Lending

Providing liquid SOL to a borrower to gain an interest in return.

How lending works

Lenders can profit by providing borrowers with liquid SOL. The loan amount will typically be below the floor price of set NFT which we will call Loan-to-floor or LTF from now on.

The lender makes a profit on the loan by getting interest paid on the SOL when the borrower repays the loan. Some protocols like SharkyFi will have a set ‘Annual Percentage yield’ or APY while other protocols like Citrus allow the APY to be customized for each loan. This interest is then calculated for the duration of the loan.