore, PawnSpace is researching the development of a decentralized reputation scoring algorithm or mechanism to help minimize the above risks.
Core Team
Tomohiro Furuta : Co Founder
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He graduated with a bachelor of science degree from Keio University.
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He worked at Amano Corporation – a company providing time recorders and attendance management, car parking systems,… as a software engineer since April 2008.
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In September 2010, he quit his job and joined AMBICIATE company – a joint venture company operating a call center as a director.
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After that, he moved to work for Loco Partners – a platform providing booking services in luxury places as CTO.
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He decided to enter the crypto market and is now Co Founder at PawnSpace since 2021.
Investor
PawnSpace received $25,000 from project funding program on Gitcoin.
Tokenomics
Update…
PawnSpace Project Information Channel
- Website: https://pawnspace.io/
- Twitter: https://twitter.com/pawnspace
- Discord:
summary
PawnSpace has created a new derivatives market for NFT borrowing and lending activities, which is the unique point I see in this project. Hopefully the information I have provided has helped everyone understand a bit about PawnSpace.