Borrow More, Worry Less: Unlockd’s 75% LTV on NFTs with the Lowest Liquidation Risk
Navigating the ever-changing NFT landscape can feel like a thrilling rollercoaster ride, where getting the appraisal value and Loan-To-Value (LTV) ratio just right is crucial for maintaining a secure and fair ecosystem.
Traditional methods like floor-based appraisals might seem like a simple solution, but they impose limitations on LTV and lead to an inefficient market.
Unlockd’s groundbreaking approach offers a dynamic and tailored solution that takes into account each asset’s unique characteristics and market conditions, ushering in a new era of nuanced and secure lending.
And thanks to the most recent update to the math behind our model, now you can get a loan of up to 75% of the true value of your NFT— while maintaining the most advanced financial safety of any NFT-backed protocol out there.
Unlockd offers a valuation for your asset that is usually higher than the floor price. And then, it lets you borrow a higher percentage of this value than any other solution.
It’s a no-brainer:
More extra capital. Less chance of liquidation. The best interest rates.
Let’s dive deeper.
Rethinking NFT Appraisal: A Fresh Perspective
Picture this: traditional floor-based appraisals value an NFT based on the lowest price recorded for a specific collection.
Sounds a bit off, right?
That’s because it goes against the very essence of non-fungible tokens.
Every NFT is unique and should be valued independently, taking into account the ever-shifting landscape of rarity, trends, and utilities.
Enter Unlockd’s appraisal model, which teams up with specialized third-party tools to appraise each NFT individually.
By embracing various models, input variables, and data science techniques, these partners use machine learning-based algorithms to analyze historical sales data and NFT metadata, generating accurate and reliable pricing.
We work only with world-leading projects; the likes of Upshot, NFT Bank, Ginoa, and Nabu. They provide the crucial info needed to determine the most accurate price of NFTs used as collateral.
Harnessing the Power of Machine Learning
Machine learning allows Unlockd to access data that simpler models just can’t reach.
By pooling sales histories of NFTs from multiple sources and utilizing a range of NFT metadata, this approach excels in predicting prices where others stumble, offering a more robust appraisal process.
Machine learning thrives on data, and when it comes to NFTs, there’s plenty to feast on.
Take, for example, an NFT from a popular digital art collection. Machine learning can analyze the artist’s influence, the artwork’s rarity, and its historical sales data to predict its value, as well as broader market trends and user sentiment to further refine the prediction.
This holistic approach is what sets machine learning apart from other valuation models, and why Unlockd really gives you the true, fair price of your NFT.
Unlockd’s Dynamic LTV Model: The NFT Lending Game-Changer
Unlockd’s dynamic LTV model is like the secret sauce in the world of NFT lending. This revolutionary method provides a tailored and adaptable LTV for each asset, reflecting the unique characteristics of every NFT and adapting to rapidly changing market conditions.
Let’s dive into the nitty-gritty of this model and see how it’s transforming the NFT lending landscape:
Balancing User Risk and Asset Security: A Delicate Act
Unlockd’s dynamic LTV model is all about balancing user risk like a tightrope walker.
By considering factors such as data volume for asset appraisal, recent volatility, and other relevant data, the model makes sure the LTV accurately reflects the trustworthiness of the valuation algorithm.
Imagine we have two NFTs from the same collection — NFT A and NFT B. Both have the same appraised value, but NFT A has more historical sales data and less recent price volatility than NFT B.
The dynamic LTV model would give NFT A a higher LTV, as it has plenty of data to back up its appraisal and low volatility.
Adapting to Market Conditions: A Nimble Navigator
One standout feature of Unlockd’s dynamic LTV model is its ability to evolve with market conditions.
It adjusts the LTV based on factors like market and collection volatility, as well as the asset’s volatility against its collection. This flexibility ensures that the LTV stays relevant and accurate, even amidst unexpected market twists and turns.
For instance, consider a situation where a specific NFT collection’s market experiences high volatility. The dynamic LTV model would automatically adjust the LTVs for NFTs within that collection, reducing them to account for the increased uncertainty.
This responsiveness helps protect both lenders and borrowers in the ecosystem.
Mitigating Risks in NFT Lending: A Proactive Protector
Unlockd’s d’s dynamic LTV model also acts as a proactive protector, considering potential risks to the protocol, such as selling pressure during a massive liquidation event.
By keeping track of the number of assets in reserves and monitoring other lending protocols, the model actively discourages new collection-based loans when reserves increase.
This smart move limits selling pressure and maintains the protocol’s robustness and security.
A Delightful Dance with Data
At its heart, the dynamic LTV model is like an elegant dance, gracefully responding to the ever-changing world of NFTs.
It weaves together the sophisticated steps of machine learning-based appraisal models, the fluidity of market conditions, and the art of risk management to create a harmonious and secure lending environment.
Unlockd embraces this innovative approach to unlock new possibilities in NFT lending, creating a more inclusive, adaptable, and dynamic ecosystem.
Gone are the days of rigid, one-size-fits-all LTV ratios — Unlockd’s dynamic LTV model offers a fresh, engaging, and fair solution, setting the stage for the next chapter in the NFT revolution.
Unlockd is the safest, most secure, and cost-effective way to borrow against NFTs with instant, permissionless loans, as well as risk-free, auto-compounding yield directly in ETH.
Try it now with an LTV up to 75%, 0 fees and just 4% annual interest for 30+ collections: