🪶Peer to Peer Model
A BNPL Order is Peer to Peer Matched With A Specific Lender Offer
The nature of the xBank permissionless consumer liquidity is a peer-to-peer lending protocol which is tailored to be consumer-oriented. The word permissionless refers to anyone can participate without requiring authorization from a central entity.
Peer-to-peer (P2Peer) lending enables individuals to obtain loans directly from other individuals. The xBank Open Money Market connects borrowers directly to lenders once a borrower has identified NFT opportunities and needs financing.
Why Peer-to-Peer Model for xBank?
The key benefit of a peer-to-peer model is flexible money utilization and manageable risk compared to a peer-to-pool model which shares incomes and risks among lenders.
BNPL is a special loan type which requires flexibility of personalization for money demands such as terms or interest rates.
A matched BNPL order will not be affected by market price of underlying collaterals. In case of loan default, the lender obtains collateral directly. Lenders may suffer direct capital loss with a peer-to-pool model because an NFT is not dividable to different lenders.
A well-defined peer-to-peer model maintains similar efficiency with peer-to-peer model.
How Will xBank Differ from Other Peer-to-Peer Lending Protocols?
Fund management efficiency is largely neglected by most of peer-to-peer products where lenders suffer from repeatedly creating and canceling offers as collateral price changes and compelled keeping a eye on market dynamics to make suer their offers are competitive in the money market.
Segregated Offers According to Collections
For every single lender, they will be able to create one and only one offer (which means approve some amount of wETH) for each supported collection. Lenders are able to modify parameters such as change the lending amount or shutting down their individual lending offer for a specific collection.
Lender's funds are independent and never get pooled on xBank.
Price-Adapted Management
By setting collateral ratio for offers, lenders will be able to leave the table and enjoy a safe lending. It is an automatic rule that changes the single lending amount of lender's offers according to collateral's market price fluctuations.
For example, the current floor price of an NFT collection is 20 ETH, and the maximum collateral ratio set by a lender is 50%, then the upper limit of the single loan amount provided by the lender for a BNPL order is 10 ETH. Assuming that the floor price of this NFT collection drops to 10 ETH, then the upper limit of the single loan amount provided by the lender for the collection will automatically become 5 ETH and vice versa.
Batch Lending and Point-wise Pricing of Interest Rates
With the point-wise pricing strategy of xBank, lenders are allowed to generate a table of lending offers with money market competitive indicators. In other words, for every single NFT collection lender, xBank slices his/her money (based on term and collateral ratio) into multiple conditions and aggregates them with offers from other lenders to form up an indexed lending offer table with interest rates for borrowers.
Token Incentive for Money Market Supplies
In terms of ecosystem capital allocation, xBank plans to use token incentives to encourage lenders to provide better loan terms according to market dynamics and allowing lending at the best, thus driving NFT lending demands.
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