DelegaNFT

Delegate your credit from AAVE with a peer-to-peer lending protocol where delegators accept NFTs as collateral from DelegaNFT.

Inspiration

The NFT ecosystem has grown at a vertiginous speed during the last year. However, all this value has not been able to enter the DeFi ecosystem, allowing an expansion of the TVL in DeFi and a way to earn higher yields.

Our inspiration came from the our desire to use our own NFTs as collateral using a system that has already a lot of capital, so that capital access isn't a problem and to give AAVE lenders an opportunity to earn a fix yield from their credit value and at a same time a way to buy high valued NFTs at a discount price.

What it does

It allows NFT holders to use them as a collateral to get the credit competence from an AAVE credit delegator. At the same time, it gives a chance for delegators to earn a fixed income from their credit power, where the only risk is changing the NFT for debt. This means that delegators have to choose NFTs as collateral that they are willing to get at the credit price.

How we built it

Due to our current reduced team in the hackathon we haven’t been able to accomplish all the goals we had for the project.

However, the idea is to create a marketplace where NFT holders can create offers to Aave credit delegators, and allow them to accept of make counter offers to get to an agreement. The protocol is built with a smart contract that automatically calculates AAVE interest rate during a certain period of time, so that the borrower has to pay back the AAVE interest rate + a fixed yield to the delegators. This creates a fixed income market for lenders in AAVE who are willing to take a risk.

The risk by the way is minimized, because in case the borrower doesn’t return the principal + the interest in the established time, the delegator would keep the NFT. This gives an opportunity to borrowers to access liquidity thanks to their NFTs and lenders to earn fixed yield or buy NFTs at a discount price.

Challenges we ran into

To develop such a project with only one hacker was a recurrent running out of time feeling. We had also to go deep into the credit delegation aave feature which is so new and no well documented yet.

Accomplishments that we're proud of

We are proud of the idea and the speed we had in developing the Dapp. Our team was small in developers and this was an important stopper so that we could finish everything on time. However we’re planning to end the protocol in the following weeks and open it to the public, trying to access as well to AAVE grants.

What we learned

During the process we learned how to correctly use the credit delegation system from AAVE, and also realized there were some errors in the documentation of the smart contracts. These issues delayed us a bit but allowed us to really understand how the delegating mechanism works.

What's next for DelegaNFT

The next steps for DelegaNFT are simple: finish the smart contracts that enable the correct functioning of the protocol and add some interesting features that are not currently available.

Ability for borrowers to return part of the debt at any given time before the ending debt period. Create a front-end experience for credit delegators to calculate their debt risk and decide how much credit power they want to delegate. Show the full traceability of activity from the NFT, to give a better knowledge of the value of the NFT to the credit delegators. Finish the protocol and apply to the AAVE grants so that we can go public and offer this service to all AAVE lenders and NFT owners.