What is PawnSpace? PawnSpace is a decentralized NFT mortgage lending platform on Polygon using the Peer to Peer (P2P) lending model. What is special about this project, let's find out with Hak Research in this article.
What is PawnSpace?
PawnSpace Overview
PawnSpace is an NFT mortgage lending platform on Polygon that uses a Peer to Peer (P2P) lending model. PawnSpace supports standard ERC-721 NFTs and uses price data from Opensea to assist both borrowers and lenders in finding the best valuation for the NFT.
What is PawnSpace?
Participants on the platform:
Borrower (Borrower): Using NFT as Collateral asset to borrow a corresponding amount of money. PawnSpace mints a Debt Token representing the debt.
Lender (Lender): Accepts the terms of the loan and lends money to Borrower to receive interest. PawnSpace mints 1 Credit Token representing Lender's credit.
How PawnSpace works
Operation model on the PawnSpace platform
PawnSpace's operating model follows these steps:
Step 1: Borrower who wants to borrow money against their NFT will first create a loan order and lock their NFT in the PawnSpace contract. Borrower gives loan conditions such as: Loan amount, interest rate, loan period,... PawnSpace mint 1 outputs the amount of Debt Token representing the debt.
Step 2: Once a loan order has been created, Lenders can submit offers to Borrower for a loan.
Step 3: Borrower approves the appropriate loan offer and receives a corresponding amount of USDC. PawnSpace also mints a number of Credit Tokens for Lender.
Step 4: At the end of the loan term, Borrower returns the loan and interest to Lender to receive NFT . PawnSpace burns Debit Token and Credit Token to clear Borrower's debt.
Liquidation: When Borrower has not paid back the loan at maturity, Lender can claim ownership of Borrower's NFT.
What is the difference of PawnSpace?
Having two tokens: Debt Token and Credit Token created a new asset class for NFT Derivatives . Lender and Borrower can trade these 2 tokens to transfer the debt or loan to others while the loan is in progress.
For example, Alice borrowed money from Bod by collateralizing her NFT on the PawnSpace platform. Alice knows she has lost her NFT because it is nearing the maturity date and is unable to return the money to Bod. Alice wants to minimize her loss by selling NFT to Jacob, which is done by Alice selling all her Debt Tokens to Jacob. Jacob found it profitable to buy back the debt and sell NFT to OpenSea 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 NFT, then sells Debt Token in the market for more money with no intention of paying it back in the first place and send all repayment obligations to the new owner of the debt. Therefore, PawnSpace is working on developing a decentralized reputation scoring algorithm or mechanism to help reduce this risk.
Core Team
He graduated with a Bachelor of Science from Keio University.
He has worked at Amano Corporation - a company that provides time recorders and time attendance management, car parking systems,... with the position of software engineer since April 2008.
In September 2010, he quit his job and joined AMBICIATE - a joint venture operating a call center with the position of director.
After that, he moved to Loco Partners - a platform providing booking services in luxury places with the position of CTO.
He decided to enter the crypto market and is now Co-Founder at PawnSpace from 2021.
Investor
PawnSpace has received $25,000 from the project grant program on Gitcoin.
Tokenomics
Update…
Information Channel of the PawnSpace Project
- Website: https://pawnspace.io/
- Twitter: https://twitter.com/pawnspace
- Discord: https://discord.com/invite/ahhKUvZwNx
summary
PawnSpace has created a new Derivatives market for NFT lending and borrowing activities, which is the unique feature that I see in this project. Hopefully, the information I provide has helped people understand a bit about PawnSpace.
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