Rain.fi: Transforming NFT Lending with Peer-to-Peer Liquidity Pools on Solana's DeFi x NFT Wave
Solana, a high-performance blockchain, is undergoing a significant transformation with the introduction of the DeFi x NFT wave. The integration of decentralized finance and non-fungible tokens is set to bring a new level of liquidity to collections and change the market dynamics in an unprecedented way. One of the key players in this movement is Rain.fi, a first-of-its-kind, fully decentralized, peer-to-peer liquidity protocol for NFTs.
Rain.fi is revolutionizing the NFT lending landscape, offering users the ability to lend SOL/USDC/MSOL and finance mortgages using their NFTs as collateral. The platform operates with peer-to-peer liquidity pools, which sets it apart from other NFT lending protocols. Instead of having to put liquidity into platform-managed and collection-specific pools, or submit loan offers, Rain.fi allows lenders to tailor offers according to their risk appetite. Lenders can create their own pool, select their terms (loan to value ratios, interest, loan duration, etc.), and select one or more collections they want their pool to lend to. This way, liquidity is available for multiple opportunities to find a borrower, rather than being limited to the lending orders that the lender put out for a specific collection.
Taking a loan on Rain.fi is simple and straightforward. First, a borrower needs to select an NFT that they would like to collateralize. Loan pool offers are then aggregated and displayed for borrowers to select from. Before committing to a loan, borrowers need to read the loan terms, including the loan duration, interest, and upfront fees. Once a loan option is selected, the borrower should check the terms before committing. After the repayment period, loans will be put on a grace period, where the borrower has 24 hours or the agreed loan duration to repay before defaulting. If the borrower defaults on the loan, they will lose the NFT.
Rain.fi’s key differentiators include flip loans, lending pools, and mortgages. Flip loans benefit from fewer fees if paid back prematurely, while other lending platforms have fixed fees and do not reward borrowers for paying back early. Lending pools allow lenders to set their own terms, rates, and accepted collections and automate the lending process so that there is no need to actively manage it. Borrowers can choose the offers that best suit their needs. Mortgages, or “ape now, pay later,” allow users to buy NFTs for a fraction of the price, receive the frozen NFT to join communities, and pay the rest back over time. The frozen NFT is still eligible for snapshots and airdrops while being held.
Rain.fi has introduced a new feature called Rain Mortgage that allows users to purchase NFTs even when they don't have enough funds in their wallets. With the tagline "APE NOW, pay later," Rain Mortgage lets users buy the #1 trending Solana NFT collection with just 50% of the funds required. Once the user has paid the initial 50%, Rain.fi will provide the remaining funds to buy the NFT. However, the NFT will remain locked in the user's wallet until 100% of the funds are repaid over time. Rain Mortgage offers several benefits, including the ability to never miss an opportunity, long NFTs indirectly, and not worry about liquidating other NFTs for funds. While only select collections will be eligible for Rain Mortgages initially, Rain.fi is collaborating with several popular collections such as Degen Ape Academy, Claynosaurz, and Bold Badgers.
Rain.fi’s borrowing feature is backed by an ocean of lending pools, each offering different terms that may be better suited to the borrower's needs. Lenders can choose their terms when setting up their pools, including loan to value ratios, interest, and loan duration. As a borrower, these factors are crucial in determining which option is the best choice.
I was given a small taste of alpha from the team who plans to release its own small NFT collection. The minting process for these NFTs will require "raindrops," a point system that is earned by users of the Rain.fi platform. While details on the collection are still limited, the team has hinted that raindrops will be required to participate in the minting process, and that they will be giving away raindrops to the community in the coming weeks. While it may not be enough to fully mint an NFT, these giveaways will certainly help users get a head start on the process. This exciting news is sure to generate even more interest in the Rain.fi platform and its growing community of users.
In conclusion, Rain.fi is offering a revolutionary way for NFT holders to get liquidity on their assets by collateralizing their NFTs for loans. The platform's hybrid model combines the best aspects of leading lending protocols and operates with peer-to-peer liquidity pools, which provides more flexibility for lenders and borrowers. Rain.fi is helping people be their own bank, and we can expect to see a surge in popularity as the DeFi x NFT wave continues to sweep Solana. Visit docs.rain.fi for more information on how you can get involved in this exciting new venture.
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