The Pawn Protocol is an infrastructure for NFT liquidity. It enables the financialization of non-fungible assets, commonly referred to as NFTs. They represent a natural evolution of storing value and attributing ownership for unique assets.
The Pawn Protocol facilitates trustless off-chain order matching using structured digital signatures to validate loan term attestations from borrowers and lenders. Loans are settled on-chain and held in decentralized escrowescrow - An escrow is a contractual arrangement in which a third party receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacting parties, co-opting cryptographic security guarantees offered by Ethereum.
- wNFT (Wrapped NFT) - Deposit hybrid assets (ERC721, ERC1155, ERC20) minting an NFT that represents the basket.
- PunkRouter Support for a gas-saving single transaction to wrap CryptoPunks into Wrapped CryptoPunks (conforming to ERC721) and deposit into your Asset Wrapper.
- Loan Requests - Borrowers can make loan requests setting terms such as funding ccy (ERC20), duration, interest amount, for termterm - A term loan is a monetary loan that is repaid in regular payments over a set period of time. loans of at least one day in duration, collateralized by their wNFT.
- Trustless Matching - Lenders can fund a loan request trustlessly and once countersigned, either lender or borrower can marshal a loan for on-chain settlement.
- Borrower Note - Upon settling a loan on-chain, the funding amount is disbursed to the borrower's address, the encapsulated assets in the wNFT and the collateralized loan are transferred to the lenders address, and the borrower receives a borrower note (ERC721) that represent their claim to the assets upon loan repayment.
- No Prepayment Penalty - Loans can be paid off any time to recoup assets held in escrow on-chain with the protocol.
- Loan Offers - Lenders can make loan offers for loan requests that are Open to Offers.
- Trustless Matching - Borrowers can settle a loan by accepting a loan offer trustlessly since the Lender has digitally signed the terms of the offer and approved the funding amount for those terms to the Pawn Protocol.
- Lender Note - Upon settling a loan on-chain, the lender transfers the funding amount from their wallet to the borrower's and receive a lender note (ERC721) that represents their claim on the wNFT encapsulating the assets collateralizing the loan (and therefore a claim on the assets themselves) if the loan were to default.
- Trustless Claims - Simple logic embedded in the Pawn Protocol dictates whether a loan is in default. If the funding amount + interest amount have not been paid by the end of the loan duration, the loan is claimable by anyone. The wNFT, and therefore the assets collateralizing the defaulted loan, are transferred on-chain to the address that owns the lender note.
Updated 4 months ago