V3 Protocol Upgrade (coming soon)
Overview
The purpose of this upgrade is to:
Introduce flexible (pro-rata) asset and collection loans
Improve ergonomics for approving NFT and ERC20 transfers
Enhance gas efficiency
Key Changes
Offer Schema Modifications
Fields Removed:
loanAdminFeeInBasisPoints
referrer
LoanContract
Fields Added:
bool isProRata
uint16 originationFeeInBasisPoints
OfferType: "Regular" | "Collection"
Pro Rata Interest (isProRata
)
isProRata
)False: Fixed interest is paid on repayment (standard NFTfi loans).
True: Interest is pro-rated; less interest is charged the earlier the loan is repaid.
Origination Fee (originationFeeInBasisPoints
)
originationFeeInBasisPoints
)Purpose: Balances the risk for lenders in pro-rata loans.
Application: Subtracted from the loan principal before transferring funds from the lender to the borrower.
Effective APR: A new APR concept that calculates based on the principal plus the origination fee.
Note: Origination Fee is independent of the
isProRata
setting.
Admin Fee Handling
Removal from Offer Schema: The
adminFee
is no longer part of theOffer
.Loan Contract Admin Fee:
Captured when the loan starts and applied upon repayment.
This change implies that lenders are no longer guaranteed a specific adminFee, but this is now managed by the NFTfi Foundation's smart contracts.
Removal of Referrer
The
referrer
field was underutilized and is now removed from theOffer
schema and smart contract logic.
Offer Types
New Association: Offers are now associated with an
OfferType
rather than aLoan Contract
.Loan Coordinator Role:
Specifies which Loan Contract handles a given
OfferType
.Supports multiple Loan Contracts, though one default handler is specified.
Optional Promissory Note
Prom Note Flexibility:
The Promissory Note (Prom Note) is now optional, similar to the existing Obligation Receipt.
Loan Lender Definition:
If no Prom Note exists, the original lender remains the lender.
If a Prom Note is minted, the current owner of the Prom Note is considered the lender.
Only the original lender can mint a Prom Note.
New Loan Coordinator
Reason for Change: Modifications, such as the optional Prom Note, required changes to the loan coordinator.
Unique IDs: Compound loan IDs can be considered unique across loan coordinators.
New Contracts: New ERC721 contracts have been introduced for the Prom Note and Obligation Receipt.
Detailed Schema Comparison
Previous Offer Schema
Updated Offer Schema
Lender signatures
In the previous protocol version (V2), lender signatures included a combination of:
Offer
Loan Contract
In the updated protocol version (V3), lender signatures now encompass a combination of:
Offer
Offer Type
The process of constructing a lender signature in protocol V3 is as follows:
Implementation Considerations
For Developers
Migration: Ensure that offers are compatible with the new schema.
Promissory notes We can no longer assume that a Prom Note exists for a loan, the lender has to mint it on demand
For Lenders
New Origination Fee: Understand the implications of the origination fee, especially when offering pro-rata loans. The fee will be automatically deducted from the principal
Effective APR: Be aware of the new APR calculation that considers the origination fee, which could affect your returns.
For Borrowers
Pro Rata Loans: If opting for a pro-rata loan, note that early repayment will minimize interest costs.
Origination Fee: Note that the origination fee will be deducted from the loan amount you receive.
Last updated