Non-fungible tokens have taken the world by storm. A foreign concept to the majority merely a few years ago, today it seems like everybody knows about the Bored Ape Yacht Club or about the myriad of other popular collections.
And yet, for those in the know, it remains crystal clear that the market for non-fungible tokens today is rather illiquid, especially compared to cryptocurrencies.
Of course, this is partially because NFTs are, well, non-fungible compared to their fungible counterparts in the face of Bitcoin, Ethereum, and others. After all, you don’t care which precise BTC you own, but the difference between two NFTs can easily cost hundreds of thousands of dollars.
Pawnfi is a project that aims to pioneer NFT liquidity in a way where “finance” is more but an exclusive club. The project strives to become a leading solution for NFT finance, providing various revenue opportunities for market participants, irrespective of their level of expertise or background.
Pawnfi Stands Above Competition
The world of non-fungible tokens, albeit exciting and explosive, is still very nascent. Some of the challenges that it faces, such as the lack of comprehensive liquidity for newcomers, as well as the lack of general tooling, are still considerable barriers to entry, even to crypto natives.
Pawnfi’s approach is fool-proof, and it aims to introduce a paradigm shift in the way NFTs are traded, exchanged, and interacted with altogether.
It comes with a number of interesting and innovative features, such as:
- Comprehensive P-Token design
- Flash Trades
- Leveraged NFT trades
- Instant liquidity
The bottom line is that Pawnfi’s comprehensive solutions are designed to cater to the diverse needs of the NFT community and are also user-friendly and highly intuitive.
A Closer Look at Pawnfi’s Innovative Features
First things first, it’s worth noting that Pawnfi is powered by some of the industry’s best-known VCs, such as DCG, Coinbase, Polygon, Animoca Brands, and more.
Through the P-Token, the project aims to introduce a novel approach to trading and interacting with NFTs.
In essence, each NFT collection is symbolized by a specific P-Token, which functions much like digital currencies. This allows trading and usage of NFTs in a way that’s reminiscent of financial transactions in DeFi. For instance:
- Ownership of any BAYC NFT would equate to 1,000 P-BAYC and vice versa.
- Ownership of any Azuki NFT would equate to 1,000 P-Azuki, and vice versa.
You get the gist.
A Myriad of Capabilities
With that in mind, Pawnfi offers a range of different services as a sort of gateway between P-Tokens and NFTs.
These include, but are not limited to:
These represent instantaneous NFT and P-Token exchanges. Holders are able to sell an NFT for 1,000 P-Tokens in real-time and then use the same amount of P-Tokens to buy an NFT from the Pawnfi NFT vault.
The interesting bit here is that Pawnfi allows traders to swap P-Tokens for an NFT in two different ways – Specific or Random. In other words, users are able to get a randomly chosen NFT from the vault if they’re feeling a bit friskier. This function suggests that trades are instant – both purchases and sales.
NFT leverage allows the user to borrow P-Tokens using their own NFTs as collateral. The LTV (Loan-to-Value) ratio is fixed at 100%, and both the loan and the interest are denominated in P-Token. This provides some sort of protection against mid-term liquidation risks when the floor price of the project tanks.
In addition, users are able to take advantage of a cross-margin lending market. This mechanism is similar to Aave and Compound where DeFi money market is built up. However, with the design of P-Token, now NFTs can play the same roles here. Imagine supplying 2 Azuki as collateral and borrowing ETH – 2000 P-Azuki is now supplied into this lending market and others can borrow from the pool. That is, when the Azuki holder repays and withdraws NFT, he will possibly earn some P-Azuki as interest revenue.
In essence, Pawnfi’s Consignment guarantees that tokenization isn’t entirely limited to non-fungible tokens that are near the floor prices. This also means that users can rely on immediate payment upon NFT sales, eliminating the need of holders to undervalue their listings in a bid to secure quick deals.
To top it all up, Pawnfi’s P-Token design facilitates instant liquidity needs among different user profiles and integration of NFT into DeFi playbook.
Early Access to Pawnfi’s Exciting Platform
As the team prepares for the grand launch, the Early Access extension to a handpicked number of communities is a strategic move that’s aimed toward refining the platform and optimizing its user experience even more.
Through a private beta phase, the team has already joined forces with industry pioneers, testers, audit partners (like Peckshield), and investors of different types.
However, to show its gratitude to loyal supporters, early adopters, backers, and everyone who’s rooting for Pawnfi’s success, the team is unveiling the Pawnfi Early Access phase and engaging the Invite Program. There are numerous perks that it comes with, so don’t hesitate to check for more information on the official discord.
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