What is Balloon Protocol? Balloon Protocol is a decentralized Lending and Renting platform for NFTs developed on the Ethereum ecosystem. Let’s find out what is special about this project with Weakhand in this article.
What is Balloon Protocol?
Overview of Balloon Protocol
Balloon Protocol is a decentralized Lending and Renting platform for NFTs developed on the Ethereum ecosystem.
Balloon Protocol was built with the intention of making it easy to both lend and borrow NFTs. Borrowers specify the terms on which they are willing to lend a given NFT including:
- Valuation – The value of NFTs.
- Interest rate – Calculated at a rate over the loan period.
- Loan term – The period of time during which a borrower can repay their loan without fear of liquidation.
- Collateral Ratio – Multiplied by valuation to determine the collateral requirement for the borrower.
Borrowers are expected to receive loans with the most favorable parameters, so a trade-off exists in which lenders must weigh their risks and benefits. Lenders can protect against downside risk by assigning a larger collateral multiplier, as if the NFT price is higher than the value of the collateral provided then the borrower will be liquidated. their loan. In the event of a borrower default, the lender can seize all collateral provided.
Currently, borrowers can only deposit ETH as collateral, but Balloon Protocol plans to add ERC20 tokens such as: Dai,… in the future.
What is the difference between Balloon Protocol?
Balloon Protocol introduces many methods for users to access the platform such as:
- Lend: Ballon Protocol makes it easy for users to earn passive interest on their NFTs. By simply sending an NFT and specifying a few parameters, lenders can earn interest on their NFTs.
- Borrow: Borrowers use ETH as collateral to borrow NFTs. Borrowers can return any NFT with the collection to repay their loan.
- Short: By borrowing and selling immediately and buying back later, Balloon Protocol effectively allows NFTs to be shorted.
Core Team
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Investor
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Tokenomics
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Information Channel of Balloon Protocol Project
summary
Balloon Protocol enables users to borrow or borrow NFTs by using ETH as collateral, which partially reduces the risk for both borrowers and lenders. Hopefully the information I provide in this article has helped everyone understand somewhat about Balloon Protocol.