Building a Better NFT Debt Market
Why we're backing NiftyApes
Variant is excited to announce our investment in NiftyApes, a new protocol that transforms the market for NFT-collateralized lending and borrowing.
We believe NiftyApes can be a foundational financial primitive for the NFT market, increasing access to capital for NFT holders and providing attractive returns to lenders.
In this way, NiftyApes will be a powerful tool for financial empowerment for millions of NFT holders, both old and new. By enabling holders to borrow against their NFTs, NiftyApes makes NFTs more productive. Unlocking the capital embedded in NFTs lets holders use that capital to pursue new opportunities to earn. Plus, by reducing the upfront cost of ownership, NiftyApes can broaden access to NFTs. On the lending side, NiftyApes represents a new way for lenders to earn on their idle assets–another way the protocol expands the opportunities for its users and overall utility of NFT assets.
More than just jpegs.
Today, most people see NFTs as expensive pictures of monkeys without much fundamental value or utility and with markets rife with speculative activity. In the future, NFTs will encompass so much more than JPEGs – they’ll take the form of all kinds of assets both financial and beyond, like your house. That’s why NFT financial infrastructure is so important – and if done right, can accelerate the path to true real-world adoption.
What makes NiftyApes different:
While other NFT lending protocols exist today, NiftyApes is designed to deliver an exceptional user experience for both borrowers and lenders. Some of its most compelling features:
Instant liquidity for borrowers. NiftyApes maintains a book of active offers from lenders, and it also aggregates offers across different and attributes, making it far more likely that borrowers can find a loan. Borrowers can accept these offers at any time with no back-and-forth negotiation required. If they prefer more flexibility, borrowers can also request a loan on their own terms.
No liquidation risk during the loan term. Unlike other lending protocols, which liquidate borrowers if the market value of their NFT falls below a certain level, loans on NiftyApes are only subject to liquidation if the borrower has not paid the agreed principal and interest by the end of the loan’s term. This greatly reduces the risk of borrowers involuntarily losing their valued NFTs.
Competitive terms driven by refinancing. To ensure that borrowers are always getting the best available terms, NiftyApes enables borrowers and lenders to refinance a loan at any time. Borrowers can refinance to any loan offer they choose, as many times as they like. Lenders can assume and refinance loans by offering borrowers terms that are better for borrowers on at least one dimension: interest rate, duration, or loan-to-value (LTV). This refinancing mechanism is great for borrowers because it creates competition to offer the best loan terms. It also treats lenders fairly by compensating them when they are refinanced out of a loan, allowing them to still earn interest on deposits that are not funding an active loan.
NiftyApes is led by co-founders Kevin Seagraves and Zach Herring. Kevin and Zach are a powerful combination. Kevin’s prior engineering experience includes co-founding a payments company, building Gitcoin Grants, and co-authoring ERC-1337, the standard for subscription payments on Ethereum. Zach has over a decade of experience in UI/UX design. Before co-founding NiftyApes, he was a program director at Consensys, where he helped early-stage project teams accelerate their growth.We’re thrilled to back this exceptional team as they build a better NFT-collateralized lending market. Check NiftyApes out here and follow them on Twitter for updates.
Looking to build your career in crypto? Check out open roles in Variant’s portfolio here.