OpenSky Finance
The first integrated peer-to-pool and peer-to-peer NFT lending protocol built on top of Aave
How OpenSky Works
OpenSky Finance is the first integrated peer-to-pool and peer-to-peer NFT lending protocol built on top of aave.com. Lenders enjoy 100% capital efficiency, earning from Aave, Instant loans and Bespoke loans. Instant loan borrowers can borrow immediately based on the floor price of their whitelisted NFTs. Bespoke borrowers can borrow flexibly if they want to borrow more with special whitelisted NFTs. Instant borrowers need not worry about forced liquidation since an Instant loan can only be liquidated if the borrower fails to take action to modify or repay the loan when it is due.
Features
OpenSky Instant Loan
Lenders deposit their ETH or USDC into an OpenSky EARN vault and start earning AAVE deposit income and Instant loan interest immediately. The deposits can be withdrawn anytime. No specialized NFT knowledge is required to earn safe and capital-efficient passive income.
Borrowers stake their whitelisted collection NFTs, such as BAYC, and can borrow instantly based on a percentage of the floor price. The loans have a fixed interest rate and due date and can be repaid early without penalty. OpenSky is the first NFT lending protocol to offer peer-to-pool loans with no liquidation risk based on the NFT floor price. The borrower can not be liquidated unless they fail to modify or repay their loan by the expiry of the grace period (initially set to 48 hours subject to DAO vote) at the end of the predetermined loan term.
OpenSky Bespoke Loan
Borrowers can make a loan offer for an NFT that is not on the Instant loan whitelist or for a high value NFT (such as Alien Punk) that is part of a whitelisted collection, such as CryptoPunks. Initially, only certain NFT collections will be whitelisted for Bespoke loans, but later this will be opened up to DAO voting. Lenders select the desired borrow amount, term, and APR.
Lenders can see the listed Bespoke loan offers and use their Aave pool deposits to accept offers on a first-come, first-served basis. This is highly capital-efficient because the pool deposits keep earning until a Bespoke offer is made. Also, when a Bespoke loan is repaid, the funds are paid back to the Aave pool and the lenders start receiving the Instant loan income without interruption.
Liquidation Mechanism
Instant loan liquidation
OpenSky Finance is the first NFT lending protocol to eliminate price-based liquidation for peer-to-pool loans.
As long as the borrower takes action to repay or modify (i.e. extend) the loan during the 2-day grace period when the loan matures, they will maintain control of their pledged NFT.
In the rare instance of the borrower failing to take action on time, the NFT loan will be repaid by the OpenSkyDAO and the NFT will be transferred to the OpenSkyDAO Treasury where it will remain as an investment until OpenSkyDAO members vote on how to dispose of the acquired NFT assets.
Bespoke loan liquidation
The Bespoke loan liquidation mechanism is very straightforward. A borrower makes a Bespoke NFT loan offer and a single lender funds the loan using their pool deposits.
If the borrower does not repay the loan back to the lending pool when it is due, the NFT will automatically be transferred to the Bespoke lender’s wallet by the OpenSky smart contract. This process works very similar to NFTfi. OpenSky Finance will send repayment reminders to minimize the risk of forgetting to repay the loan on schedule, but the borrowers are ultimately responsible to manage their loans to retain ownership of the pledged NFTs.