How does DMEX’s FIL mining power NFT collateral loan works?

The collateral loan has been known as the ‘cornerstone’ of the DeFi system. It can simulate the financial system in the real-world, interpret different financing needs of various users, and accelerates the capital flow between users.

In traditional financial institutions, if you want to secure a collateral loan, you will have to go through a series of complicated procedures such as identity check, asset evaluation, contract signing, and loan issuance, which is very troublesome.

However, with FIL mining power NFT collateral loan, you can simply pledge your FIL mining power NFT through smart contracts to easily obtain your loan. The pledged FIL mining power NFT will continue to generate mining income for you. You can keep the liquidity fund for yourself

In order to solve the liquidity challenge, the FIL mining power NFT collateral loan adopts the asset pool model. The platform will create an ‘NFT collateral loan pool’ in advance, and allocate a certain proportion of the platform token DMC’s daily mining output in this pool.

In other words, the ‘NFT collateral loan pool’ will be consist of three digital assets, namely, FIL mining power NFT, platform token DMC, and FIL. Both the lenders and borrowers will complete the entire business process of pledging and lending within this common pool.

If you are the lender, you just need to deposit your FIL into the ‘pool’, then simply wait for your FIL interest and DMC income. You can withdraw your deposit anytime you want. This is similar to the demand deposit in a centralized bank.

If you are a borrower, you need to pledge two digital assets as the loan collateral, namely, platform token DMC and FIL mining power NFT. The ‘NFT collateral loan pool’ will automatically adjust the DMC pledge ratio to regulate the ‘borrowing credit limit’, so as to maintain the lending/borrowing balance of the asset pool.

Upon the completion of the pledge, you can start borrowing FIL tokens right away. This is a great solution for the liquidity challenge of mining power asset circulation. You are free to dispose of your borrowed FIL tokens. You could sell your future income in advance to hedge against risks. Or you could purchase more ‘FIL mining power NFT’ from DMEX’s mining power marketplace, and pledge them into the ‘NFT collateral loan pool’ again to obtain more loans. Rinse and repeat, you could earn a continuous flow of wealth…

Similar to the design logic of centralized bank loans, FIL mining power NFT collateral loan will also incur an interest fee. During the loan’s term, the mining output generated by the borrower’s pledged ‘FIL mining power NFT’ will be automatically used to repay the loan. The repayment schedule will prioritize the interest before the principal. The ‘NFT collateral loan pool’ will unlock the pledged ‘FIL mining power NFT’ and DMC proportionate to the borrower’s principal repayment

Of course, the borrower can also terminate the borrowing process early at any time by paying off the principal and interest so as to unlock all the pledged FIL mining power NFT collateral. It is worth noting that when the total amount of pending repayment is equal to or greater than the set percentage of the current valuation of the pledged FIL mining power NFT. This will automatically trigger a forced liquidation procedure in the smart contract. The system will automatically put the borrower’s ‘FIL mining power NFT’ on sale in the DMEX mining power marketplace. The sale proceeds will be used to repay the borrower’s loan. If there’s any remainder, the leftover fund will be returned to the borrower. Therefore, it is important that the borrower should always make repayments on time

In short, the FIL mining power NFT collateral loan can guarantee user’s asset income with six procedures and mechanisms, namely, ‘deposit’, ‘withdraw’, ‘lending’, ‘repayment’, ‘borrowing limit control’, and ‘liquidation’. These designs will maximize the potential of mining power assets!

This is the ground plan of FIL mining power NFT collateral loan. Join us now to experience this new product now!

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DMEX is a decentralized mining power financial service platform utilizing DAO and smart contract to provide innovative DeFi and NFT products.