According to 0xngmi’s tweet, “finally finished the llamalend contracts and will be launching it soon. Anyone interested in trying to break them?”
The anonymous founder of the DeFi platform, DefiLlama, has created a new protocol, Llamalend. This protocol enables users to become liquidity providers for their non-fungible token collections.
DefiLlama is a DeFi project aggregator that enables smart contracts for novel NFT borrowing and lending. In order to solve liquidity constraints, its founder created LlamaLend, stating that it was near completion.
In announcing this new protocol on Twitter, 0xngmi stated,
“finally finished the llamalend contracts and will be launching it soon. Anyone interested in trying to break them?”
The protocol generally aims to solve the problems of NFT holders who need to obtain liquidity while holding their digital collectibles. It mainly targets small NFT collections.
Hence, with the new protocol, holders can easily sell their NFTs should they see a good opportunity and need liquid money.
According to DefiLlama’s GitHub page, LlamaLend will enable users to deposit their NFTs, obtain a signed price attestation from a server and borrow Ethereum. Users can borrow up to one-third of the NFT’s floor value.
Also, users will be free to pay back the loan anytime they want. They will only be charged interest based on the duration. The loan will have a fixed interest rate depending on the pool utilization rate.
0xngmi also noted that pools on LlamaLend will not have a built-in liquidation system. Rather the liquidator has full ownership of the NFT collection. He also has the power to decide how to go about with bad debts.
The protocol will incorporate an oracle system. The system will only have a single request to decide the NFT borrow price and none after that.
0xngmi stated the move would be very cost-effective for NFTs. There will be little borrowing volume as there is no need for a constant update in the on-chain prices.
