Gondi is the most composite and flexible defi primitive. Gondi loans provide continuous underwriting, allowing any outstanding loan to be refinanced, creating a more dynamic and liquid ecosystem.
Gondi NFT Lending
Advantages for borrowers
- Interest only accrues based on the repayment period.
- No oracle or sudden liquidations.
- Continuous improvement of loan terms without cost or extra work. Lenders will automatically refinance your loan if the new loan terms are strictly favorable to you.
- Unlock your loan by selling your collateral on Gondi to pay off your loan and keep the excess proceeds.
- Get loan renegotiation offers from current and future lenders, expanding your options to the entire market.
Advantages for lenders
- Increase capital efficiency: originate new loans, instantly refinance existing loans, and participate in open market renegotiations.
- Underwrite loans at your own pace, taking advantage of opportunities to originate new loans or refinance existing ones.
- Flexible loan renegotiation with customizable fees on any outstanding loan, including your own.
- Optimize your budget management by creating fundraising proposals with specific loan options.
- Tranche refinancing to refinance only a portion of your loan when liquidity is limited.
NFT Loan Refinancing
APR reduction is required to refinance all loans.
Lenders can refinance any outstanding loan without borrower participation by reducing the interest rate on the loan by at least 5%. However, to extend the maturity of the loan, the minimum improvement is 10% of the remaining term of the loan, rounded up to the nearest whole day.
Lenders can also extend the maturity of the loan if the annual percentage rate is reduced in doing so.
Refinancing doesn't allow you to shorten the repayment period of the loan under any circumstances.
An increase in the principal amount of the loan is also possible if the APR decreases so much that the daily interest paid by the borrower is reduced on net. In a refinance that results in an increase in principal, the net increase is transferred to the borrower's wallet.
Refinancing Lock-ups
When a loan is refinanced, the new lender transfers both the principal amount of the loan and the interest accrued up to a certain point to the original lender. This process may be repeated several times, with each new lender taking responsibility for the interest that has accrued since the loan was originated.
Each time a loan is refinanced, a lock-in period begins during which the loan can't be refinanced to guarantee the lender a minimum term. The lock-up period is equal to 5% of the remaining time to the maturity date.
Partial refinancing (Tranche)
A loan may be partially refinanced, that is, it may consist of 10 different tranches, each of which must be at least 5% of the total principal amount. As with a full refinancing, with a partial refinancing the APR must be reduced by at least 5% for the selected principal amount.
Renegotiation
Overdue loans can also be renegotiated by any lender. Negotiation is useful when the proposed terms of the loan aren't strictly better than the terms of the outstanding loan. For example, a borrower may want to extend the term of the loan in exchange for a higher interest rate. Such a new loan term would require a renegotiation offer.
Lenders may also include a loan origination fee in the renegotiation offer. Loan renegotiation is not limited to the respective lender(s), but is available to all.
Unlike refinancing, renegotiation requires the borrower to accept a renegotiation offer because the terms of the loan are not strictly better than before.
In Gondi, borrowers are required to pay accrued interest in order to accept a renegotiation offer.
Refinancing lock-ups are also applied after the borrower accepts the renegotiation offer.
Loan defaults
Loans made by a single lender that fail to repay the principal plus accrued interest early are considered to be in default. In such cases, the lender takes possession of the collateral by foreclosing on it.
Defaulted loans with two or more tranches go through an auction process.
The auction is a 72-hour English auction where bidders openly bid against each other, with each bid being 5% higher than the previous bid.
