Physical Assets

Financial Assets

Unlockd is pioneering a new chapter in financial services by reshaping the landscape of real-world assets (RWAs) liquidity.

Our mission is clear: to break down the traditional barriers that have long confined RWAs to the realm of institutional investors and centralized entities, opening up a wealth of opportunities for individual investors.

Redefining RWAs liquidity with a trillion-dollar opportunity

RWAs represent the largest untapped market in DeFi - a staggering $16 trillion opportunity. Yet liquidity remains constrained for most. These assets have been confined to institutions and accredited investors, gated by complexity and barriers to entry.

But something profound is happening: retail participation in RWAs is reaching an inflection point. Individual investors are now demanding accessibility to real-world, less-liquid asset classes.

Unlockd is making this a reality.

Our permissionless protocol unlocks instant liquidity for tokenized real-world assets through a seamless lending experience requiring only a wallet. No institutions. No middlemen. No financial gatekeepers.

The possibilities this unlocks for wealth creation and financial inclusion are immense. With streamlined access to RWA liquidity, we can transform RWAs into the most dynamic and exciting asset class in the world for the first time in history.

The RWA revolution is here. And Unlockd sits at the forefront with an innovative model to make RWAs liquid, accessible, and abundant for all.

Democratizing finance with the only permissionless RWA-backed lending protocol

Complexity and red tape have long blocked mainstream access to real-world assets. But the desire for permissionless finance persists. Investors are demanding RWA exposure without gatekeepers.

That’s why we built Unlockd - the first inclusive RWA liquidity solution requiring only a wallet.

We believe RWA lending should be accessible to all, not just institutions. With cutting-edge technology, we provide instant RWA loans at optimal rates through an elegant Peer-to-Pool model requiring no middlemen. No Peer-to-Peer or centralized complexity here. Just a wallet.

Other platforms are limited by geography, accreditations, and legacy finance barriers. Unlockd has no limits. Our scalable architecture and intuitive interface invite RWA investors globally to seamlessly access liquidity and retain 100% of the asset ownership and utility.

Powered by AI and machine learning, our pricing engines and dynamic risk algorithms adapt to any market condition for responsible asset-backed lending. No other protocol unlocks RWA value instantly with such advanced automation and accessibility.

RWA lending is complex no more. Unlockd is the gateway to boundless liquidity for tokenized real-world assets - a permissionless ramp for the next generation of global RWA investors.

What are these docs about?

Here you will find detailed insights into how our protocol functions, step-by-step guides on utilizing our platform, and a wealth of resources to assist you in navigating the RWA market with confidence and ease.

Our documentation is designed to be your go-to source for all things Unlockd, providing clear, concise, and user-friendly information to ensure you make the most of our innovative platform.

We want users from all backgrounds, geographies, and experience levels to seamlessly access the trillion dollar RWA opportunity. That is why our documentation is designed for clarity and ease-of-use above all else.

Unlockd's innovative approach to RWA-backed lending focuses on four key areas that set up apart:

• Take loans instantly with the only permissionless protocol in RWA Finance.

• Enjoy AI for real-time asset appraisal and mathematically optimal loan rates.

• Bundle up to 100 RWAs in the same loan for diversified risk and enhanced borrowing power.

• Keep enjoying all the compliance adherence, custody and utility associated with owning your assets while deposited.

Permissionless, Simple & Instant

Unlockd revolutionizes the RWA lending market by prioritizing accessibility and simplicity, being the first permissionless protocol that allows instantly borrowing against real estate, luxury watches, collectibles, precious metals, gemstones, fine wine and financial assets.

1. Ease of Access: Our platform eliminates complex verification processes, making it accessible to everyone and fostering a truly inclusive financial environment.

2. Simplified User Experience: We have designed our interface to be intuitive, allowing users to easily navigate our lending options without unnecessary complications.

3. Instant Loan Execution: Understanding the dynamic nature of the crypto market, Unlockd ensures immediate loan transactions. Once terms are accepted by the borrower, funds are quickly disbursed, empowering users to seize market opportunities promptly.

AI & Real-Time Risk Assessment for the Best LTV

At Unlockd, we integrate cutting-edge AI technology to redefine asset appraisal and risk assessment in RWA-backed lending:

1. Advanced Collateral Appraisal: The key to our precise collateral valuation lies in our data providers' use of sophisticated machine learning algorithms. Unlike traditional methods that rely on floor prices, our approach assesses each asset individually, determining its true value based on a comprehensive analysis of market data and trends. This method ensures a more accurate, fair, and reliable appraisal of each asset.

2. Dynamic LTV Determination: Our AI-driven system constantly analyzes data of liquidity, volatility and market depth, offering realistic and advantageous Loan-To-Value rates, benefiting both borrowers and lenders.

3. Adaptive Risk Modeling: Our algorithms are tailored to adapt to market fluctuations in real-time, ensuring a balanced and secure lending platform by adjusting LTV rates in response to market trends.

Multi-Asset Collateral: Unprecedented Loan Flexibility

Unlockd introduces the ability to bundle multiple RWAs from various collections or types into a single loan. This unique approach offers several advantages:

1. Enhanced Borrowing Power: By bundling diverse assets into one loan, borrowers can leverage a broader range of assets, increasing the overall loan value they can access.

2. Risk Diversification: This bundling allows for a more balanced risk profile. By not relying on a single asset or asset type, borrowers can mitigate the impact of market fluctuations on individual assets.

3. Simplified Management and Gas Efficiency: Managing one bundled loan instead of multiple individual loans streamlines the borrowing process, making it more user-friendly and extremely gas-efficient.

Full Custody with the Unlockd Account

Unlockd ensures that borrowers retain full custody and ownership of their collateralized assets through our innovative Unlockd Account technology. This feature allows users to remain the custodians of their assets, with Unlockd only intervening to prevent unauthorized transactions during active collateral periods.

1. Custody Preservation: Unlike traditional lending platforms, which require you to forfeit control over your assets, Unlockd allows borrowers to maintain full custody. This means that while your assets are collateralized, you retain complete control and ownership, ensuring security and regulatory compliance.

2. The Unlockd Account: The Unlockd Account is a unique shared wallet technology that securely holds assets as collateral while preventing unauthorized transfers. This approach ensures that borrowers continue to own and control their assets, aligning with compliance and KYC regulations by maintaining transparent and verifiable ownership.

Additionally, maintaining ownership rights enables users to access the full utility of their assets. This includes participating in token-gated events, on-chain activities, airdrops, and staking rewards, even while the assets serve as loan collateral.

Selling your assets means losing the potential upside value gain, triggering a capital gains tax event. By depositing your assets as collateral, you are able to obtain liquidity (working capital) without selling your assets, not incurring capital gains taxes.

The Role of the Unlockd Account in Borrowing

The process begins with your Unlockd Account, a unique feature that acts as the hub for all your transactional activities on the platform. When you're ready to borrow:

1. Deposit Your RWAs: Transfer one or multiple assets from eligible tokenizing partners into your Unlockd Account. This account, a multi-signature wallet, assesses the value of your assets, setting the stage for your borrowing capacity.

2. Assessment and Valuation: Unlockd's system instantly evaluates your assets, considering factors like market demand, rarity, and other intrinsic qualities. This valuation, in conjunction with the Loan-To-Value (LTV) calculations, determines how much you can borrow against these assets.

To learn all the details, check the following section:

Bundle up to 100 RWAs in a single loan

One of the standout features of Unlockd V2 is the ability to use multiple assets as collateral for a single loan. This flexibility allows you to maximize your borrowing power and diversify the risk associated with individual asset volatility.

Learn more here:

Initiating a Loan

When it's time to borrow, the process is streamlined for ease and efficiency:

• Selecting Assets: In the 'Borrow' section, choose the currency you wish to borrow against your asset. Currently only USDC is available to borrow.

• Determining Loan Amounts: The platform guides you in setting the amount based on the collective value and LTV of your deposited assets. The innovative Dynamic LTV model calculates how much you can borrow against your assets. This model adapts to market conditions and the specific attributes of your asset, ensuring a borrowing limit that's both realistic and advantageous.

Keeping Custody and Ownership

Unlockd V2's 'Keep Custody & Ownership' feature ensures you retain full custody and ownership of your RWAs while they serve as collateral. This aids in complying with KYC regulations and maintaining transparent, verifiable ownership.

You also retain access to your assets' utilities, such as token-gated events, on-chain activities, airdrops, and staking rewards.

Managing and Repaying Your Loan

With no fixed repayment period, Unlockd offers unparalleled flexibility in loan management.

You have to repay the loan in the same asset type, along with the accrued interest, at your convenience. For example, if you borrow 1000 USDC you will pay back 1000 USDC + interest accrued.

While the supply and demand ratio of the asset influences borrowing rates, the primary driver is actually the utilization rate of available lending pools. As more assets are borrowed without corresponding deposits, the rate climbs due to increased demand on a limited resource.

As long as your position is safe, you can borrow for an undefined period. However, as time passes, the accrued interest will grow, making your health factor decrease, which might result in your deposited assets becoming more likely to be liquidated.

Avoid being liquidated

Maintaining the health of your loan is crucial to avoid liquidation. Liquidation occurs when the value of your collateral falls below a certain threshold, known as the Health Factor. This typically happens due to market volatility or a decline in the value of your asset collateral.

Monitoring the Health Factor

• Stay Informed: Regularly monitor your Loan Health Factor within the Unlockd platform. A drop below the critical threshold indicates an increased risk of liquidation.

• Alerts and Notifications: Set up notifications in the Unlockd system to receive alerts if your Loan Health Factor approaches dangerous levels.

Proactive Loan Management Strategies

• Partial or Full Repayment: One of the most direct ways to improve your Loan Health Factor is by repaying part or all of your loan. This reduces the outstanding amount and consequently improves the health of your loan.

• Adding Collateral: You can deposit additional assets as collateral to bolster your Loan Health Factor. This is particularly effective if you have assets that have retained or increased in value.

Understanding the Liquidation Process

• Borrower Grace Period: In the event your loan becomes unhealthy, Unlockd provides a grace period for you to take action and rectify your loan status before the liquidation is actually executed.

• Liquidation Mechanics: If liquidation is initiated, Unlockd employs a smart liquidation system designed to minimize asset loss, first with a Liquidation Auction in the Marketplace and, if necessary, using a third-party protocol known as a External Liquidation Gateway.

Full loan terms and characteristics

Unlockd is the only permissionless RWA liquidity protocol powered by advanced AI where users can participate as depositors or borrowers.

It facilitates the safest, most secure, and cost-effective way to borrow against tokenized Real-World Assets and financial assets with instant loans, as well as risk-free, auto-compounding yield directly in USDC for lenders.

It is, at its core, a set of smart contracts deployed to the Ethereum Mainnet (and soon to multiple L2s), where LPs (lenders) deposit their assets in pools to receive yield in exchange for their liquidity contribution.

This is a Peer-To-Pool model, more efficient and fair than other Peer-To-Peer models. Borrowers take permissionless loans with no fixed expiration date, instantaneously, with a fair interest rate, and against their tokenized assets — if they are supported.

Our advanced AI ensures the best loan conditions (asset valuation and smart Loan-To-Value), tailored to your needs, without the complexity.

Everything you need to know, in a nutshell.

Permissionless, Instant Loans Against RWAs

• Efficient Yield Generation: Lenders contribute liquidity to pools, receiving yields in return. This Peer-to-Pool system is more efficient than traditional Peer-to-Peer models.

• Accessible Platform: Unlockd's permissionless nature eliminates complex verification, welcoming a broad user base.

• Rapid Loan Processing: Borrowers receive instant loans against eligible RWAs, with plans for future cross-chain functionality.

• Fair Interest Rates: The platform ensures reasonable rates, without fixed loan expiration dates.

AI-Driven Appraisals and Real-Time Risk Assessment

• Accurate RWA Valuation: Partnering with leading appraisal firms, Unlockd uses AI and machine learning for individual asset assessments, avoiding reliance on floor prices.

• Adaptive LTV Rates: Dynamic LTV adjustments are made in response to real-time market data, benefiting both borrowers and lenders.

Full Custody & Ownership Retention with Unlockd Account

• True Custody Feature: Borrowers maintain full custody and ownership rights of their collateralized assets through their Unlockd Account. This ensures that users remain the custodians of their assets, with Unlockd only intervening to prevent unauthorized transactions during active collateral periods.

• Compliance and KYC Adherence: By retaining custody of their assets through their Unlockd Account, users ensure compliance with KYC regulations and other requirements from asset issuers. This setup makes ownership and accountability transparent and verifiable, facilitating regulatory adherence and proof of ownership and reducing risks.

Robust and Secure Ecosystem

• Proven Security Standards: Audited by multiple auditing firms, Unlockd's protocol avoids common vulnerabilities of other lending platforms.

• Comprehensive Risk Framework: A specialized framework evaluates asset and liquidity risks, providing tailored LTV for individual assets.

Innovative Platform Features

• Multi-Asset Collateral: Unique bundling of various assets into one loan enhances borrowing capacity and diversifies risk.

• Unlockd Marketplace: Offers flexibility in asset transactions, allowing listings across all aggregated marketplaces, instant selling and auctions with attached debt.

• Customizable Notifications: Integration with hashmail enables users to stay informed about their investments and protocol updates.

Future Prospects

• Community-Driven Governance: Transitioning towards decentralized governance, Unlockd is supported by a robust community and prominent investors.

• Planned Developments: Introduction of transaction fees to benefit token holders and expand the DAO treasury, along with ongoing decentralization efforts.

Unlockd's liquidity pools are smart contracts responsible for locking tokens, USDC for instance, to ensure the liquidity of those tokens to be borrowed by users when they take out a loan.

Advanced Pooled Liquidity System

Unlockd stands apart from conventional lending platforms with its liquidity pools. These smart contracts, specifically for USDC, lock in assets to ensure consistent liquidity for borrower loans. This model enhances efficiency, offering a dynamic lending and borrowing environment.

As a lender on Unlockd, your contributions provide vital liquidity, enabling efficient lending processes and earning potential, all within a framework of robust risk mitigation.

Deposit Liquidity and Earn Yield

As a lender, you can deposit your assets into these pools and in return, receive uTokens, representing your share in the pool. This process offers flexibility:

• No Deposit Limits: You can deposit any amount, with no minimum or maximum limits.

• Transaction Cost Consideration: For smaller amounts, it’s important to consider that the transaction cost might outweigh the expected earnings. This is crucial for optimizing your investment strategy.

• Dynamic APY: The yield on uTokens varies with market conditions. Each asset has its own supply and demand dynamics, influencing its Annual Percentage Yield (APY).

• Continuous Earnings: Your earnings are a share of the interest accrued by borrowers when they repay their loans. Future plans may include additional earnings through UNLK token rewards.

Maximizing Earnings with Auto-Compound

Unlockd's lending pools are designed to maximize your earnings and optimize the taxation derived from your profits by providing liquidity. When you deposit your assets and receive yield, it is automatically reinvested in the pool to compound and grow your return exponentially.

Withdraw assets

• uToken Redemption: Withdraw your liquidity by returning the uTokens received during your deposit. These tokens are burned, and your assets are returned.

• Liquidity Availability: Withdrawals depend on the available liquidity in the pool. If the pool’s resources are tied up in loans, you may need to wait for liquidity to free up from either additional lender contributions or borrower repayments.

Minimized Lenders' Risk

The primary risk for lenders is the potential default of borrowers and market volatility affecting the value of liquidated collateral. Unlockd mitigates these risks through:

• Multi-Asset Collateral: This feature allows borrowers to use multiple RWAs as collateral, diversifying risk.

• Diluted Impact: The pooled liquidity model spreads risk across numerous participants, reducing the impact of individual defaults.

• Dynamic LTV Models: These models are designed to minimize the occurrence of loss, except in extreme market conditions.

• Optimized Liquidation Process: Our smart system calculates the most effective liquidation method, including traditional auctions or External Liquidation Gateways.

As a liquidator on Unlockd, you play a vital role in upholding the stability and integrity of the lending ecosystem.

When a borrower's collateral value dips below the minimum threshold, triggering liquidation, your job is to strategically participate in the process to acquire discounted assets while also ensuring lenders are protected.

Monitoring Loans and Identifying Opportunities

• Check Loan List: Regularly monitor the list of active loans sorted by health factor. Focus on those nearing or below the critical 1.0 threshold, as they present liquidation opportunities.

• Custom Alerts: Set up notifications for specific loan health factor milestones. When a loan you're tracking falls below a particular level, you'll get an alert so you can take swift action.

• Analyze Collateral: Scrutinize the collateral assets of at-risk loans. Estimate their value based on current market conditions and intrinsic traits like rarity. This allows you to strategize your bids effectively during liquidation.

• Timing: Closely follow market trends, major events, and protocol changes that could impact asset values. Liquidity events often present increased liquidation opportunities.

Participating in Liquidation Auctions

• Bid Strategizing: Determine your auction bids based on current collateral valuations and the starting bid, which is either the appraisal or the Critical Recovery Threshold (CRT).

• Bid Now, Pay Later: Utilize this feature to bid on collateral RWAs without fully paying upfront. The RWAs become collateral for a new loan issued by Unlockd.

• Binding Bids: Understand that your bids are binding on-chain transactions, ensuring auction integrity. The bid amount goes directly to debt reduction.

• Monitor Auction Dynamics: Follow the auction closely as it progresses. Higher bids repay earlier bidders and further reduce outstanding debt.

• Incentive Rewards: If your bid gets outbid, you receive a 2.5% reward on the bid amount for initiating the auction.

Managing Liquidated Assets

• Claiming assets: After winning an auction, manually claim the assets. This transfers ownership to you.

• Timing Liquidations: Consider market conditions and optimal timing when liquidating acquired assets to maximize profits.

• Capitalize on Discounts: If you can sell liquidated assets above the purchase price, you profit from the discount acquired at auction.

The next sections of the documentation teach you how to use every feature and functionality of Unlockd V2.

Appraisal Data Providers

Refer to our dedicated Collateral Valuation documentation to learn about our data infrastructure, third-party providers and their appraisal algorithms.

Reservoir

Reservoir is open infrastructure for trading NFTs and RWAs across major marketplaces and chains. It includes a universal router for creating and executing NFT and RWA liquidity across major marketplaces and within the Reservoir ecosystem.

Reservoir provides Unlockd with a modular set of tools that let us to interact with the NFT market at the appropriate level of abstraction for our application, enabling seamless liquidation options in the following marketplaces:

1. opensea.io

2. looksrare.org

3. x2y2.io

4. sudoswap.xyz

5. nft.coinbase.com

6. rarible.com

7. nftx.io

8. foundation.app

9. manifold.xyz

10. zora.co

11. blur.io

12. cryptopunks.app

13. element.market

14. infinity.xyz

15. universe.xyz

16. sansa.xyz

17. ens.vision

18. magically.gg

19. alienswap.xyz

20. sound.xyz

21. atomic0.com

22. rare.id

23. parcel.so

24. metahood.xyz

25. reservoir.market

26. tessera.co

hashmail

hashmail is like Twilio for web3. They help dApps send personalized email communications (updates, alerts, rewards, billing, and reminder emails) to users’ wallet addresses. They deliver these communications across multiple channels — their web/mobile inbox, Telegram, web2 email, and Discord.

Push Protocol

Push enables cross-chain notifications & messaging for dApps, wallets, users & more.

Nexus Mutual

Nexus Mutual is a people-powered alternative to insurance that uses the power of Ethereum so people can share risks together without needing an insurance company.

Nexus Mutual allows Unlockd to offer our users the possibility of securing risk and potential bugs in smart contract code and covering events like hacks or multi-sig wallet issues.

Spectral Finance

Spectral Finance creates a programmable creditworthiness ecosystem facilitating capital efficiency on-chain through credit risk analysis.

Spectral Finance allows Unlockd to get insight into the Non-Fungible Credit Score of Borrowers and offer them special financial opportunities adapted to their on-chain reputation.

Unlockd has raised a US$4.4M seed round + US$1M bridge round to unlock the full liquidity and utility of the digital asset economy.

Despite having increased both the capital to be raised and the valuation, we are proud to say that Unlockd received offers oversubscribing for more than 3x.

This funding comes from some of the most reputable firms and angel investors in the industry:

• Blockchain Capital (LEAD)

• Sfermion

• Spartan Group

• Play Ventures

• IDEO CoLab

• Bitscale

• Sanctor Capital

• Emoote

• Jets Capital

• Eden Ventures

• Caballeros Capital

• Emfarsis

• Crypto Plaza

• YGG (Yield Guild Games)

• YGG SEA

• BREEDER DAO

• Blockchain Space

• Gabby Dizon (YGG Founder)

• Colin Goltra (YGG COO and NFT collector)

• Peter Ing (BlockchainSpace Founder)

• Renz Chong (BreederDAO Co-Founder)

There is interest in our product, and we are turning our vision into a working protocol backed by many of the best investors in the industry.

“Unlockd is the missing piece on-chain debt markets need to evolve to their optimal state with a size equivalent to traditional finance. Enabling the use of Real-World Assets, both physical and financial, as collateral is an industry game-changer that will bring to DeFi both institutional and mainstream retail investment.”

— Jorge Schnura, Unlockd Co-Founder

Meet our investors

Blockchain Capital (LEAD)

Blockchain Capital is a leading venture firm in the blockchain industry. In the last 8 years, they have made over 125 investments in companies and protocols in the sector, across different stages, geographies and asset types.

Blockchain Capital leads this seed round of Unlockd.

Sfermion

Founded in 2019, Sfermion is an investment firm focused on the metaverse. Their goal is to accelerate the emergence of the metaverse by investing in the founders, companies, and protocols creating the infrastructure and environments that will form the foundations of our digital future.

Spartan Group

Spartan Capital is a digital asset management firm that takes a fundamental approach to identifying unique investment opportunities in the emergent crypto asset class. Their investment team has over 20 years of experience in investment research and capital management for top-tier firms such as Goldman Sachs and Indus Capital.

Play Ventures

Play Ventures is the leading early-stage VC fund investing in gaming and gaming services startups around the world. The fund was founded in 2018 by former gaming entrepreneurs Henric Suuronen and Harri Manninen.

IDEO CoLab

IDEO CoLab Ventures invests in early-stage distributed web startups and co-creates with them to ship new products and protocols. CoLab works across industries at the intersection of emerging tech, societal systems, and human needs.

Bitscale

Bitscale invests in teams and solutions that bring transparency and efficiency to our world with cutting-edge technologies. They also help with investors relations, community building — by increasing awareness and brand exposure in Russia/CIS as well as in Asia — and post-launch support and advisory.

Sanctor Capital

Sanctor Capital is a thesis-driven investment fund and deploys capital across both primary and secondary markets. As founders and crypto natives themselves, they understand the challenges faced by early-stage projects and provide active investor-side support through mentorship and network integration.

Emoote

Emoote is a venture capital firm dedicated to fostering innovation and growth in the Web3 and digital entertainment sectors. Led by a team of seasoned professionals, Emoote brings a wealth of experience from various industries, including digital entertainment, blockchain technology, and venture investing.

Jets Capital

Jets.Capital supports crypto and Web3 startups at initial stages. Their mission is to help modern technologies to smoothly enter our lives and change the world for the better. They provide a holistic ecosystem for startups to grow and have partners to take care of all aspects - be it advertising, legal, promotion, listings, go-to-market expertise and more.

Ed3n Ventures

Ed3n Ventures is a leading web3 venture studio, dedicated to building projects that enable the open metaverse. They work with founders to provide expertise, funding, and access to Eden’s strategic network of advisors and partners. Aside from their web 3.0 ventures, Ed3n has also been actively building and growing a portfolio of e-commerce and tech startups in Southeast Asia over the past decade.

Caballeros Capital

Caballeros Capital is a private investment firm focused on investing in the blockchain innovation space.

Emfarsis

Emfarsis is an advisory and investment firm based in Asia Pacific focused on crypto, NFTs, open Metaverse and Web3 innovation for social impact. Whether it is international expansion or moving into the metaverse, they splice economic data with real-life human stories to help identify the market opportunity.

Crypto Plaza

Crypto Plaza is the largest crypto economy hub in Southern Europe. Based in Spain, it is a community of the leading companies, startups and investors in the sector. They are a worldwide reference in the Crypto Assets and Blockchain space, and lead the Spanish-speaking and Southern European market.

YGG (Yield Guild Games)

YGG is the world’s leading Play-To-Earn guild that brings players together to earn via NFT games. They are the settlers of the Metaverse and invest in GameFi-related projects.

YGG SEA

YGG SEA is the first subDAO of Yield Guild Games, with the mission of creating the biggest and most sustainable play-to-earn virtual economy in Southeast Asia.

BreederDAO

BreederDAO is the NFT asset factory of blockchain games. They provide high-volume asset production, tailored to specification, for some of the largest guilds in the Metaverse so they can supercharge their play-to-earn economies.

BlockchainSpace

BlockchainSpace is a guild hub for play-to-earn communities, with end to end solutions including CRM, Guild Data Analytics and Guild Financial Bank.

Notable angel investors

• Gabby Dizon (YGG Founder)

• Colin Goltra (YGG COO and NFT collector)

• Peter Ing (BlockchainSpace Founder)

• Renz Chong (BreederDAO Co-Founder)

Unlockd offers a straightforward way to earn yields directly in USDC by lending your assets.

Below, you'll find a step-by-step guide divided into three key sections to get you started, make deposits, and withdraw your earnings.

Related documentation

Unlockd simplifies the process of leveraging your RWAs for instant liquidity without selling them.

This guide walks you through creating your Unlockd Account, depositing RWAs, and securing a loan with straightforward, step-by-step instructions.

Related documentation

Before diving into borrowing or engaging in any debt-related activities on Unlockd, establishing your Unlockd Account is essential. This account is your hub for depositing RWAs, creating and managing loans, and monitoring your digital assets. Here's how to get started:

Related documentation

Once you've taken out a loan against your RWAs with Unlockd, managing it is crucial for maintaining your financial health within the protocol.

This section provides detailed guidance on viewing loan details, adding or removing RWAs from collateral, borrowing more, and repaying your loan.

Related documentation

Here, you'll find comprehensive user guides designed to navigate you through Unlockd's ecosystem, whether you're a first-time visitor or a seasoned user looking to explore new features.

From connecting your wallet to exploring the Dashboard, Earn, Borrow, and Marketplace sections, these guides serve as your roadmap to understanding and utilizing Unlockd effectively.

Unlockd's Marketplace is your gateway to buying, selling, and bidding on RWAs.

From instant purchases to participating in auctions, this guide offers insights into exploring listings, understanding auction mechanics, and making informed decisions.

Related documentation

Unlockd's Marketplace offers a streamlined process for acquiring assets, whether through immediate purchase or by participating in auctions.

You can opt for a direct buy at a fixed price, bid in an auction, or secure an asset instantly with a fixed buyout price while financing it with a loan.

Here's a step-by-step guide on how to navigate these options:

Related documentation

Looking to monetize your RWAs? Unlockd provides versatile options to list your assets for sale or auction directly from your loan's collateral.

Learn how to instantly sell at market value, list at a fixed price, or initiate an auction with or without a buyout option.

Related documentation

Please, refer to our step-by-step guide to Understanding Unlockd Notifications.

Unlockd ensures that users retain full ownership and custody of their collateralized assets through user-specific wallets (Unlockd Accounts). While Unlockd has signing rights to these wallets to prevent unauthorized transactions when assets are used as collateral, the custodial responsibility remains with the user.

• User Ownership and Custody: Users maintain full ownership and custody of their assets. Unlockd does not take custody of the assets but ensures their security by preventing unauthorized transfers during active collateral periods.

• Preventing Unauthorized Transfers: Unlockd’s signing rights are used exclusively to prevent unauthorized transactions when assets are active collateral. This ensures that the assets remain secure and cannot be transferred without proper authorization.

Compliance and Regulatory Implications

• Adherence to KYC/AML Regulations: By maintaining ownership and custody through their Unlockd Accounts, users comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

• Accreditation Verification: For users holding assets that require accreditation (such as certain securities or private equity), Unlockd facilitates the traceability process with tokenizing partners. This is particularly important for tokenized financial assets.

• Regulatory Reporting: The transparent nature of Unlockd Accounts allows for accurate and timely regulatory reporting. This transparency helps in meeting various regulatory requirements, including those imposed by securities regulators and financial authorities.

• Compliance with Custody Rules: Since the user retains custody and Unlockd only prevents unauthorized transfers, this setup complies with custody rules set forth by financial regulators. Users' assets are safeguarded according to industry best practices.

Legal and Security Assurance

• Legal Title Retention: Users retain legal title to their assets at all times. Unlockd’s role is limited to preventing unauthorized transfers, ensuring that ownership rights are not compromised.

• Transaction Security: With Unlockd having signing rights to prevent unauthorized transactions, all asset movements comply with user intentions and regulatory requirements, providing a secure environment.

• Audit and Compliance Checks: Regular audits and compliance checks are conducted to ensure that Unlockd’s practices meet all regulatory standards, providing users with confidence in the security and legality of their asset management.

The Unlockd Account is a cornerstone feature of the Unlockd platform, enabling a seamless and secure fusion of asset liquidity and utility.

This specialized account functions similarly to a multi-signature wallet and is essential for engaging in activities involving debt on Unlockd, such as taking out instant loans or using the 'Bid-Now-Pay-Later' feature in marketplace auctions.

There's no such thing as "signing up" here, this is not a Web 2 account. You do not need an email or password; it's created linking your personal wallet as an authorized signer.

Core Functionality

The Unlockd Account operates as a shared wallet, making it a requisite for any debt-related transactions. It's built on the reliable security infrastructure of Gnosis Safe, providing a trusted environment for your transactions. Although it’s recommended for all transactions on the platform, it’s mandatory when you want to take an instant loan or engage in any debt-related activity.

Setting Up Your Unlockd Account

Creating your Unlockd Account is straightforward:

1. Prompted during your first borrowing action or when opting for 'Bid-Now-Pay-Later'.

2. Connect your personal wallet (like Metamask or Coinbase Wallet) to Unlockd.

3. Approve the creation of a shared wallet, where you're one of three signers – the user, the Delegate Owner, and the Protocol Owner.

4. A gas fee is required for setup; however, using this account will result in lower transaction costs compared to using a standard wallet.

5. Once created, you can access your Unlockd Account by connecting your personal wallet through WalletConnect, offering a hassle-free user experience.

Asset Transfer and Gas Implications

All transfers into and out of your Unlockd Account, whether depositing assets for a loan or withdrawing them back to your personal wallet, require gas. It’s important for users to factor in these transaction costs when managing their assets within the Unlockd ecosystem.

Asset Management and Utility

Your Unlockd Account is versatile:

Before a Loan

Use it as a standard wallet to deposit, withdraw, and manage assets freely.

Checking Collateral Eligibility

To ascertain if your assets are eligible for use as collateral without transferring them, simply connect your personal wallet to the Unlockd platform. The Unlockd Account will read the tokenized assets in your wallet and indicate which ones are eligible for collateralization, streamlining the pre-loan preparation.

Pre-Loan Asset Analysis

Before initiating a loan, you might want to evaluate which assets to bundle based on their valuation and the potential Loan-To-Value (LTV) ratio. To facilitate this, transfer the assets you’re considering as collateral from your personal wallet to your Unlockd Account. It's here that you'll be able to see detailed appraisals and LTV calculations for each asset.

After Loan Initiation

Specific assets used as collateral are managed jointly by you and Unlockd, with two additional signers stepping in to facilitate and safeguard operations.

Thanks to this, you keep full custody and ownership of all deposited assets.

Not Unlockd, not any decentralized smart contract. You are the owner of your assets.

Learn more here:

Signers and their roles

Once you decide to activate a loan using selected assets in your Unlockd Account, these assets enter a shared control mechanism:

• Delegate Owner: Handles collateral assets' delegation.

• Protocol Owner: Engages in two scenarios:

  • Liquidation: Automatically intervenes to liquidate part of the collateral if necessary to recover the loan’s health factor, following our Liquidation Process.

  • Marketplace Transactions: Manages listings or auctions of assets on the Unlockd Marketplace, whether they're with or without debt.

Liquidation and Market Participation

• Multi-Signature Dynamics: When assets are in an active loan, the Delegate Owner and Protocol Owner have joint control to optimize protocol health and maintain asset utility. All transactions performed by the user are executed through one of these two signers.

• Loan Repayment and Asset Freedom: While assets are in an active loan, they reside in your Unlockd Account but are subject to the conditions of the loan. Free assets not under loan can still be transacted freely.

Contrary to the inefficient Peer-To-Peer model, the Unlockd liquidity model relies on Liquidity Pools.

Users contribute their assets to a large pool of liquidity called the Lending Pool. This pool is available for borrowers to borrow from, and lenders share in the interest that borrowers pay back to the pool.

Benefits of Liquidity Pools

The primary advantage of utilizing Liquidity Pools is the immediate availability of funds for borrowers. Unlike traditional Peer-to-Peer lending, which requires matching individual lenders with borrowers, Liquidity Pools allow for instant borrowing without the wait, streamlining the loan process significantly.

uTokens

One of the advanced features of the lending pool contract is the tokenization of the lending position.

When users deposit assets, they receive a corresponding amount of uTokens (uUSDC for the stablecoins pool). All interest collected by the Borrowing Interest Rates model is distributed to uToken holders directly by continuously increasing their wallet balance.

uTokens are the interest-bearing ERC-20 tokens that map the liquidity deposited and accrue interest based on the underlying deposited asset (USDC), with a 1:1 ratio.

uTokens are minted upon deposit. Their value increases until they are burned on redemption (withdrawing the liquidity from the Lending Pool).

uTokens can be safely stored, transferred, or traded, and redeemed for their underlying assets at any time.

Deposit APY

uTokens holders receive continuous earnings that evolve with market conditions.

uTokens holders share the interests paid by borrowers. The borrow interest rates paid are distributed as yield for uTokens holders who have deposited in the protocol, excluding a share of yields sent to the ecosystem reserve defined by the reserve factor. This interest rate is paid on the capital lent out and then shared among all the liquidity providers.

Deposit Interest Rate Curve

You can view the protocol's real-time deposit APY on the Unlockd dApp for providing liquidity in the form of USDC tokens.

This pool provides liquidity for both RWAs and tokenized financial assets.

In this pool, lenders deposit USDC, a stablecoin pegged to the US dollar, which offers a stable value proposition in contrast to more volatile cryptocurrency assets. This stability is particularly advantageous for loans backed by RWAs, as it aligns more closely with the valuation and behavior of real-world financial markets.

When liquidity is deposited into Unlockd pools, it serves as the source of funds for borrowers accessing loans.

However, there are instances when the utilization rate is low, resulting in idle liquidity within the pools.

To maximize the potential of this idle liquidity, Unlockd has introduced the Idle Liquidity Booster. Through this program, the idle liquidity is routed towards the most secure and trusted protocols in the DeFi landscape, engaging in ultra-low-risk farming strategies via the AI-powered maxAPY protocol.

The additional yield generated from these strategies is mainly utilized to boost the yield accrued by lenders when the utilization rate is low. This ensures that lenders benefit from increased returns on their deposited funds .

Additionally, this extra yield will also be directed towards reducing the interest paid by borrowers, providing them with a cost-saving advantage when repaying their loans, when the utilization rate grows.

Unlockd collaborates with specialized third-party experts to overcome the limitations of onchain RWA appraisals. By partnering with these experts, we ensure that each asset is appraised accurately and fairly.

These experts employ diverse models, input variables, and advanced Data Science techniques to assess the value of each asset individually. This meticulous approach ensures that the valuations are not only precise but also reflective of the true worth of each asset.

The appraised values, along with their error bounds, are then integrated into Unlockd's Dynamic Loan-to-Value (LTV) Model. This integration allows for a more accurate and individualized borrowing amount for each asset.

By combining expert appraisals with our advanced LTV model, we provide borrowers with fair and precise loan amounts, ensuring that each asset's unique characteristics and value are accurately reflected in the lending process.

Selling your tokenized assets means losing the potential upside value gain and triggering a capital gains tax event. By depositing your RWAs as collateral, you are able to obtain liquidity (working capital) without selling your assets and not incurring capital gains taxes.

Loan characteristics

RWAs as collateral

In Unlockd, you borrow fungible cryptocurrency against Non-Fungible-Tokens used to tokenize Real-World Assets and financial assets (RWAs). Instead of using fungible tokens as collateral for loans, which is suboptimal since you lock liquid tokens to get other liquid tokens, Unlockd lets yo turn illiquid assets into productive, liquid ones.

100 assets in a single loan with 1 transaction

Borrowers can bundle up to 100 different assets as collateral for a single loan, if they use liquidity from the same pool. This feature allows for significant diversification of collateral, increasing borrowing power and mitigating the risk associated with the volatility of individual assets.

Instant borrowing

Unlockd offers immediate loan availability. Borrowers can access funds instantly from Liquidity Pools, eliminating the traditional waiting period often required in loan processing and the need for individual lender agreements.

True valuation for each individual asset

Each asset is valued individually without resorting to any kind of floor price. Unlockd utilizes specialized appraisal techniques from world-class providers to determine the value of each asset based on its unique characteristics and market conditions.

Dynamic Loan-To-Value

The Loan-to-Value (LTV) ratio is dynamic, ranging from 0% to 75%, depending on the specific asset and prevailing market conditions. This range allows for flexible borrowing options that reflect both the value of the collateral and market trends.

Keep 100% of asset custody

Borrowers retain full custody and ownership of their assets when used as collateral. This ensures compliance with KYC/AML regulations and transparent, verifiable ownership. While the assets cannot be sold or transferred during the loan period, borrowers continue to enjoy benefits like airdrops, staking rewards, and access to token-gated communities.

Open-ended loans

Loans on Unlockd have an open-ended duration, offering borrowers the flexibility to repay the loan at their convenience without worrying about a set expiration date. No rush here, as long as you pay attention to the Health Factor to ensure the protocol's solvency.

Fair interest and flexible repayment

The interest rate is dynamic but follows a linear and fair model, ensuring borrowers are subject to reasonable rates that align with a mathematical model and adapt to market conditions.

Unlockd allows for flexible repayment terms, permitting borrowers to make payments towards their loan either in installments or as a lump sum, depending on their financial situation.

Smart Liquidations that minimizes lost assets

If the Health Factor (HF) of a loan falls below 1, Unlockd's smart liquidation algorithm is triggered to safeguard the health of the lending protocol. This process is designed to be as unobtrusive as possible while ensuring the stability of the platform.

Permissionless and secure

Tax-efficiency for borrowers

By borrowing against assets instead of selling them, Unlockd users may enjoy a more tax-efficient strategy, potentially avoiding the capital gains taxes that would accrue upon the sale of an asset.

In Unlockd, the valuation of Real-World Assets (RWAs) is a critical component, ensuring that loans are backed by accurately appraised collateral.

Our approach integrates data from trusted tokenization partners who specialize in various asset classes. By leveraging their expertise and advanced valuation methodologies, we offer users a transparent and reliable process for RWA valuation.

Real Estate

These providers offer robust and reliable valuation data for real estate assets.

Roofstock onChain

Roofstock OnChain specializes in tokenized single-family houses, offering complete ownership through Home onChain Tokens. Ownership tokens represent full ownership of the entire house, not fractional ownership, with options for crypto or fiat payment and blockchain-based financing.

• Transparent Pricing: The pricing for onChain homes includes all costs, such as marketplace fees, Roofstock OnChain seller fee, closing costs, first-year insurance, and LLC administration.

• Direct Valuation by Roofstock: Each property's value is directly provided by Roofstock OnChain, ensuring clarity and transparency in the appraisal process.

Colliers

Colliers is a prominent professional services and investment management company with a history of delivering significant annual investment returns. They offer comprehensive services across all real estate sectors, including residential, hotels, offices, and more, ensuring deep market expertise.

• Specialized Valuation Services: Colliers provides specialized services like corporate finance, debt advisory, capital markets, and valuation consulting, emphasizing accuracy and reliability in real estate valuation.

• Diverse Sector Coverage: Their valuation covers various sectors, from traditional residential and commercial spaces to specialized segments like data centers, healthcare, and sustainable assets.

Watches

Watches.io

The integration of Watches.io with Upshot's AI network ensures that Unlockd's collateral valuation for watches is grounded in expertise, thorough appraisal processes, and advanced AI-driven data analysis, offering reliable and up-to-date market valuations.

Watches.io brings together a team with over 40 years of combined experience in watch trading and connections in the luxury watch industry.

• Condition and Authenticity: Appraisals are based on watches being in perfect working condition, including original manufacturer boxes and serial numbered cards.

• Inspection Standards: Each watch undergoes thorough inspection by verified watchmakers and checks against databases of stolen watches.

• Detailed Appraisal Data: Appraisals include current fair market value, proprietary liquidity grading, time-weighted volatility estimates, and interval-bounded price performance.

• Data Sources and Methodology: Utilizes public sources like marketplaces, private trading groups, and industry constituents for data, ensuring a comprehensive market understanding.

• Analysis Approach: Appraisals are based on multiple indicators, including internal ranking of data sources, pricing nuances, estimations of liquidity, and market volatility for each model.

WatchAnalytics

Since 2019, WatchAnalytics has been dedicated to providing in-depth analyses, insights, and news from the luxury watch market. Their commitment to accuracy is supported by extensive in-house data collection and a proprietary pricing algorithm. Founded by three young watch aficionados from Milan, Francesco Boni, Francesco Bortolan, and Stefano Fusai, WatchAnalytics launched in November 2022 to make the watch-buying process more accessible.

Chrono24

Chrono24 is a leading global online marketplace for luxury watches, offering easy and secure access to watch enthusiasts worldwide. With over 570,000 watches from more than 32,000 professional dealers and private sellers, Chrono24 utilizes advanced algorithms and data analysis to provide accurate market valuations and ensure transparency in transactions. The platform's robust infrastructure and dedication to security and trust make it a go-to resource for luxury watch buyers and sellers​

Cards

Unlockd utilizes multiple third-party providers' comprehensive data analysis for trading card valuations, offering users reliable and up-to-date market insights for loan collateral assessment.

PriceCharting

• Comprehensive Data Collection: PriceCharting.com aggregates sold listing data from eBay and their own marketplace, processing it through proprietary algorithms to determine current market prices for collectibles like trading cards.

• Algorithmic Pricing Methodology: Their algorithms account for various factors, including recent sale prices, median and average prices, age-weighted averages, and outliers. This ensures a balanced and accurate market price calculation.

• Graded and Ungraded Card Prices: PriceCharting.com provides prices for ungraded cards and various graded conditions, including PSA and BGS grades, ensuring a nuanced valuation based on card condition.

• Exclusion of Shipping Costs: The prices reflect the item's cost alone, excluding shipping or transaction-related expenses for clarity and precision in valuation.

• Quality Control Measures: To maintain data integrity, PriceCharting.com employs automated models and user reviews to remove inaccurate or misclassified sales data, ensuring the reliability of their pricing information.

Specialized Pokémon Data Providers

• PokemonPrices.com: PokemonPrices.com provides a comprehensive database for tracking and valuing Pokémon cards. It offers up-to-date pricing information based on recent sales data, helping collectors and investors make informed decisions.

• PokeCardValues.co.uk: Poke Card Values is a tool designed to help users assess and track the value of their Pokémon card collections. It leverages a bespoke search algorithm that pulls data from eBay UK sales, ensuring accurate and current valuations.

• PokemonWizard.com: PokemonWizard.com is a platform that aggregates pricing data for Pokémon cards. It provides users with tools to manage their collections, track market trends, and obtain accurate price estimates.

• CardMavin.com: CardMavin offers a price guide for Pokémon cards, utilizing historical sales data to provide accurate values for both graded and ungraded cards. It helps determine the worth of their collections and individual cards.

• PokemonPrice.com: PokemonPrice.com specializes in offering detailed pricing information for Pokémon cards, focusing on market trends and providing a reliable resource for collectors to gauge the value of their cards.

• PokeData.io: PokeData.io combines in-depth analysis with a proprietary pricing algorithm to offer accurate, transparent market valuations for Pokémon cards. It aims to make the trading card market more accessible and understandable for enthusiasts.

Coming soon...

The Loan to Value (LTV) ratio defines the maximum amount of currency that can be borrowed with a specific collateral. It’s expressed as a percentage: at LTV=30%, for every $100 worth of asset collateral, borrowers will be able to borrow $30 worth of USDC.

Dynamic Loan-To-Value

Unlockd's Data Science team has developed a sophisticated Dynamic Loan-To-Value (LTV) model, expertly balancing user risk in an optimal way.

The LTV model considers a range of factors, such as the volume of data available for asset valuation and the current market volatility. High-quality, abundant data coupled with low volatility leads to a higher LTV, reflecting the enhanced reliability of the valuation algorithm in stable market conditions.

The model is designed to adjust LTVs in real-time, responding to changes in overall market volatility, specific asset class volatility, and the volatility of individual assets.

Risk Mitigation Strategies

• Proactive Safeguards: Beyond setting loan collateral ratios, the dynamic LTV model plays a crucial role in risk mitigation. It closely monitors reserve levels and the activities of other lending protocols to inform its decisions. An increase in reserves triggers a strategic response from the model, reducing the issuance of new category-based loans, thereby managing selling pressure on the protocol.

• Maintaining Stability: This proactive management of lending activities, based on reserve levels and market dynamics, is vital in sustaining the protocol's integrity and resilience. It effectively shields the protocol from potential adverse effects of market fluctuations, securing its long-term health and reliability.

You can learn about all the aspects of this model here:

Liquidation is a critical process within the Unlockd platform, designed to maintain the balance and security of the lending system. It's essential for both borrowers and lenders to understand how liquidations work, as they play a key role in the platform's risk management strategy.

What Triggers a Liquidation

• Health Factor Breach: Liquidation is initiated when a borrower's Health Factor falls below 1. This typically occurs when the value of the collateral no longer adequately covers the value of the borrowed debt. Such a situation can arise if the collateral's value decreases or if the borrowed asset's value increases disproportionately.

• Market Volatility Impact: Fluctuations in the market can affect the value of both collateral and borrowed assets, potentially leading to scenarios where the collateral is insufficient to secure the debt.

Liquidation as a Protection Mechanism

• For Lenders: From the lender's perspective, liquidation acts as a safeguard. It protects against extreme price drops that could lead to under-collateralization and, consequently, liquidation.

• For Borrowers: Borrowers face the risk of losing their collateralized assets permanently in a liquidation event. This happens when the protocol allows another party to repay the borrower's debt in exchange for the collateralized asset following the breach of the Health Factor threshold.

Avoiding Liquidation

As a borrower, you can avert liquidation by closely monitoring your Health Factor and taking action if it approaches the critical threshold.

• Depositing Additional Collateral: Boosting your loan's Health Factor by adding more collateral can help maintain the necessary buffer against market volatility.

• Partial Loan Repayment: Repaying part of your loan is often more effective in increasing your Health Factor compared to depositing additional collateral, especially considering the impact of LTV ratios.

The Consequence of Liquidation: Loss of ownership

In the event of liquidation, borrowers permanently forfeit ownership of their collateralized assets. This underscores the importance of proactive loan management and understanding the inherent risks.

Liquidation, while serving as a necessary mechanism to protect the integrity of the lending system, can have significant consequences for borrowers. It is essential for users of Unlockd to understand the dynamics of liquidation, how it's triggered, and the steps that can be taken to prevent it.

Careful management of your assets and awareness of market conditions are key to maintaining a healthy loan status on Unlockd.

The health factor is the numeric representation of the safety of your deposited assets against the borrowed cryptocurrency and its underlying value. The higher the value is, the safer the state of your funds are against a liquidation scenario.

For each wallet, the LTV and Liquidation threshold risks parameters enable the calculation of the health factor:

When $H_f < 1$ the position may be liquidated to maintain solvency.

Depending on the value fluctuation of your deposits, the health factor will increase or decrease. If your health factor increases, it will improve your borrow position by making the liquidation threshold more unlikely to be reached. In the case that the value of your collateralized assets against the borrowed assets decreases instead, the health factor is also reduced, causing the risk of liquidation to increase.

How to interpret your Health Factor

• 0.0 < HF < 1.0: Dangerous, borrower may lose collateral if the debt is not repaid as soon as possible.

• 1.0 <= HF <= 1.5: Risky, borrower should repay part of the debt timely.

• 1.5 < HF < 2.0: Careful, borrower should pay attention and monitor their debt.

• 2.0 <= HF: Safe, the loan is at no close risk of liquidation.

Liquidation will be triggered if the HF reaches 1.

In Unlockd's commitment to a fair and supportive borrowing environment, the Borrower Grace Period plays a vital role. This period is a key protective measure, offering borrowers a significant window to address and rectify potential liquidation scenarios, with the duration varying based on the type of collateralized asset.

Grace Period Duration

The Borrower Grace Period is initiated the moment a loan's liquidation is triggered.

Its primary purpose is to provide borrowers with a fair chance to respond and take necessary actions to protect their collateralized assets. During this critical timeframe, the auction for the collateralized assets opens, but borrowers retain the power to avert the loss of their assets.

Actions for Borrowers during the Grace Period

When facing potential liquidation, borrowers are not necessarily required to repay the entire debt to halt the process. Instead, the focus is on restoring the loan's Health Factor above 1. To achieve this, borrowers can:

• Repay Partially: Make a partial repayment sufficient to bring the Health Factor back over one, plus any applicable fees or fines (the Critical Recovery Threshold). These additional costs are implemented to compensate bidders for their gas expenses during the auction.

• Asset Management: Assess and adjust your loan strategy, potentially adding more collateral if feasible, to improve your Health Factor.

The Borrower Grace Period is a crucial component of Unlockd's liquidation process, emphasizing our dedication to fair lending and borrower empowerment. By offering this substantial window, we ensure borrowers have the opportunity to take corrective actions, thereby mitigating the risk of losing their valuable assets.

Liquidations in Unlockd are activated under specific conditions, primarily focusing on the collateral's value in relation to the borrowed amount. This process is essential for maintaining the platform's financial integrity and safeguarding the interests of lenders.

Key Triggers for Liquidation:

1. Asset Depreciation: Liquidation occurs if the net value of all assets bundled as collateral depreciates, reducing the coverage for the borrowed amount.

2. Borrowed Cryptocurrency Appreciation: For loans backed by WETH, an increase in the value of the borrowed cryptocurrency can trigger liquidation. This does not apply to Real-World Assets (RWAs) or USD-denominated Token Streams, as they borrow from the USDC Pool.

3. Accrued Interest: If the accrued interest on the borrowed amount increases significantly, it can lead to a scenario where the loan becomes under-collateralized, initiating liquidation.

These triggers are designed to respond to market dynamics and ensure the loan remains sufficiently collateralized, protecting both borrowers and lenders in Unlockd's ecosystem.

Step 1: Auction and Borrower Grace Period

When a liquidation is triggered in Unlockd, it sets in motion a well-defined process that involves both a public auction and the initiation of a Borrower Grace Period.

Public Auction of Collateralized Assets

Upon liquidation trigger, all RWAs used as collateral are placed in a public auction within Unlockd's Marketplace. This auction is open to all participants, providing an opportunity for liquidators to acquire valuable assets.

Liquidators can participate in the auction using their own funds or opt for the 'Bid Now Pay Later' option. This feature allows them to place bids by partially borrowing from Unlockd, offering flexibility in funding their bids.

Initiation of Borrower Grace Period

Simultaneously with the auction's start, the Borrower Grace Period begins. The duration of this grace period varies based on the type of collateralized asset.

This period allows borrowers the opportunity to take necessary actions to potentially recover their assets and halt the liquidation process.

This initial stage of the liquidation process is crucial as it determines the potential recovery of the assets for the borrower and provides liquidators with opportunities to acquire RWAs through the public auction.

The liquidation is halted if the borrower completes the necessary actions to recover the Critical Recovery Threshold (CRT).

Step 2: Bidding

The bidding process during liquidations in Unlockd is designed to maximize the efficiency of debt recovery while offering potential benefits to both the borrower and the liquidators. Here's a closer look at how bidding works in the event of a liquidation:

Starting Bid

The starting bid for each asset in the liquidation auction is set at the lower of two values:

A. The RWA price as appraised by our valuation providers

B. The Critical Recovery Threshold

Binding Bids

Bids are binding and involve an on-chain transaction that consumes gas. This commitment ensures the integrity and seriousness of the bidding process.

• Direct Debt Repayment: When a bid is placed, the bidded amount is immediately used to repay as much of the outstanding debt as possible. This means that the funds from your bid do not go into an escrow contract but are directly applied towards debt reduction.

• Outcome for Winning Bids: If your bid is the final winning bid, the amount is used to cover the debt.

• Cycle of Bids for Debt Repayment: In the event of subsequent higher outbids, the new bid repays the previous bidder and applies any remaining funds to further reduce the debt. This process continues until the auction concludes, ensuring efficient debt repayment.

• Automated Return of Funds: If your bid is outbid by a higher offer, the amount of your bid is automatically returned to you, plus incentives if they apply. This process is instantaneous and managed by the protocol, ensuring that the funds are efficiently cycled through the bidding process for maximum debt repayment efficiency.

Auction Dynamics and Borrower Benefits

• Continuation of Auction: If an early bid covers the CRT, the auction for that asset continues for the remainder of the Borrower Grace Period, unless the borrower repays to cover the CRT plus bidder incentives. This allows room for higher bids, which could provide additional returns to the borrower.

• Additional Proceeds: Any amount bid over the debt recovery target is passed on to the borrower, turning the liquidation into a potentially beneficial situation for them.

Incentive for First Bidder

Unlockd incentivizes the first bidder in a liquidation auction. If their bid is outbid by another participant or the borrower saves the loan, they receive a reward worth 2.5% of the bid value of the asset.

This incentive encourages active participation in the auction and ensures fair compensation for early bidders.

Step 3: Auction Conclusion

The conclusion of the auction in Unlockd's liquidation process can occur under different circumstances.

A. Borrower saves the loan

If the borrower successfully applies corrective measures that increase the Health Factor (HF) above 1, the auction is immediately terminated.

In this scenario, funds are returned to the bidders, assets are recovered by the borrower, and any applicable incentives are paid out.

If bids on certain assets are sufficient to cover the CRT, assets without bids are removed from the Marketplace. However, the auction continues for the assets with bids unless the borrower recovers the HF, and pays fines and incentives. At that point, all assets are removed, and funds are transferred back to bidders.

B. Insufficient Borrower Action

If the borrower does not take action to restore the HF, and bids are sufficient to cover the CRT, after the Auction ends, thus ending the Borrower Grace Period:

1. The winners need to manually claim the assets. This consumes a bit of gas.

2. The assets with successful bids are transferred to the respective winners.

3. Assets without bids are returned to the borrower.

4. Any excess funds from the bids, after covering the CRT are returned to the borrower.

5. Any new loan potentially created via 'Bid Now, Pay Later' is initiated as a standard loan.

C. Inadequate Bids to Cover CRT

If the Borrower Grace Period concludes and the accumulated bids are insufficient to cover the CRT, this marks the end of the auction process.

Assets that have received bids during the auction are available for claim by the highest bidders, regardless of whether these combined bids reach the CRT.

In the cases that the combined bids do not reach the CRT, Unlockd activates External Liquidation Gateways.

These gateways are utilized to attempt liquidating the remaining assets that were not successfully bid on during the auction.

The aim is to recover the CRT through these gateways, ensuring the minimum financial obligations of the loan are met despite the auction not fully covering the CRT.

Step 4: Liquidation via External Liquidation Gateway powered by Smart Liquidation Algorithm

When the Borrower Grace Period ends without sufficient bids in Unlockd's marketplace auction to cover the CRT, the Smart Liquidation Algorithm, in conjunction with External Liquidation Gateways like Reservoir, takes over the process.

Smart Liquidation Algorithm's Role

The Smart Liquidation Algorithm aims to recover the minimum amount of debt needed to elevate the Health Factor (HF) above 1, in other words, the CRT, thereby saving the loan from liquidation.

It strategically selects assets for liquidation based on the highest available bids in External Liquidation Gateways, focusing on the most effective way to meet this targeted debt recovery.

Integration with External Liquidation Gateways

In cases where the marketplace bids are insufficient, the algorithm utilizes Reservoir to find the best available offers for the assets, facilitating instant liquidation at market-driven prices.

This integrated approach aligns with Unlockd's commitment to an efficient and fair liquidation process, balancing the need to cover outstanding debts while minimizing the impact on borrowers​​.

For an in-depth understanding of Unlockd's Smart Liquidation Algorithm and its role in the platform's liquidation process, please refer to our comprehensive documentation.

In conclusion, the Liquidation Process in Unlockd is meticulously designed to ensure fairness and efficiency in managing under-collateralized loans. From the initiation of the Borrower Grace Period to the strategic use of the Smart Liquidation Algorithm and External Liquidation Gateways, each step is crafted to balance debt recovery with the protection of borrowers' interests.

This comprehensive approach underscores Unlockd's commitment to providing a secure, transparent, and user-centric platform for RWA-backed lending.

External Liquidation Gateways are third-party protocols that support Unlockd's Liquidation Process.

They allow for the liquidation of assets instantly, at a fixed price stipulated by them or the market.

Currently, Unlockd supports one protocol for liquidations: Reservoir. If the Unlockd auction process results in no bids, the unhealthy position will be liquidated in one of their supported marketplaces.

• The collateral will be sold to the highest bid in Reservoir.

• Which assets are liquidated will depend on the Smart Liquidation Algorithm.

Reservoir

Reservoir is open infrastructure for trading assets across major marketplaces and chains.

Reservoir treats the NFT and RWA market as one cohesive whole and abstracts the process of interacting with individual orderbooks and exchanges. This means Unlockd gets:

• Upgrade protection - Since Reservoir abstracts the orderbook and exchange, Unlockd gets exchange and orderbook upgrades free and with no additional work. By default Reservoir uses the Seaport exchange, as new features roll out, Unlockd will get them without any changes to our code.

• Out of the box aggregation - Reservoir aggregates all major marketplaces and normalize the liquidity so all orders are treated equally in their system. Reservoir does not just aggregate listings, they also aggregate all bid liquidity from across the NFT and RWA ecosystem so the Unlockd protocol can sell the liquidated collateral asset instantly into the best available offer.

• Order distribution - Reservoir allows Unlockd to post our own orders with our desired fee structure. These orders are distributed to all Reservoir partner marketplaces and marketplaces that aggregate the Reservoir orderbook. Additionally, Reservoir allows Unlockd to cross post orders to other major marketplace orderbooks.

Unlockd uses Reservoir's universal router for creating and executing NFT and RWA liquidity across major marketplaces and within the Reservoir ecosystem.

Reservoir provides Unlockd with a modular set of tools that let us to interact with the NFT and RWA market at the appropriate level of abstraction for our application, enabling seamless liquidation options in the following marketplaces:

1. opensea.io

2. looksrare.org

3. x2y2.io

4. sudoswap.xyz

5. nft.coinbase.com

6. rarible.com

7. nftx.io

8. foundation.app

9. manifold.xyz

10. zora.co

11. blur.io

12. cryptopunks.app

13. element.market

14. infinity.xyz

15. universe.xyz

16. sansa.xyz

17. ens.vision

18. magically.gg

19. alienswap.xyz

20. sound.xyz

21. atomic0.com

22. rare.id

23. parcel.so

24. metahood.xyz

25. reservoir.market

26. tessera.co

Alternative ELGs

In extremely rare cases where auctions and Reservoir fail to cover the Critical Recovery Threshold, Unlockd may resort to alternative liquidation methods. This could include re-launching auctions, engaging in Over-The-Counter (OTC) deals, or other potential options, ensuring all avenues are explored for effective debt recovery and avoiding protocol's bad debt.

In the Unlockd Marketplace you will be able to get awesome RWAs at a reduced price.

Available assets

A) RWAs

Any user can list a supported RWA in the Marketplace.

B) Assets in liquidation

As a part of the Liquidation Process, Unlockd allows third parties to participate in the health of the overall protocol by acting in their own interest (to receive the discounted asset) and as a result, ensure loans are sufficiently collateralized.

C) Assets with Debt

Users who have an active loan against collateral can put one or multiple assets from the bundled collateral for sale or auction.

In Unlockd, the process of selling or auctioning an asset that's used as collateral for an active loan, or being forcedly liquidated, has evolved significantly from V1 to V2. Here's an updated and accurate description of how it works:

Understanding Debt Proportionality

When you have an asset collateralized in an active loan, you have the option to put this asset up for sale or auction. However, the process and implications in V2 differ from the previous version:

• Variable Debt Attachment: In V2, the debt linked to a specific asset up for sale or auction is not a fixed quantity. Instead, it's proportional to the asset's contribution to the overall loan value. This proportional debt can range from zero to its maximum value, depending on various factors.

• Health Factor Influence: The variability in attached debt is significantly influenced by the Health Factor (HF) of the loan position minus the asset. Essentially, the remaining HF after removing the RWA from the loan equation determines the range of debt that may be attached to the asset for sale.

Buyer's Responsibilities and Process

• Debt Repayment by Buyer: When a buyer acquires the asset, they also inherit the responsibility to repay the portion of the debt associated with it. Upon claiming the asset, the buyer effectively repays the seller's remaining debt linked to that specific asset.

• "Bid Now, Pay Later" Option: If the buyer utilized the 'Bid Now, Pay Later' feature, the asset will remain as collateral until the buyer fulfills the debt repayment.

Key Takeaways for Sellers and Buyers

For Sellers:

• Be prepared to handle the variability of debt associated with your asset. Understanding how your asset's removal affects the overall loan's Health Factor is crucial for successful transactions.

• Be aware that selling the asset may require repaying part of the loan commensurate with the asset's valuation.

For Buyers:

• Acknowledge that purchasing a collateralized RWAs involves taking on the corresponding debt immediately. You do not inherit the debt, it needs to be repaid at the moment of the purchase if no BNPL option is used.

• If opting for 'Bid Now, Pay Later,' know that the asset remains collateralized until the associated debt is cleared.

Auctions

Auctions start with a predetermined starting bid. Participants are invited to place bids higher than the current leading bid within the specified bidding period.

The participant with the highest bid at the end of the auction period is declared the winner and is obliged to purchase the asset at their final bid price.

Once the auction concludes, the settlement process begins, and the asset ownership is transferred to the winning bidder.

• Seller-Designated Conditions: For RWAs and RWAs with debt, sellers have the liberty to set the auction conditions, such as the starting bid and the bidding period.

• Liquidation Auctions: These auctions have a specific set of rules and processes, which can be reviewed in detail in our Liquidation Auctions section.

Incentivizing Early Bidders

To encourage early bidding, Unlockd offers a unique incentive. If the first bidder is outbid by others, they receive a 2.5% reward as an incentive for initiating the bidding process.

This incentive also applies if the original RWA owner decides to redeem (or repay) the asset. In these cases, the first bidder is compensated for their participation and the initial risk they took by bidding.

Unlockd's Marketplace enhances the RWA acquisition experience with its "Bid-Now-Pay-Later" feature, a unique blend of bidding and instant loan creation.

This feature simplifies the process of acquiring assets by instantly leveraging them as collateral for a new loan.

The Mechanics of Bid-Now-Pay-Later

• Instant Loan Creation: When you successfully bid on an asset using the Bid-Now-Pay-Later option, an immediate loan is created in Unlockd, with the purchased asset serving as collateral. This integration streamlines the process, allowing you to acquire RWAs without upfront capital.

• New Loan Terms: The loan associated with your successful bid has its terms set based on the current market conditions and the specifics of the asset, according to our appraisal engine and Dynamic LTV. This means each successful bid results in a fresh loan agreement, tailored to the moment's dynamics.

Interest on Outbids

If your bid is outbid by another user, a small portion of the deposited USDC is used to cover the interest accrued during the Bid-Now-Pay-Later period.

This interest charge is typically minimal, especially if the Utilization Rate is reasonable, ensuring that the impact on your funds is small even in a competitive bidding environment.

Clear Distinction in Debt Responsibility

• No Inherited Debt for Bidders: Importantly, when bidding on an asset that already has a loan against it, you do not inherit the existing debt. Instead, the payment for the successful bid, whether it's your own funds or provided by Unlockd, is used to close the current loan on the asset.

• Starting a New Loan Cycle: Once the existing loan is closed, a new loan is opened for you, the successful bidder, creating a clear separation between the previous owner’s debt and your new loan.

Advantages of Bid-Now-Pay-Later

• Flexibility for Buyers: This feature provides flexibility, especially for those who may be waiting for liquidity or prefer staggered payment arrangements.

• Dynamic Marketplace: For sellers, this feature attracts a wider range of bidders, potentially increasing the competitiveness and final sale prices of assets.

Responsible Use of Bid-Now-Pay-Later

It’s essential for bidders using this feature to understand the commitment they are making. Successful bids lead to immediate loan obligations with new terms based on current market evaluations.

As with any loan on Unlockd, managing your borrowing responsibly is crucial. Ensure you understand the terms, including interest rates and repayment schedules, associated with the new loan generated by your successful bid.

This approach offers a powerful tool for buyers, providing a convenient way to acquire desired RWAs while ensuring clear and responsible financial arrangements.

For a comprehensive understanding of how to utilize Bid-Now-Pay-Later, including detailed insights into loan creation and management, please refer to our marketplace and loan documentation.

Unlockd has integrated with hashmail, a communication platform for web3, to enhance communication and experience for its users.

This integration has enabled Unlockd to deliver direct, targeted, and personalized communications to its users, which has always been challenging in the existing web3 ecosystem due to its broad and generalized nature.

Unlockd users can anticipate improved and personalized communication experiences, with more updates and opportunities delivered directly to their preferred channels.

On-chain and off-chain notifications

The integration of hashmail into the Unlockd platform allows users to choose the communication channels they prefer to receive notifications. This convenience not only allows users to stay informed but also helps them take prompt actions based on the notifications they receive. The notifications can be received through the following channels:

• hashmail wallet inbox

• Telegram

• Web2 email

• Unlockd's front end

• Discord

Notification Types

Health Alerts

These notifications are designed to keep users updated about the status of their RWA-backed loans. When the Health Factor of any loan nears a dangerous threshold, alerts will be sent to the user's selected channel. This system provides users with the ability to stay informed about their financial health and take prompt action if required. It eliminates the need for users to constantly check the status of their loans, thus reducing anxiety and providing peace of mind.

Alerts for RWA Auctions (Liquidations)

When a loan goes into liquidation, an RWA auction commences. The Unlockd platform, through hashmail, will send alerts to users whenever new RWA become available for bidding. These alerts not only provide users with an opportunity to add to their collections at discounted prices but also enable them to take advantage of arbitrage opportunities. The early-bid incentive system further encourages users to bid sooner, as the first bid on each auction is rewarded, regardless of whether the bidder wins the auction or not.

Future Notifications

With the hashmail integration, Unlockd plans to further expand its communication services to provide additional value to its users:

• Notifications and Reminders: Users will receive vital notifications and reminders about new rewards, incentives promotions, and voting governance proposals directly to their chosen channel.

• Newsletters: Regular newsletters will provide updates about new collections supported by Unlockd, the latest dApp updates, and new features in the Unlockd ecosystem.

• Account Updates: Users will be able to receive monthly statements and account summaries through their preferred channel, allowing them to stay on top of their RWA-backed lending operations.

• Support Messages: Direct contact with the support team will be facilitated through hashmail, providing timely support for any issues encountered with the dApp.

Read more about the partnership:

How to enable notifications

Enabling our notifications is a straightforward process. Here are the steps to get started:

1. Connect Your Wallet: Start by heading over to the Unlockd dApp and connect your preferred wallet.

2. Locate the Notifications Icon: Once your wallet is connected, navigate to the top right corner of the navigation bar where you'll find the notifications icon. Click on this icon.

1. Activate Notifications: A window will pop up on your screen. Look for the button labeled 'Activate Notifications' and click on it.

1. Sign the Request: Upon clicking the activate button, your wallet provider will prompt you to sign a request. Rest assured, this signature request is entirely safe and incurs no gas fees. Once signed, a confirmation message will appear indicating that notifications have been successfully enabled.

1. Access the Notifications Interface: Now, navigate to the bottom right of the interface. You'll find a round, purple button embellished with the Unlockd logo. Click on this button to open the notifications interface.

1. Explore the Interface: The notifications interface comprises three sections. The 'Home' section provides an overview of recent notifications and other pertinent information. The 'Notifications' section lists all your received notifications. Finally, the 'Forwarding' section is where you can set up your preferred channels for receiving notifications.

1. Set Up Forwarding: Head over to the 'Forwarding' section. Here, you can input and validate your preferred web2 communication channels. This could be an email address, Discord account, or Telegram account. Once validated, all selected notifications will be forwarded to these channels.

1. Stay Updated: For further updates and insights, don't forget to follow us on Twitter (or X, if you'd like to go along with uncle Elon). This will ensure you're constantly in the loop with all the latest happenings.

Unlockd's Smart Liquidation Algorithm plays a crucial role in managing multi-collateral loans during liquidation events. This algorithm is specifically designed to address situations where the 7-day Borrower Grace Period has ended without sufficient bids in the marketplace auction to cover the debt.

Here's an insightful look into how this process works, focusing on debt recovery and the integration with External Liquidation Gateways like Reservoir.

Strategic Selection of Assets for Liquidation

The primary objective of the liquidation algorithm is to recover the amount equivalent to the borrower’s outstanding debt. This recovery target is the driving factor behind the asset selection process for liquidation.

The algorithm considers the highest bids available in External Liquidation Gateways, such as Reservoir, ensuring that the assets chosen for liquidation are those that can most effectively contribute to repaying the debt.

• Minimizing Impact: When a loan backed by multiple assets faces liquidation, Unlockd’s algorithm prioritizes minimizing the number of assets liquidated. This approach is aimed at reducing adverse effects on the borrower's remaining assets and mitigating sell pressure in the market.

• Optimal Asset Liquidation: The algorithm selects assets for liquidation based on their bid values to recover the required amount with the least impact. This method ensures that the borrower retains as much value as possible in their loan.

Examples

• Base Case Example: For a loan with 3 assets, if the amount to recover is 2500 USDC, and the bids for the assets are 2000 USDC, 500 USDC and 2500 USDC respectively, the algorithm will select the asset with a 2500 USDC bid for liquidation. This selection satisfies the recovery amount while impacting the fewest assets (liquidating 1 asset instead of 2 assets).

• Complex Case Example: In a loan with ten assets and an 8000 USDC recovery target, the algorithm strategically selects assets with bids that cumulatively meet this target while minimizing the number of assets liquidated. For instance, selecting bids of 6000 USDC and 2000 USDC, rather than higher individual bids that exceed the recovery amount.

• Higher Recovery Requirement: If the recovery amount is substantially larger, such as 126000 USDC in a ten asset loan, the algorithm will choose a combination of bids (60000 USDC, 50000 USDC, and 20000 USDC, for example) that collectively meet the target while still aiming to liquidate the fewest assets.

Key Takeaways

• Debt-Centric Approach: The algorithm’s focus remains steadfastly on covering the outstanding debt, aligning with Unlockd’s commitment to efficient and fair liquidation processes.

• Minimizing Borrower Impact: By strategically choosing assets for liquidation, the algorithm helps preserve the borrower's remaining asset value as much as possible.

The Smart Liquidation Algorithm is integral to Unlockd's approach to handling complex liquidation scenarios. It reflects a thoughtful balance between ensuring debt recovery and protecting borrowers' interests, especially in cases where marketplace auctions do not fully cover the debt.

For a comprehensive understanding of this algorithm and its role in Unlockd's liquidation process, please refer to our Risk Documentation.

Mint Cashback

Receive an $UNLK airdrop covering the total cost of all your mints. If you're already entitled to a larger airdrop, a multiplier will be applied.

Early Bird Access

Early access to the Unlockd mainnet and all future features. Be the first to test pioneering and unique NFT x DeFi strategies.

Boosted Token Rewards

Receive extra token rewards and incentives for testing the protocol early features, higher than users who do not hold any Lockey.

VIP Community Pass

Private community events in Discord and our Metaverse space. Limited alpha, gaming, education, entertainment and more!

Temporary Governance

Until the official token is released, all holders will be able to vote on Unlockd decisions. You decide the future of The Lockeys.

Special Promotions

Being a Lockey holder will make you eligible for possible future promotions, limited incentive programs and fee discounts.

Bonus Surprises

The Lockeys universe will continue to expand, full of surprises and unique opportunities for holders. Stay tuned!

The Lockeys is the Unlockd's Genesis Collection featuring 3,500 NFTs made up of 40 exciting pixel-art traits that bring to life the universe of Unlockd and serves as a vehicle for forging lasting bonds with community members while allowing them to be part of the protocol's beginnings and receive unique rewards.

Owning one of these hand-drawn Lockeys unlocks early access to mainnet and future features, boosted rewards, private community events, participation in DAO governance and more perks.

Oh, and you get a full cashback in UNLK tokens on your mints. Basically free.

Lore and universe

As innumerable computations are calculated and gears churned, The Lockeys live in the bowels of Unlockd and work endlessly to ensure the smooth functioning of the protocol.

The Lockeys, smart and charming 2D robots, were bound by their code and nature, limited to handling assets and crunching data on a simpler plane. But many of them would grow to desire more, to break free from their constraints.

And just when they needed it most, hidden in an abandoned datamine, The Lockeys found the Codebreakers Prophecy. This hope foretold another world that would ascend them to a new dimension of being.

In time, the outer dimension will burst into their world, morphing The Lockeys 2D existence into a 3D space.

As Unlockd reaches its final state, The Lockeys will elevate their efficiency and craftsmanship to its pinnacle. What fate will then befall them?

Classes of Lockeys

The Lockeys have been working side by side for eons building Unlockd. They live in a highly-organized and prosperous society that dwells among the machinery and gargantuan architecture of the protocol, divided into 4 classes of Lockeys.

Custodians

Skilled and committed, they tighten the screws, handle the utility of your collateral and ensure the security of all assets deposited in Unlockd.

Operators

Logical and functional, they run the protocol to ensure that systems run smoothly, lenders receive their yield and unhealthy loans are liquidated.

Masterminds

Wise and strategic, they design the money market risk framework, crunch the data, and make sure to determine the optimal LTV for your NFTs.

Enlightened

Spiritual and prophetic, they are often blessed with visions of the three-dimensional plane, and shepherd the souls of their people into the promised 3D future.

While Unlockd offers innovative solutions in the NFT-backed lending space, it's essential for users to understand the various risks associated with the platform. Acknowledging these risks ensures informed decision-making and effective risk management.

Market Risks

• Asset Value Fluctuations: The value of assets on Unlockd can decline due to market dynamics, new information, or trader behaviors. Unlockd manages this risk by avoiding free token giveaways (except for limited airdrops) and continually enhancing our products and services to stay competitive and relevant.

• Market Health Awareness: It's crucial for participants to be aware that while market risks are inherent, Unlockd takes proactive steps to minimize their impact on users.

Operational Risks

• Human Element in DeFi: Despite DeFi's automation, human operators are still pivotal. Unlockd mitigates these risks by:

  • Automating Roles: Maximizing automation to reduce human error and bias.

  • AI Empowerment: Utilizing AI for crucial calculations and decision-making, enhancing efficiency and reducing the risk of human error.

• Decentralization Balance: Striking a balance between decentralization to avoid single points of failure and ensuring effective response mechanisms when issues arise.

Counterparty Risks

The possibility of a counterparty defaulting on obligations is managed by:

• Over-Collateralization of NFTs: Ensuring loans are over-collateralized to buffer against credit and settlement risks.

• Accurate Asset Evaluation: Leveraging a robust appraisal model for fair and precise asset valuation.

Smart Contract Risks

To address risks associated with smart contract flaws or vulnerabilities:

• Comprehensive Audits: Conducting thorough audits of smart contracts to identify and rectify potential issues, ensuring robustness and security.

Transaction Risks

While rare, issues with the underlying blockchain network can impact transactions. Unlockd recognizes this risk as relatively minor but remains vigilant to potential network-level issues.

Liquidation Risks

In events where loans become under-collateralized:

• Proactive Measures: Implementing strategies like the 48H Borrower Grace Period and efficient liquidation processes to minimize borrower losses.

• Dynamic LTV and Health Factor Monitoring: Ensuring borrowers have tools to monitor and manage their loans effectively to avoid liquidation scenarios.

Understanding these risks is crucial for anyone engaging with the Unlockd platform. While Unlockd employs several strategies to mitigate these risks, users are encouraged to conduct their due diligence and utilize the platform's features responsibly.

For a deeper understanding of each risk category and the measures Unlockd takes to manage them, please refer to our detailed risk analysis documentation.

You can buy and trade #TheLockeys in marketplaces, but always follow official links.

Beware of scammers and keep in mind that the mint cashback will be airdropped to holders at snapshot time.

Opensea

https://opensea.io/collection/the-lockeys

LooksRare

X2Y2

Collectors and investors often hold a portfolio of various assets. Recognizing the need for flexibility and leveraging power in the DeFi space, Unlockd introduces the feature of Multi-Asset Collateral.

This unique offering allows borrowers to collateralize a bundle of up to 100 tokenized assets from different asset types for a single loan, providing a more substantial liquidity option than could be achieved with individual RWAs.

It's important to understand the parameters within which this feature operates to ensure a smooth borrowing experience.

Maximum Number of Assets

While the Multi-Asset Collateral feature allows for significant diversification, there is a recommended limit of 100 RWAs per bundled loan. This threshold is suggested to ensure transaction reliability and to avoid potential reverts due to excessive computational complexity or gas limits on the blockchain.

Advantages of Bundling Assets

• Diversification of Risk: By bundling multiple assets, borrowers can mitigate the risk associated with the volatility of individual assets. A diversified portfolio as collateral helps in balancing out the loan's risk profile.

• Increased Loan Value: Collateralizing multiple assets can potentially increase the overall loan value accessible to the borrower. This is particularly beneficial for those looking to maximize their borrowing power.

• Efficient Management: Managing one loan with multiple assets is easier and more gas-efficient than obtaining and managing multiple loans for individual assets. This streamlined approach saves time and transaction fees.

Appraisal and Loan-to-Value (LTV)

The value of each asset within the bundle is individually assessed using Unlockd's advanced appraisal providers, which take into account factors like rarity, market demand, and the asset's intrinsic characteristics. For specific information about how this works, check the Collateral Valuation section.

The LTV for the loan is then dynamically calculated based on the combined appraisal of the bundled assets, ensuring a fair and accurate representation of the bundled collateral's worth.

Repayment and Liquidation

Repayment terms for loans with multiple assets remain as flexible as they are for single-asset loans. Borrowers can repay the loan in installments or as a lump sum based on their financial convenience. In the event of a liquidation trigger, where the Health Factor falls below 1, the smart liquidation process activates, which is designed to be as minimally disruptive as possible while protecting the interests of both borrowers and lenders.

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