Collateral Valuation

Leaving obsolete floor pricing behind with the help of third-parties.

In the world of NFTs, valuation poses a significant challenge, largely due to the unique and often subjective characteristics of each asset. Unlockd addresses this challenge with an innovative appraisal model.

Challenges of Floor-Based Appraisals

  • Subjective Value Factors: The value of PFPs, gaming and other types of NFTs are influenced by dynamic factors like rarity, trends, and utilities available to the holder, making objective valuation difficult.

  • Inadequacy for Real World Assets (RWAs): The use of floor prices is particularly problematic for RWAs. Unlike digital NFTs, each RWA represents the tokenization of a distinct real-world asset, each with its unique characteristics and value. There's no 'floor price' that can accurately represent the value of these diverse and individualized assets. RWAs require a more tailored valuation approach that considers their specific attributes and real-world market conditions.

  • Limitations of Current Methodology: Relying on floor prices for valuation leads to significant undervaluation and market inefficiencies. This simplistic approach is not only unsuitable for RWAs but also limits Loan-to-Value ratios and results in high APYs, creating an inefficient and illiquid market.

  • Contradiction with NFT Nature: Using a uniform floor price contradicts the essence of NFTs, which should be valued individually due to their unique nature. This is especially true for RWAs, where each tokenized asset has its distinct value in the real world.

Unlockd's approach to valuation addresses these challenges by offering a more accurate and individualized assessment of each asset, whether it's a digital NFT or a tokenized real-world asset.

Unlockd's Advanced Appraisal Model

  • Collaboration with Specialized Partners: Unlockd partners with third-party experts specializing in NFT valuation to overcome the limitations of floor-based appraisals.

  • Individualized NFT Appraisal: Each NFT is appraised separately, using diverse models, input variables, and Data Science techniques provided by our partners. This approach ensures a more accurate and fair assessment of each NFT's value.

  • Integration with Dynamic LTV Model: The appraised values, along with their error bounds, are integrated into our Dynamic LTV Model. This process results in a final borrowing amount that reflects a more precise and individualized valuation of the NFT.

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