Cardano NFTs as collateral for loans – The Cryptonomist

In this article, we interview matteo cappola from FluidTokens, a project on gimbal work to unlock the use of NFT as collateral for loans in a decentralized and peer-to-peer way.

In other words, users can take out loans by placing their valuable NFTs in a smart contract and pay interest to the lender, if he does not repay the loan, the lender will receive the NFT pledged.

Cardano NFT as collateral for loans

FluidTokens allows Cardano NFTs to be used as collateral for loans

Hello Matteo, thank you for your time. Please introduce yourself and the team behind FluidTokens.

Hello everyone! I am Matteo and I am the FluidTokens CEO. I worked on several large projects in the gimbal ecosystem like CNFT.io and Pavia.iomainly like technical manager and DevOps engineer. I am also a Cardano Smart Contract developer and a big supporter of blockchain disruptive technology.

The rest of the team is also made up of brilliant, seasoned Cardano developers with a strong ethics and good reputation within the community. FluidTokens also has celebrity ambassadors who focus their content on education to help everyone in this new crypto experience.

What is FluidTokens, what problems does it solve, and what are the risks of using an NFT as collateral?

FluidTokens is the Cardano peer-to-peer lending platform where anyone can borrow crypto tokens using NFTs as collateral for the loan. Everyone is also able to view all existing loans and accept the best lenders for the amount required.

NFTs often store enormous value but they are highly illiquid. The platform makes NFTs more efficient and a new part of the DeFi world, allowing owners to obtain additional liquidity for any financial strategy. Besides the typical DeFi risks, the lender agrees to provide crypto trusting the borrower who will have to repay the debt with the agreed interest. If the borrower does not repay on time, the lender may claim the NFT used as collateral.

For the lender it is very important to assess the risk of the loan and to verify that the NFT is legitimate: the platform will offer several features to guide the user. An additional risk is that the NFT value may drop suddenly due to external factors.it is therefore important to accept loans with reasonable expiry dates.

Why did you choose the Cardano blockchain for your project? What advantages does it have over competitors?

We have been developing on Cardano for more than 2 years and we know very well the advantages and disadvantages of this blockchain. the The eUTXO model and the use of Haskell in Smart Contracts allow an additional layer of security this is very important for DeFi protocols such as FluidTokens.

the Cardano Scaling Updates planned for this year will also fully unlock the beauty of this blockchain. For NFTs, there is an additional advantage: in Cardano, NFTs are not variables contained in a smart contract: they are actual tokens that live in your wallet. and they are not dependent on any particular smart contract.

Can you develop your partnership with COTI? And for those who don’t know, can you explain what COTI is and how it relates to Cardano?

We recently has partnered with COTI to support Djed, their next stablecoin. Loans will be easier to manage for many professional DeFi players when created and accepted using crypto assets whose value does not fluctuate too much during the loan.

COTI is the first enterprise-grade fintech platform which allows organizations to create their own payment solution and digitize any currency to save time and money. We are planning additional DeFi mechanisms with COTI which will take advantage of upcoming FluidTokens features.

Where do you envision FluidTokens in a few years? What would success look like to you?

We believe that many NFTs will retain their high values ​​due to several factors such as community support, interesting utilities and the metaverseour platform will therefore be the main lending protocol to optimize the portfolios of NFT holders.

I will personally consider FluidTokens a success when all long-term planned features will be fully implemented, when the DAO will direct the updates to the platform and when many other DeFi components will leverage FluidTokens to compose incredibly optimized financial strategies. Metaverse integration is also an important step that we are currently investigating to improve the functionality of NFTs in virtual worlds.

Great, any last words? Where can our readers find you?

We are thrilled to be the pioneers of this new financial paradigm, giving extra strong utility to everything NFT on Cardano. Feedback from the community has already been overwhelmingly positive.

To follow our latest news and features please see our Twitter and feel free to join our very active community on Discord. We are planning token drops for members based on real knowledge of the platform!