Rewards for borrowers and lenders are designed to foster a healthy, non-predatory lending environment. Earn Points incentivize borrower-friendly loan terms and responsible lending.
Eligible borrowers and lenders can earn points for repaid loans. The associated Earn Points are displayed as "unsecured points" in the NFTfi Rewards cockpit after taking out a new loan. Once the loan is repaid, these points become "secured points". Renegotiations are taken into account too.
Earn Points aim to incentivize borrower-friendly loan terms and a responsible lending market. Borrower-friendly loans feature competitive APRs and LTVs. In a responsible lending market, lenders manage credit risk carefully, and borrowers receive loans that they can reasonably be expected to repay, preventing excessive debt levels and over-leverage.
The calculation principles of Earn Season 1 are designed to support borrower-friendly loan terms and a responsible lending market:
- Only repaid loans earn points: This motivates lenders to manage default risk carefully and borrowers to avoid excessive debt.
- Larger and longer loans earn more points: This motivates lenders to provide borrowers with flexible access to various loan sizes and loan durations.
- Lower interest rate (APR) loans earn the most points: This motivates lenders to provide borrower-friendly interest rates and risk-adequate LTVs.
Earn Season 1 disincentivizes wash loans, which are loans generated by users with their own or related accounts to "farm" points. Measures to disincentivize wash loans include no points for loans with APR less than 2%, loans with durations less than 3 days, loans with less than 20% loan duration utilization, and loans from related wallets.
This is not an offer of tokens or securities. Reward points are at present not redeemable. They are planned to be redeemable for blockchain tokens at a later point in time for eligible users. Certain persons (such as US residents, other US persons and persons located in the US) are not eligible to participate in NFTfi Rewards, and their points (if any) will not be redeemable.
This page is for informational purposes only and should not be construed as financial or investment advice. Investments in loans carry inherent risks, and the value of NFTs can be highly volatile. Users should carefully consider their risk tolerance and investment objectives before taking out loans. Refer to the NFTfi Rewards FAQ and the NFTfi Terms and Conditions for more details before participating in the loyalty program.