Introduction to reNFT
reNFT is a platform for collateralized and uncollateralized peer to peer Non-Fungible Token (NFTs) lending.
Lenders deposit their NFT into the reNFT contract, specifying terms of a loan, then renters can rent that NFT from the contract.
Benefits include:
- Lend out NFTs for active yield
- Borrow NFTs for access to benefits without having to purchase them outright
How does it work?
Vault Creation
Vaults can be created by anyone for any NFT asset on Ethereum. Once a vault has been created, any user can then deposit eligible NFTs into the vault to mint a fungible NFT-backed token referred to as an "vToken".
Learn more about vault creation
Minting vTokens
Anyone can deposit NFTs into an existing vault (or one they have created) in order to mint a fungible vToken that represents a 1:1 claim on a random NFT from within the vault.
Floor Prices
Users can then pool their minted vTokens in Automated Market Makers (AMMs) like Sushiswap to create a liquid market for other users to trade. With liquidity and trading volume established, the NFT-backed vToken enters into price discovery and a "floor price" is discovered.
The floor price denotes the lowest price for a particular NFT. Users establish a floor price by minting and selling vTokens in markets where they consider their NFT to be overvalued.
{% hint style="info" %} NFTX is helping to establish reliable floor price feeds for NFTs, enabling their wider application in decentralized finance on Ethereum. {% endhint %}
For example, a user has 5 Hashmasks and values 2 of them highly. However, they consider the other 3 Hashmasks to be lower value than the market price for the Mask vault on Sushiswap. The user deposits these 3 Hashmasks and sells their 3 minted MASK tokens on Sushiswap, lowering its price and aiding price discovery.
The above process will continue until a floor price is achieved.
Eligibilities
The Mask vault allows any Hashmask to be deposited, however other vaults use an eligibility list that only allows a specific sub-category of NFTs to be deposited. For example, the Kitty Gen 0 vault has an eligibility list that includes only Kitties whose metadata is Generation 0. Other Kitties can not be deposited into this vault.
Who Benefits From NFTX?
Collectors
NFTs in their basic form do not earn yield. However, when they are used to mint vTokens they can tap into the world of decentralized finance. Put simply, collectors can use NFTX to unlock more value from their NFTs:
- Earn protocol fees
- Earn trading fees as a liquidity provider
- Farm with stablecoins using vTokens as loan collateral
Content Creators
By launching on the NFTX protocol, content creators are able to earn protocol fees in perpetuity whilst also improving the reach and fairness of distribution:
- Earn protocol fees
- Distribute NFTs via an AMM in the form of vTokens
- Create instantly liquid markets for new content
Investors
NFTs are typically highly illiquid and difficult to price. NFTX makes speculating and investing in the NFT market a far simpler process:
- Access the most liquid markets for NFTs
- Track the price of particular categories of NFT