What is MetaStreet? MetaStreet is a new style NFT Lending platform for lending and borrowing money using NFTs as collateral. Let’s find out what is special about this project with Weakhand in this article.
Before jumping into the article, people can learn more about some of the following projects to gain more knowledge about the NFT Lending market:
- What is BendDAO? BendDAO cryptocurrency overview
- What is NFTfi? Overview of NFTfi cryptocurrency
- What is JPEG’d? JPEG’d Cryptocurrency Overview
- What is OpenSky? OpenSky cryptocurrency overview
What is MetaStreet?
Overview of MetaStreet
Good MetaStreet “Automatic Tranche Maker” (ATM) is a new way to lend and borrow money using NFTs as collateral. With this design, users have full control over the terms of the loan they provide while also benefiting from capital efficiency from pooling loans with others.
There are two main subjects participating in activities on the MetaStreet platform:
- Borrower (Borrower): Deposit NFT onto the platform as collateral and choose loans with suitable terms.
- Lender (Lender): Deposit money into a Pool with terms set for Borrower.
MetaStreet is currently in version V2 with the main goal of improving the shortcomings that version V1 is experiencing including:
- Oracleless: Eliminates reliance on an Oracle for loan-to-value limits.
- Dynamic interest rate model: Replace the administrative-based fixed interest rate model with a deposit-based dynamic interest rate model.
- Permissionless: Allows users to create lending groups for any collection.
Mechanism of action of MetaStreet
MetaStreet’s operating model takes place according to the following steps:
Step 1: Lender searches for a suitable Pool then deposits ETH into the Pool for lending.
Step 2: Each Lender will have a different level of risk tolerance so this Pool will arrange all Lender positions to form a single, most competitive offer for Borrower.
Step 3: Borrower deposits his NFT into the platform and searches for the most suitable loan.
Step 4: The Borrower can return the loan at any time before the expiration date and receive his NFT collateral back.
Sale: If Borrower does not repay the loan on time, their NFT will be liquidated. MetaStreet will open a 24-hour auction to sell liquidated NFTs.
What is the MetaStreet difference?
MetaStreet’s biggest difference compared to other NFT Lending platforms lies in allowing Lenders to cooperate with each other. Lenders with a low level of risk can participate with a lower level of profit in the same loan compared to Lenders with a high level of risk tolerance, which will have a higher level of profit.
In essence, low-risk Lenders are receiving insurance from higher-risk Lenders, and High-risk Lenders are receiving profit leverage from low-risk Lenders.
Example 1: Let’s say that one CryptoPunks NFT is worth 100 ETH. There are 3 Lenders interested in the loan with different levels of risk tolerance as follows:
- Lender A wants to lend up to 10 ETH for the loan.
- Lender B wants to lend up to 30 ETH for loans.
- Lender C wants to lend up to 45 ETH for loans.
All 3 deposit into the CryptoPunks NFT Pool, then MetaStreet will distribute the deposits based on risk tolerance as follows: Lender A takes position 0 – 10 ETH, Lender B takes position 10 – 30 ETH and borrower C takes a position of 30 – 45 ETH in the loan.
MetaStreet will distribute interest rates in ascending order from Lender A, Lender B to Lender C. For example, Lender A receives 10% interest, Lender B receives 30% interest and Lender C receives 50% interest. for loan.
In cases where multiple Lenders have the same risk tolerance level, MetaStreet will rely on other parameters of the loan such as: Interest rate and loan term.
Example 2: Continuing with the story in example 1, consider a situation where there are 3 Lenders (c1, c2, c3) all willing to lend up to 45 ETH per CryptoPunks NFT. However, they offer different parameters for the loan as follows:
- Lender C1 offers loans at an interest rate of 10% with a loan term of 30 days.
- Lender C2 offers loans at an interest rate of 30% with a loan term of 30 days.
- Lender C3 offers loans at an interest rate of 30% with a loan term of 7 days.
In this case, the position of Lender C1 will be preferred over Lender C2 and C3 because he offers the most competitive terms to the Borrower and Lender C2 will be preferred over Lender C3 because of the longer loan period. In this way, Lender positions are arranged not only vertically (by price) but also horizontally (by duration and interest rate).
Regarding the issue of NFT being liquidated: As mentioned above, MetaStreet will open an auction to sell liquidated NFTs. In case, the NFT is sold for more than the principal + interest amount of the loan then 95% of the excess proceeds will be paid to the Lender where the remaining 5% will be transferred to the Lender according to risk tolerance from high to low is considered a compensation reward for Lender.
In case, the NFT is sold for less than the principal amount + interest amount of the loan, the proceeds will be paid to the Lender with the lowest risk tolerance because it will receive the money first and the Lender with the lowest risk tolerance Because the highest will receive the money last. This also leads to the situation where they will not receive 100% of the original loan amount back.
Investor
February 8, 2022: MetaStreet announced a successful call for $14M USD led by Dragonfly Capital with the participation of a number of strategic investors including: CMT Digital, Animoca Brands, Nascent Capital,…
October 13, 2022: MetaStreet announced a successful call for $10M USD with the participation of Dragonfly Capital, Nascent, Ethereal Ventures, DCG, Metaversal, OpenSea Ventures,…
Core Team
MetaStreet is developed by MetaStreet Labs with some prominent members as follows:
Conor Moore : Co Founder
- Conor graduated with a bachelor’s degree in science – finance and economics from the University of Maryland.
- Conor joined Eastdil Secured as Investment Banking Analyst in July 2017.
- In August 2019, Conor joined Rockpoint Group as a Private Equity Associate.
- Conor quit his job and joined MetaStreet in August 2021. Currently, Conor is Co Founder at MetaStreet.
James Park : Software Developer
- James graduated with a bachelor of science degree in physics from UC San Diego.
- James joined Palo Alto Networks as a Software Engineer in July 2019.
- In May 2022, James joined MetaStreet as a Software Developer.
David Choi : Building
- David graduated with a bachelor’s degree in science and business administration from USC Marshall School of Business.
- David joined Deutsche Bank as Investment Banking Analyst in July 2016.
- David moved to become COO at MatterSphere in March 2018.
- After that, David quit his job and joined MetaStreet in August 2021
Tokenomics
Update…
summary
MetaStreet is an NFT Lending platform with many innovations that give both Lenders and Borrowers the ability to optimize profits earned depending on their risk tolerance. Above is all the information I want to provide about MetaStreet. I hope everyone has received interesting knowledge.