Supply and Borrow NFTs and ERC-20s
By supplying your NFTs and ERC-20s in ParaSpace you can borrow ERC-20 tokens and thus potentially earn returns on your NFTs without being forced to sell them. You can use those borrowed ERC-20 tokens as you please; buy more NFTs on credit via ParaSpace's own marketplace, use them to leverage your existing ERC-20 positions, or use the fungible tokens as you would any other.
ParaSpace loans do not have a fixed term and instead the borrower can continue to carry their borrowed positions as long as they keep their account in good health. View more on loan parameters and account health via our Asset Risk section.
ParaSpace currently supports NFT-collateralized loans against 12 art and collectible collections including Bored Ape Yacht Club, Mutant Ape Yacht Club, CryptoPunks, Doodles, Otherdeed, CloneX, Azuki, Moonbirds, and Meebits.
We look to support a much wider range of NFT collections and tokenized assets, but for our existing Peer to Pool lending system we restrict lending according to our Evaluation of NFT Collections for Borrowing methodology. Decisions on which additional collections to support will be made according to the same rules.
You will be able to supply ETH and both supply and borrow ETH, stETH, aETH, cETH, stablecoins (USDC, USDT, DAI), APE, and WBTC. Over time we will add more assets to the lending pool such that you will be able to supply and borrow a wider range of crypto tokens.
For each ERC-20 token there is a distinct lending pool with borrow and earn rates set by our Liquidity and Interest Rates on ERC-20 Fungible Tokens methodology.
Navigate to the ParaSpace DApp and connect the wallet with which you hold your NFTs and/or ERC-20 tokens. For all supported NFTs and ERC-20s you will see a "Supply" button next to the NFT collection or ERC-20 which you want to supply. Select the tokens and hit "Supply" when ready. If it is the first time your account supplies a specific NFT collection or ERC-20 token you will be prompted to allow ParaSpace access to control the same. Security is paramount at ParaSpace and we go above and beyond to keep our protocol and your tokens as safe as possible.
Once the transaction is confirmed, your asset(s) will be supplied and collateralized, and you will then be able to borrow ERC-20 tokens. You can likewise track which assets you have supplied via the same interface.
The maximum amount you can borrow is based on the weighted collateral factor--i.e. the value of assets supplied and their corresponding collateral values according to our Asset Risk parameters.
For example you have supplied and collateralized 1 BAYC (ETH value = 80), 4 ETH , and 800 USDC (ETH value = 0.6). Given collateral factors of 30% for BAYC, 82.5% for ETH, and 82.5% for USDC, the total amount you can borrow would be 30% * 80 ETH + 82.5% * 4 ETH + 82.5% * 0.6 ETH = 27.795 ETH or the equivalent in other supported tokens.
When assets are borrowed, you receive an equivalent amount of dTokens (dETH, dUSDC, dUSDT, dDAI, dAPE, dSTETH, dWBTC) which track the amount of principle and interest owed per-block. The interest owed from borrowing is added onto the overall borrow amount and can be repaid at any time.
NFTs are priced based Chainlink's NFT Floor Price Oracles which track the NFT collection floor price data from major marketplaces and filters for outliers. As such the price used to calculate the borrow limit is the same across all assets in the collection. In the future we look to provide greater flexibility on NFT value calculations.
The collateral factor or LTV is set on a per collection basis. You can see the collateral factors in the Asset Risk section and logic behind Floor prices via How Much Should we Care about NFT Floor Prices?.
You will earn interest on supplied ERC-20s as a share of the interest paid by borrowers. Borrowers of the ERC-20 assets pay interest based on the balance between the amount of the asset that is supplied and borrowed in the pool aka the utilization rate. View more via the Liquidity and Interest Rates on ERC-20 Fungible Tokens page.
When assets are supplied to the protocol, you will receive an equivalent amount of pTokens (pETH, pUSDC, pUSDT, pDAI, pAPE, pSTETH, pWBTC) tokens. These tokens account for the interest earned from the pool paid by borrowers. Interest accrues on a per-block basis and can be realized once the assets are withdrawn.
You can repay your borrowed position at any time by clicking the 'Repay' button on the 'My Borrowed Positions' menu. You will be able to repay using the same token you borrowed. By repaying, you will increase your borrow limit.
You can withdraw your assets from the 'My Supplied Positions' menu by clicking the 'withdraw' button. You will be able to withdraw your assets as long as you do not exceed the borrow limit if the transaction takes place. If you are unable to withdraw, then you can repay your debt or supply more assets to withdraw.
You can use the Flash Claim feature to claim airdrops in a single transaction without repaying any debt. The flash claim feature utilizes Flash Loan functionality and integrates directly with the supported collections airdrop contracts to enable you to transfer your supplied NFT from ParaSpace to your wallet, claim the airdrop, and supply the NFT back to ParaSpace within the same transaction.