Permissionless lending for NFTs

NFT lending is no longer reserved to bluechips and high profile collections, any project can now setup lending in just a few clicks. This opens the door for novel asset types and new collections to be traded instantly.

Permissionless

Adjective— Accessible to everyone, without a need for authorisation.

Permissionless is at the core of DeFi, it is what separates us from the banks and centralised entities controlling your funds.

You don’t need anyone’s permission to get a loan in DeFi, it’s freely accessible to everyone.

Today, Honey takes this even further, re-emphasising the importance of decentralised and permissionless finance by allowing anybody to create their own markets.

How does it work?

DAOs, NFT projects, or Individuals can now become market admins, creating and operating markets on Honey Finance for profit.

Any Solana NFT collection supporting the Metaplex standard can be used to spin up a lending market, inviting lenders and borrowers to engage in isolated markets hosted on Honey.

A UI tool has been created to help admins create markets in just a few clicks.

Incentives

Admins can make fees on the lending volume of their markets.

An admin fee can be implemented when creating markets, taking a commission on the interest paid by borrowers to lenders. This commission can range anywhere between 0% and 50%.

These are meant to subsidise the overhead of maintaining markets, such as funding a custom oracle or cranking custom liquidation mechanisms.

Orange checkmark (Verified vs Unverified)

Permissionless markets are first listed as unverified. This is a warning to lenders / borrowers that the market has not been vetted by the Honey DAO.

To become verified on Honey, admins must create a verification proposal for their markets. This proposal requires 10 million veHONEY to be approved, inviting DAOs to enlist their communities for the vote, or to bribe existing veHONEY holders.

The first verified markets will be:

Lifinity
OG Atadians
Pesky Penguins
Honey Genesis Bees
Solana Monkey Business

Multiple markets can exist for the same collection, creating competition between admins to offer the best rates. However only 1 verified market can exist per collection.

Curation

To avoid spam, veHONEY is required to create permissionless markets. At first, market creation will require 50k veHONEY to be held by admins.

To obtain 50k veHONEY, you will first need to acquire HONEY and vest it for a period of time. Below is a table breaking down how much HONEY you will need based on your lock duration:

50k HONEY needed if vested for 4 years
200k HONEY needed if vested for 1 year
400k HONEY needed if vested for 6 months
800k HONEY needed if vested for 3 months
2.5M HONEY needed if vested for 1 month

Permissionless markets will not only allow for a range of new use cases and collateral types on Honey, but also ensures the best rates for NFT lending through inter-market competition.

Alpha testing for permissionless will begin next week.