This proposal is to get feedback on a new lending strategy for FloorDAO powered by Gondi.
Gondi is a peer-to-peer NFT Lending protocol where borrowers access liquidity by using their NFTs as collateral. All loans on Gondi have a 40-60% LTV (loan-to-value), meaning that the value of the collateral is always higher than the loan amount, providing an opportunity for FloorDAO to acquire portfolio NFTs at a steep discount or alternatively a good yield on WETH.
FloorDAO has over 3,500 ETH provided as liquidity to NFTX pool earning a 3.73% APR. See details: CryptoPunks Pool | NFTX Yield
Loans against CryptoPunks have averaged 16% during the last 30 days on Gondi for those loans denominated on WETH…
Goal of the proposal is to help FloorDAO treasury get a healthier yield on a risk-adjusted basis.
Why on Gondi? Gondi is the fastest growing NFT lending protocol going from $0 to $25M in TVL within 7 months as well as the most flexible and competitive protocol. Outstanding loans can get refinanced by lenders allowing faster capital deployment and higher utilization rates.
FloorDAO to allocate 122 WETH to lending strategies on Gondi Protocol during a period of time.
Refinance the following 3 loans against Cryptopunks:
Loans are currently at 19.99% APR. Upon refinancing from FloorDAO, APRs on loans will be 18.99%. The interest profit left will be 7.63 WETH per loan giving FloorDAO a maximum of 22.89 WETH in profit minus gas fees.
Each loan will require 40.37 WETH approximately to refinance as it needs to include accrued interest by the current lender in order to refinance. Such an amount will be repaid at the end of the loan alongside the principal and interest profit.
Note that loans at Gondi could get refinanced again or repaid early. In such case, capital can be reallocated to NFTx pool.
The following risks have been identified:
Access to capital: the capital being lent will be locked for a defined period of time, reducing FloorDAO’s available liquidity
Smart-contract: Interacting with smart contracts provide inherent risk