MTC Blockchain Pawnshop

Inspiration

Inspiration When I was a kid my father took my video games console to a pawnshop, I did not know what it was and did not understand clearly why he was doing that, since he knew I loved it and it was one of the best gifts I could ever have in my childhood, but he did his best to explain how the money will serve a better purpose to our family. I gathered enough courage to contain the cry in that lonely and hot summer afternoon at the pawnshop, leaving my video games console behind, to never see it again.

When my father lost the article at the pawnshop, that was a shocking moment for me, since he was late to pay the loan and also the money was not enough anyways because he ultimately had to borrow more from usurers. As a result, the money was not enough, he was unhealthy in debt and I lost my video games.

This story is far from over decade after decade, in different forms, where we had been at the mercy of financial institutions and usurers. Those traditional business have their days counted, because we now have an opportunity, and that opportunity is called blockchain, it gives us a chance to have real decentralized finance, and be able to negotiate our digital assets, such as NFTs, to have liquidity, with prices determined by market and rules negotiated by a community, from person to person, without intermediaries.

What it does

MTC Blockchain Pawnshop is the place where lenders and borrowers deal together using NFTs as collateral so borrowers can request loans, and lenders can lend without intermediaries. The loans are subject to an interest rate, and this is a parameter in the contract so it later can change and be adjusted by market or governance in the future. In case borrowers do not pay the debt by due date, then the NFT is listed for sale cheaper than market to distribute revenue among lenders.

One cool thing about our platform is that one loan can have many lenders, so the debt is funded by many participants with different amounts, and the lender can be diversified in its portfolio.

What we learned

We learned professional tools to develop a blockchain project from the very best experts in the ecosystem, we attended over 30 workshops by chainlink and its partners/sponsors where we learned to use hardhat, we learned the basis of solidity using Remix, we also learned to consume Moralis to develop more productively and got a deep dive into blockchain fundamentals very intense and express to learn as fast as we could and actually build something. It was a great experience to get a broad vision of what the ecosystem is doing and who and what are the main players.

We had some challenges to prototype because some tools were new to us, but thanks to chainlink workshops and official documentation we followed the tutorials and got enough knowledge to implement.

How we built it

We built the solution using chainlink services such as PriceFeed [Alchemy helped a lot] and Keepers, which helped us a lot to keep the project decentralized, and we also used Moralis to avoid the complexity of setting up our own node and dealing with RPC calls. In addition we use the latest solidity version, HTML 5 and Javascript.

Challenges we ran into

When we began with this project some of us started with zero knowledge about blockchain development. While developing this project we noticed that some of the documentation was outdated, most of the tutorials are not focused on development but minting NFTs easily. Creating an smart contract like this pawn shop is a challenge since we needed to keep track of every state, every NFT and lending because one mistake could lock everything inside the contract

Accomplishments that we're proud of

We were able to build a complex solution like this pawn shop. This project has several ways to improve business with NFTs.

We managed to build a POC within the timeframe.

Understanding important tools to quickly build the solution, Moralis is an example. After this hackathon we are able to explain this technology to our friends and show them that they can join the Blockchain revolution too.

What's next for MTC Blockchain Pawnshop

This is just the beginning of greater innovation, it is part of our roadmap to offer users the ability to vote on interest and contract parameters, also to leverage the NFTs as much as possible to generate greater revenue to lenders and lower interest rates to borrowers in a win-win relationship.

One way of achieving this is by providing a DAO for users to govern the online business, and they can vote on interest rates, minimum and maximum amounts to accept, and the valid NFT contracts that can be taken into custody. Another thing we can add is to lease the NFTs while they are in our custody to maximize revenue to lenders. And, apart from listing the NFTs for sale when the user does not comply with payment by due date, we can also list it in auction to increase revenue to lenders. By taking enough measurements of maximizing revenue to lenders we reduce risks to them, so we can offer lower interest rates to borrowers.

Built With

• alchemyapi
• chai.js
• chainlink
• ethers.js
• hardhat
• javascript
• metamask
• moralis
• solidity
• web3.js