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Introduction to Taker Protocol
Taker Protocol is a decentralized lending protocol specifically designed to support novel assets, with a current focus on RWA (Real World Asset) and NFT (Non-Fungible Token). The protocol offers customized lending models tailored to the unique characteristics of these assets.
For Real World Asset, Taker Protocol adopts a perpetual peer-to-peer lending model with no expiration, allowing lenders to initiate liquidation at any time. This model does not rely on oracles. Currently, the primary support is for NFT-based RWA. Taker Protocol allows for different interest rate models for different collections, including fixed interest rates and customizable interest rates. Lenders can quote for NFT collections or individual NFTs they are interested in, and borrowers can select and accept quotes. During the liquidation period, borrowers can transfer their debt to a lender with a higher quote at any time.
For NFTs, Taker Protocol employs a pool-to-pool lending model, which is a highly capital-efficient multi-collateral lending pool. The model references the floor price of NFTs to determine the value of the collateral and mainly focuses on supporting PFP NFTs. Users can mortgage multiple NFTs of different types to increase their borrowing limits and immediately borrow funds from the protocol. Furthermore, the model classifies the lending pools into Blue Chip NFT lending pools and Growth NFT lending pools, allowing liquidity providers to choose different lending pools based on their risk and return preferences.
- 1.Low Efficiency in Peer-to-Peer Lending due to Matching Requirements:
- In traditional peer-to-peer lending models, matching lenders with borrowers can be time-consuming and inefficient. This process requires finding a suitable match that meets the specific terms of both the lender and borrower, such as interest rates, loan durations, and collateral requirements, which can vary widely.
- 2.Difficulty in Pricing Real World Assets (RWA):
- Valuing real-world assets can be particularly challenging due to their often unique and non-standardized nature. Unlike digital assets, which may have clear market prices, real-world assets lack a unified market price, making it difficult to determine their fair value.
- 3.Difficulty in Safeguarding Lender's Funds:
- Lenders may face difficulties in securing their funds, especially in a declining market where borrowers may be unable to repay loans on time. This risk is exacerbated by the potential for the collateral's value to also decrease, leaving lenders exposed to losses.
- 4.Difficulty for Borrowers in Finding Debt Acquirers:
- Borrowers may face significant challenges in refinancing their debt in lending markets such as Blend, where lenders have varying interest rates. In order to refinance, borrowers rely on lenders proactively clicking "Accept" to take on the debt, a process that can be complicated and time-consuming. Furthermore, the amount borrowed by the borrower is equivalent to the lender's quote for the NFT collateral. In a declining market, the value of the NFT may decrease, making it difficult for borrowers to find offers with higher quotes for their collateral. This could potentially trap borrowers in unfavorable loan terms, as the decreased market value of their collateral limits their refinancing options.
- 1.Flexible Loan Amounts:
- By allowing borrowers to choose their loan amounts, users can control their level of risk. This also increases the likelihood of receiving higher offers from lenders.
- 2.Easy Debt Transfer to Higher Bidders:
- Borrowers can transfer their debt to individuals who offer a higher bid, providing a safeguard against financial crises and potentially unfavorable loan terms.
- 3.Lender Customized Pricing with Self-Assumed Risk:
- Lenders have the ability to customize the pricing of loans, and in doing so, they also assume the risk associated with the loan. This customization allows lenders to have more control over their potential returns and exposure.
- 4.Bidding on Entire Collections or Individual NFTs:
- Lenders can make offers on entire NFT collections or on individual NFTs, giving them flexibility in how they choose to lend.
- 5.Multiple Interest Rate Options:
- There are fixed interest rates for certain assets, facilitating easier debt transfers. Additionally, lenders have the option to set customized interest rates, providing them with another means of tailoring their investment strategy to their risk tolerance and return expectations.
- 1.Unmet NFT lending demand:
- In the current cryptocurrency market, NFTs are undeniably the most popular and highly engaged assets. However, many NFT holders primarily focus on trading activities. After acquiring NFTs, they either wait for appreciation to sell them or passively endure the devaluation. Meeting the lending demand for NFTs is crucial as it can significantly contribute to price stability. This is precisely why Taker was created.
- 2.Unaddressed lending demand for non-blue-chip NFTs:
- Existing lending products mainly cater to blue-chip NFTs, which are highly-priced. However, there is a much larger demand for lending services for non-blue-chip NFTs. At Taker, we strive to balance risk considerations and meet the lending needs of a broader user base. Our goal is to provide comprehensive lending solutions that cater to a wide range of NFT assets, going beyond the realm of blue-chip assets.
- 3.Limited collateral options:
- When it comes to borrowers, evaluating their repayment capacity is paramount. Traditional Web3 lending products typically assess collateral value directly within the protocol. However, for holders of multiple NFT assets, we consider their overall repayment capacity. In the pool lending market, we enable mixed collateral options to prevent liquidation solely based on the price fluctuations of a specific NFT collection. This approach takes into account the borrowers' comprehensive ability to repay.
- 4.Inefficient liquidation processes:
- Some existing NFT lending products still rely on auction-based liquidation processes, which may not be optimal in terms of capital efficiency. Our goal is to provide liquidation methods that align with high capital efficiency. With Taker, we enable direct liquidation of unhealthy collateral from borrowers. While the multi-collateral approach mitigates liquidation risks, immediate liquidation requires users to consider various factors, reducing the risks for fund providers.
- 1.Instant Loans:
- Taker's lending pools support instant loans, where all NFTs in the Supported Collections are treated as fungible assets. The loan amount for each individual NFT is determined by multiplying the floor price of the Collection with the Loan To Value ratio.
- 2.Lending for Non-Blue-Chip NFTs:
- We support some great NFT assets which are non-blue-chip NFTs, but with an active community and wide awareness by the market, also known as Growth NFTs. In the future Taker token holders can vote to add or delete the NFT Collections in Growth NFT lending pool.
- 3.Risk Isolation:
- To ensure risk isolation, the ETH provided by lenders is not shared between the Blue Chip NFT and Growth NFT pools. Additionally, the Growth NFT pool has different interest rate parameters compared to the Blue Chip NFT pool.
- 4.Mixed Collateral:
- While Blue Chip NFTs and Growth NFTs have separate collateral pools, within each pool, the collaterals are mixed， e.g. your BAYC and MAYC collateral are mixed in the blue-chip lending pool. Borrowers have the flexibility to increase their collateral options to enhance their ability to withstand liquidation.
- 5.High Liquidation Efficiency:
- Liquidators have the ability to directly liquidate unhealthy borrowers' NFT assets, with one NFT being liquidated at a time. This approach is more efficient than auctions and incentivizes liquidators to take proactive actions.