There are major differences between collateralized vs. zero-collateral NFT rental.
Max Lending Duration
The maximum time people can borrow their NFTs. Borrowers can stop borrowing anytime they want, and only pay for the time of the leasing.
The collateral is equal to the value of the NFT in your mind. Borrowers need to put collateral to borrow. In case the borrower doesn’t return the NFT, you have the right to foreclose and claim the collateral.
Price for Lend
The price that borrowers need to pay for the Max lending duration is specified. Borrowers need to pay the price upfront, and the price will be sent to the borrowers’ wallets after the lease ends. If the borrower returns the NFT before Max lending duration, the remaining price will be returned back to the borrower’s wallet.
Yes, absolutely!! Your collateral is held in escrow in our smart contract during the entire leasing period. The only way you will lose your collateral is when you don’t return the NFT after the Max lending duration, and the lender forecloses by claiming your collateral.
Yes and No. Once you lend out your NFT, the NFT will be sent to the borrower’s wallet. The borrower can choose not to return back to you. Therefore, we recommend you not set a collateral amount too low, otherwise the borrower may never return your NFT, but simply take your NFT and sell higher on marketplaces.
Please beware of the risks below when using the application:
Please don’t set the collateral amount too low compared to the value of the NFT. The borrower may choose to never return the NFT back, but simply take your NFT and sell higher on marketplaces.
Please don’t set the price too high. Remember the borrower has to pay the whole price for the Max lending duration upfront. Asking the borrower to pay too much upfront will force them to simply walk away with your offer. Remember no matter what price you set for whatever Max lending duration; you will be earning interest by seconds.
Please be mindful to only set long-term Max lending duration if you think your NFT will hold its value through the entire leasing period. Projects that have just launched may seem liquid and valuable but die over 90 days.
Please be mindful of the price per hour you accept to pay. Not all offers are good, and others may offer you a better price per hour. The good thing about our leasing platform is that you as the borrower can always stop borrowing within Max lending duration.