P2P Lending / NFT Lending Forum

It's happening! I tokenized domainfi.net using the new tokenizing registrar called Namefi and then used it as collateral for a loan on Teller!

https://decashed.eth.loan/2024/01/first-smart-contract-loan-ever-made-against-domain-name/

Good reads:

Part 1: https://www.blockchainandthelaw.com/2023/11/part-i-nft-lending-legal-issues-involving-secured-transactions-under-the-ucc-pre-and-post-article-9-and-12-amendments/

Part 2: https://www.jdsupra.com/legalnews/part-ii-nft-lending-legal-issues-2810780/

Speaking of DNS domains, these are the web3 related ones that I have:

https://eth.loan/mydomains/

All Teller Loan Listings: https://eth.loan/teller/

All Loans Made on Teller: https://eth.loan/teller/loans/

All DNS Domains Minted By 3DNS: https://eth.loan/dnsnfts/

Is there any reason that nobody has turned phone numbers into NFTs?

You wouldn't have to tokenize all phone numbers and tokenization wouldn't have to be permanent. Owners could on- or off-ramp their asset with the chain at their own desire. Such a feature is already being rolled out with domain names on 3DNS. There is a precedent for it. I wrote a bit about tokenizing phone numbers here and why it's not such a crazy idea.

https://decashed.eth.loan/2023/09/its-time-to-tokenize-phone-numbers/

So everyone's seen how many .eth loans I've had go bad and I've heard all kinds of suggestions and criticisms about my approach, namely:

1. I loaned against bad names that nobody wants
2. The loan amounts were too small
3. I should only lend against grails or digits or something "liquid"

So on the one hand I totally agree that loans of like .05 eth are relatively pointless, at least on an individual level because what is someone seriously going to do with like $80?

A company that was lending against .coms believed the smallest loan size that made sense was $5,000 which I get when the borrower is a business borrower. 

But I don't think that increasing the loan size itself increases the seriousness of the borrower. What I'm seeing so far is that "borrowers" see themselves only as sellers, which is why there's 7,000 names listed on Teller right now. They think it's an alternative selling platform to ENS Vision.

If anything, people are showing that they're willing to walk away from names for as little as $80. The names are only owned for the purpose of selling, not for long term investing or holding or community. It's not like a Bored Ape where you can go all around town and be like "look at me I'm in the Bored Ape Yacht Club."  If they own grail.eth, their only goal is to get rid of it and sell it.

I had never considered when the first loan to ever be made a .eth occurred but today I learned anyway. It was against brantly.eth on April 14, 2020. Proof: https://medium.com/@brantly.eth/the-worlds-first-ens-backed-loan-with-rocket-lp-dao-f24dc4b4019

At the time, Brantly wrote:

"I received the world's first ENS-backed NFT loan this week.

Rocket LP DAO issued the loan, and I sent the ENS name brantly.eth to the DAO's multisig wallet as collateral — while maintaining the ability to still use the name."

The loan was for 6.5 eth over 3 months.

This was his thought process on why he'd repay at the time:

"As I mentioned earlier, I put up the ENS name brantly.eth as collateral. Brantly is my first name and has great personal value to me, so I have a strong incentive to repay the loan; and first names are generally valuable .ETH names since they're short, and there can only be one owner per name."

Even though I'm on a big losing streak, I made some offers against names people listed for loans. No bites presumably because I was not as generous with the amounts. Reminds me of a couple exchanges I've had that look almost exactly like this-

Them: My name is worth more than that.

Me: I know. That's why I offered a lower amount.

Them: But why would I take less?

Me: So that you have incentive to pay back.

Them: Pay what back?

Me: The loan...

I had 5 loans default in a single day on Teller, all from different borrowers. Out of 6 loans on Teller I've had reach the due date so far, all of them have defaulted.

Names to default today were:
accountlogin.eth
blockpoker.eth
freewallets.eth
onlinemusic.eth
p2pnetwork.eth

Amounts varied from .10 to .13 eth

Teller doesn't let you liquidate right away. They have a built-in 5 day grace period.

About a month ago, I wrote that if a lender wanted to entice a borrower into accepting a loan offer, they'd have to offer at least .1Ξ (right now around $160) because the borrower could have a transaction fee etc just to do the loan. I've since changed my mind. I have seen too many people list names that they cannot afford to renew that expire very soon for which there are not even any buyers for the name. Which means that any amount greater than what they paid to register it or what it would cost to renew it is basically a win for them, even if they decide to intentionally default. Case in point, I am now looking at the user's eth balance, renewal cost, time left til expiration etc. In another post on here, we already began to see that borrowers with no eth in their wallet at the time of the loan tend to default.

When checking the status of a loan recently, it told me that the wallet address matched the owner of the name, which really shouldn't cause one to bat an eye... EXCEPT that when someone borrows against an ENS name on NFTfi, ownership of the ENS name is transferred to an NFTfi contract address. That means that there is no way the owner could match the wallet address that the borrower had set and something had to be off.

Let's examine what happened here. ENS has 3 layers to look at:

1. Where the ENS Name resolves to, i.e. the wallet address
2. The manager address of the ENS Name
3. The registrant/owner of the ENS Name

When someone borrows against their ENS Name on NFTfi, the registrant/owner changes to an NFTfi contract address. As the manager, the borrower can still make changes to the name's profile but they can't change the owner of it.

Some mainstream ENS dev tech uses the wrong language. For example, in web3.js, retrieving the Owner of an ENS name actually retrieves the Manager of it. This is where eth.loan went wrong (the language has since been updated). Other platforms confuse a wallet address with ownership which creates a ton of unintended consequences.

At the end of the day what you need to know is that when a loan is made, the owner of the name is the lending platform, so be sure to check who the borrower actually in order to figure out who the loan was made to.

I saw a decent name on NFTfi (qualitycontrol.eth) that I offered a .07 eth loan to see what they would do. I think they had it up for sale for .1 eth and I figured he might take it. Loan is only for 7 days and they took the offer. But now when I click on it, I see Time Equity of $1 and an expiration date of 11/23/23 and now I am not so sure it was a good idea. While almost everyone I talk to is convinced that everything is about market price, this borrower  effectively had only $1 of value left on what he had actually paid for to register it. The loan he got was for $115. In a way, he spent $5, used of $4 of the value and then parlayed the last $1 into a $115 loan. It makes me think that Time Equity is probably worth looking at even though others will disagree.

Before the homepage was showing only a few ENS listings, if any, from NFTfi because of how their public api was set up but we got approved into their closed beta api and it should show the most recent 20 ENS listings every time now. Below that will be similar from Teller. Hoping to make other improvements. I don't want to turn into an aggregator site and be like everyone else but I think this is helpful.

I tweeted this out but wanted to put it here. I think that there is a difference between a name that has been registered out for multiple years versus one that was only registered for one year and is expiring soon.

My first tweet
BORROWER 1: wants to use .eth name as collateral. It expires in 3 months.

BORROWER 2: wants to use .eth name as collateral. It expires in 8 years.

All else being the same, which one would you lend against?



My second tweet

if someone regged a really nice 4 char ENS name for 10 years, would it make sense to say that it has $1,600 worth of equity in it? ($160 x 10)

Since I didn't even know about this initially, then I assume other users learning about NFTfi in the future might not know that they have a rewards program. I'm just going to summarize and paste some of the key highlights from this page about it here: https://nftfi.com/blog/nftfi-rewards-earn-season-one/

Borrowers and lenders earn points from NFTfi for repaid loans. Lower APRs get more points. What do points do? It says they don't have any plans yet for what they represent, but there's a leaderboard of the users with the most points.

Only repaid loans earn points: Aims at motivating lenders to carefully manage default risk via conservative LTVs, and borrowers to not take out excessive debt they might not be able to repay.

Larger and longer loans earn more points: Aims at motivating lenders to provide borrowers with flexible access to various loan sizes and loan durations. While loan size and loan duration are directly proportional to the points earned, their effect on the final number of points per loan is lesser than that of the APR (see below).

Lower interest rate (APR) loans earn most points: Aims at motivating lenders to provide borrower-friendly interest rates and risk-adequate LTVs as a consequence. APR is the most important factor for determining the final number of points per loan.

• Loans with APR <2%: no points to reduce wash lending risk.
• Loans with APR between 2% and 10%: max points. A lower APR within that range does not earn more points.
• Loans with APR > 10%: reward points diminish at a moderate rate.

Max Point APR Curve (updated on July 5, 2023): The maximum points a given loan can receive drops off slowly and plateaus at 50% of max points for loans between 70-100% APR. Loans with APRs over 100% do not earn points.


They have systems to detect washloans attempting to gameify the points .

Here's the leaderboard: https://app.nftfi.com/stats

I saw the name dopeparty.eth on the eth.loan homepage this morning that was listed as looking for a .1 eth loan. It got me curious enough to click on it and check this guy out: https://dopeparty.eth.loan

It says he's made 200+ loans on NFTfi as a lender. (right now the tool only checks NFTfi data). Clicking the coinbase wallet icon also reveals he has $25,000 worth eth right now. Clicking the .photos link says that the name doesn't expire until 2025. So I goto NFTfi and it says he wants terms of 300% apr over 7 days. Sounds great?! lol. What's the catch! Naturally, I extended an offer! But seriously. whattt?

We're compiling a list of official Discords run by NFT Lending Platforms. These are really good places to get live information and interact with either platform users or the platform devs.

NFTfi: https://discord.gg/nftfi

Arcade: https://discord.gg/arcadexyz

Teller: https://discord.gg/teller

x2y2: http://discord.gg/x2y2-io

blur: http://discord.gg/blurdao

This tweet is from a few days ago but NFTfi announced that they had surpassed 50,000 loans

https://twitter.com/NFTfi/status/1690007706063589377?s=20

Their home page says that the average loan size is $10,000 and that the total loan volume aounts to $475 million+.  Seems like an interesting business they're in!

About an hour ago, a borrower on NFTfi accepted a loan offer I made on zoomedia.crypto for .05Ξ. I know, lol, but I wanted to try a non .eth one for once since I'm learning as much as I can.

Apparently, the borrower isn't so anonymous. They have a profile on NFTfi that includes their X handle. It also says that they've borrowed money 40x on NFTfi and repaid 35 of the loans. The other 5 they defaulted on. I had not considered any of this info prior to making the loan as I had no idea this info was there. I guess that's a whole part of the learning process.

I was able to make a customized live list of recent ENS loans via Snowgenesis:

https://eth.loan/ensloans/


Note that Snowgenesis doesn't aggregate Teller loan data because as of right now Teller does not have an easy way to aggregate it. The highlighted ones in yellow are linked to my addresses (as the lender).

The date on the left is the date when the loan was made. The date on the right is when the loan is due. I haven't been able to figure out how to parse them in order of loan origination date. Just wanted to get up what I could. There's not a whole loan of ENS loans being made right now.