Arcade is known as one of the leading NFT Lending platforms on the market today. Recently, the project announced the launch of Arcade V3 version with some outstanding updates. Let’s learn and evaluate Arcade V3 with Weakhand in this article.
Before jumping into the article, everyone can refer to some of the following articles to better understand.
- What is Arcade xyz? Arcade xyz cryptocurrency overview
- NFT Lending: Models, Efficiencies & Opportunities
What is Arcade?
Arcade is an NFT Lending platform that applies a Peer to Peer (P2P) Lending model that allows users to use NFTs as collateral to borrow a corresponding amount of ERC 20 tokens.
Arcade is built on top of Arcade Protocol. This protocol uses structured digital signatures to authenticate loan terms from borrowers and lenders, and settle loans on-chain. This approach helps ensure that loans are safe and trustworthy due to the legacy of Ethereum security.
How Arcade Works
Arcade’s operating model is quite simple and takes place according to the following steps:
The model works on Arcade
Step 1: Borrower creates an Asset Vault and deposits one or more NFTs into the Vault. They then set the terms of the loan on Vault such as: term, interest rate for the loan,…
Step 2: Lenders search for Vaults that match their criteria on Arcade. The Lender can then accept the borrower’s offer in Vault or make a loan offer.
Step 3: After reaching an agreement between Lender and Borrower. Lender deposits his tokens into the Vault and receives interest.
Step 4: Borrower then returns the tokens + interest to the Lender and receives his assets back.
Note: Borrowers can repay their loans at any time as long as they are due.
Sale: Liquidation does not take place on Arcade. Borrower can negotiate with Lender to extend the loan or Lender will have the right to request ownership of Borrower’s Vault again.
Looking Back at the Journey From Version V1 To V3
Arcade V1 was launched in February 2022 as a test case for NFT holders and lenders, providing liquidity to illiquid assets. In six months of implementation, Arcade V1 has facilitated more than $15M USD worth of loans. Also while V1 was gaining momentum, the team released Arcade V2 version in August 2022.
Arcade V2 introduced a series of Arcade-specific enhancements including instant liquidity, secure airdrop loans, and lending incentives across the entire collection. It is built on a highly adaptable architecture where loans are represented by the NFTs themselves.
To date, Arcade V2 has achieved over 120M USD in revenue and similar to V1, the development team found an opportunity to improve the V2 protocol, leading to the creation of V3 and the launch of a file immutable version. Focus on the latest security.
What’s Special about Arcade V3?
What’s special about Arcade V3?
- With Arcade V3, NFT holders can now accept loan offers on an NFT without depositing the NFT into the Vault, minimizing and simplifying the on-chain lending process.
- This Arcade V3 version is an immutable set of Smart Contracts that cannot be upgraded or modified on-chain. This reduces errors encountered in V2 and ensures permanent access to the protocol for users.
- In this V3 version, gas fees have been improved and are 20% less than the Arcade V2 version.
- In a major change from V2, Additional Collections and payable tokens will be whitelisted on-chain. This means that the community can now participate in the whitelist without going through an intermediary.
- Borrower/Lender note images in the loan and Vault Key NFT are now stored on-chain.
- Arcade v3 also introduces multiple levels of fees payable throughout the life of the loan and the ability to delegate fees to wallets or the protocol itself.
Although Arcade V3 has launched and is now available to use, users are not required to migrate from V2 to V3 if they do not want to. The Arcade V2 version is always active and can still be accessed in the future.
Additionally, Arcade also provides a seamless way for users to transfer loans from V2 to V3. Lenders can now make offers to move any active loan to V3 using Arcade’s rollover mechanism. At that time, the V2 loan will be repaid and the new loan will be minted on the V3 protocol.
summary
Arcade V3 has brought new improvements that help fix security issues and make it easier for users to borrow and lend on Arcade. Hopefully the information provided in this Arcade V3 review has brought users useful knowledge.
