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collateral-and-loan-terms.md

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Collateral and loan terms

What type of collateral can be used for a loan?

Any digital asset which implements the ERC-20, ERC-721, or ERC-115 standards can be used as collateral for a loan on PWN.

Some assets which predate common usage of these standards, such as CryptoPunks, have standard wrapper contracts which will enable them to be used on our platform.

If you have an asset that is not supported and you would like to discuss how to get it onto the platform, please contact us at [email protected].

How much do I pay in interest?

The interest paid is determined between the lender and borrower. If you believe that the interest a lender is offering is too high, you should wait for better offers on your loan request.

When do I need to pay back the loan?

The loan duration is agreed upon at the start of the loan, as determined by the lender's loan offer. If the duration offered does not work for you, you should wait for other offers on your loan request.

How do I pay back the loan? When do I get my NFT back? What happens if I don’t repay my loan?

You can pay back the loan at any time before the duration ends, simply by having the amount to repay in your Ethereum wallet and making a transaction to repay the loan via the PWN Platform.

After repayment, your collateral is transferred back to your wallet from the PWN Protocol.

In the event that you do not repay your loan, your collateral will be kept in the PWN Protocol and can then be claimed by the lender.

How does liquidation work on PWN?

There are no liquidations on PWN before the end of the loan period. If the value of your collateral drops below the value of the loan, nothing will happen.

If that value holds until the end of the loan, it may not make sense to pay it back, in which case you have the option of forfeiting your collateral. This is part of the risk the lender must weigh when determining their offer of an APR, amount, and duration.