Honey Finance is a lending and borrowing protocol that provides instant liquidity for derivatives, NFTs and real world assets.
Peer-To-Pool NFT lend
For each collateral (NFT collection), there is a different lending pool. These pools bring together borrowers and lenders of the same collateral. Lenders provide liquidity (USDC or SOL,WETH, etc.) to the corresponding lending pool of the NFT collection. Borrowers can borrow this money by providing their NFTs as collateral.
There are three main participants in Honey loan pools:
- Borrowers borrow money by depositing NFTs as collateral. Interest is charged on open positions with a variable interest rate. Each position has a loan-to-value ratio and a liquidation threshold. If the value of the collateral falls or the loan is insufficiently repaid, the NFT can be liquidated.
- Lenders deposit tokens to lending pools and receive income from accrued interest or liquidations.
- Admins create lending pools and set an administration fee. Liquidations and interest payments will include this fee, generating revenue for the pools admin. Administrators can be DAOs, projects, or individuals.
- Bidders bid on liquidations to purchase NFTs at a discount as they are liquidated.
P2P NFT lending
Honey P2P is designed as a layer 2 application on top of the Honey lending protocol. It is designed to improve capital efficiency in the protocol by allowing lenders and borrowers to get close to each other in peer-to-peer (P2P) markets.
This application can exist on its own and be used as a common peer-to-peer lending marketplace.
Honey P2P focuses on supporting financial NFTs such as options, derivatives or complex liquidity positions. As a permissionless dapp, anyone can use it to provision any NFT and create open use cases on top of Honey P2P.
