Overview of Fluid Tokens Borrowing & Lending Protocol on Cardano
Contents
Fluid Tokens is a platform that allows users to use their Cardano Non-Fungible Tokens (NFTs), digital art pieces, and other Cardano native tokens as collateral to get loans in ADA and other Cardano native tokens. This allows users to unlock the value of their NFTs or earn extra rewards by loaning their utility tokens for others to use for governance or trading on various platforms.
Here’s how it works:
- Borrowers (NFT owners) can list their NFTs on the Fluid Tokens platform, setting how much ADA they want to borrow, for how long, and the interest rate they’re willing to pay. Their NFT is locked in a contract with these terms.
- Lenders look through these loan requests and choose which ones to fund based on the information and their own judgment. If they agree to a loan, they send ADA to the borrower, starting the loan period.
- Featured Loans: Borrowers who burn some of their Fluid Tokens (the platform’s own currency) can get their loan requests highlighted to attract lenders.
- Repayment: Borrowers need to pay back the loan in one payment to get their NFT back. If they don’t pay back on time, the lender can claim the NFT, but the system allows for late repayment without extra charges if the lender hasn’t claimed the NFT yet.
- Fees: Lenders pay only the transaction fee for starting the loan. Borrowers pay a platform fee based on the loan amount, which can be reduced by owning Fluid Tokens.
- DAO (Decentralized Autonomous Organization): FluidToken holders can vote on changes to the platform, including which NFT collections can be used as collateral.
Fluid Tokens allow NFT owners to get loans based on their digital assets, with a system that rewards participation and offers flexibility in loan repayment.
Renting of Assets
With the creation of digital assets such as videos, movies, books, and music on the Cardano blockchain as NFTs, renting those items out to users who want to use them for a short time is now possible. Lenders can provide their digital assets on the platform for a period of time for a fee, and borrowers can provide the ADA or asset required for borrowing, including additional fees. The required assets in the loan are returned to the borrower when the asset is returned.
Boosted Stake
Boosted stake revolves around renting out the staking permissions of your ADA. This is a unique feature in that you only rent out where your ADA is delegated to and where those rewards go. The actual ADA doesn’t get lent to the borrower in this case and the borrower can not use it for trading.
In this case, the borrower can make gains by delegating the ADA to their stake pool or in Initial Stake Pool Offerings where they can earn more ecosystem tokens.
The lender wins out by earning more in interest on their lent-out asset than simply staking their ADA to a stake pool where the average returns are approximately 3.2%.
$FDLT Token
The Fluid Tokens platform launched its core asset, $FLDT token, to empower its community with significant advantages and authority. These tokens were introduced with a total supply limit of 100 million units and were made available through staking on various stake pools in the Cardano ecosystem during its Initial Stake Pool Offering and through its sale mechanism via the Minswap DEX in its Liquidity Bootstrap Event (LBE).
This distribution method was chosen to ensure fairness, avoiding early sales to big investors (VCs) and presales, creating one of the most equitable and user-friendly systems in the web3 world.
The sale of $FLDT tokens commenced on January 18, 2024, via the Minswap LBE.
Holders of $FLDT tokens were granted discounts and access to premium features across Fluid Tokens’ services on various blockchain networks. Additionally, they were allowed to participate in managing the platform’s funds to generate more income. By acquiring $FLDT tokens, individuals became part of a pioneering effort to innovatively integrate decentralized finance (DeFi), digital art tokens (NFTs), and real-world assets.
$FLDT was built on the Cardano blockchain, ensuring it operated on a secure and efficient network. This strategic choice highlighted the token’s role in the future of merging DeFi, NFTs, and tangible assets in the digital space, marking a significant step forward in the evolution of blockchain technology and its applications.
Watch the latest interview with Matteo Coppola in regards to the latest updates with Fluid Tokens for 2024.
