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The ecosystem revolves around $NIFTY - a utility token which introduces an incentive mechanism to allow NFT holders to transact in a peer-to-peer manner for various useful functions, such as fractionalisation of NFTs, or lending and borrowing of NFTs.

The platform utilizes its native token as the platform currency, $NIFTY, to incentivise facilitate users to perform the following transactions:

  • Borrowing (pooled)

  • Borrowing (P2P)

  • Fractionalization of NFTs (for liquidity)

  • Voting on various features and parameters of the platform.


Users will be able to receive loans against their NFTs as collateral. The lending mechanic depends on the history and price predictability of the collateral.

NFTs without history

This will be done on a P2P model, where NFT holders and lenders would agree on a valuation of the NFT and the platform will allow certain LTV for the deal. In the case of a default, the lender receives the NFT which was deposited as a collateral.

NFTs with history

NFTs which have trade history of at least a couple of trades and/or belong to a well established NFT family (e.g. crypto punks, crypto kitties) or artist will be eligible for an automatic fair price valuation by the platform. Those NFTs can tap into instant liquidity from the platform’s NFT lending pool.

Some of the variables which will go into determining the fair value of the NFT are:

  • Previous sale value of the NFT

  • Previous sale value of NFTs in a similar family

  • Relative value of the NFT within it's specific set/family

  • Transaction history of the addresses which have traded with this NFT

Collateral liquidation

In case an NFT collateral needs to be liquidated, this will be done as a three-step process.

  1. The NFT will be auctioned off as a whole with the minimal value being slightly higher than the loan value.

  2. If the above step fails, the NFT will be fractionalized and sold via the exponential bonding curve as described in the fractionalization step above. Since the curve pays royalties, the cost of purchasing all fractions will be significantly higher ( for example 2x) than the original NFT valuation.

  3. In case all of the above fails (partially or fully), the lender will be compensated by a fraction of the NIFTY reinsurance pool.


The NIFTY reinsurance pool will be a voluntary participation pool of $NIFTY tokens. This pool can be used to compensate lenders in case an NFT collateral cannot be sold to fully repay a loan. Participants in this pool will be rewarded with a percentage of all fees collected on the platform in exchange for them securing the loans.

This means that after tokens are deposited, the shares of the pool become a de-facto cashflow generating product and can be evaluated via the standard Discounted Cashflow Analysis, after applying a high enough discount rate to account for risks associated with the compensation for lenders.

Thus the value of the tokens in the reinsurance pool (V) can be determined by the periodic fee collections (CF), the discount rate (r) and the terminal value of the token (TV):


The platform will support fractionalization of NFTs and sale via an exponential bonding curve with backpay of royalties. In a nutshell, after the NFT is fractionalized, it will be sold via a bonding curve. Each subsequent fraction sold this way will cost more than the previous with a percentage of the price difference going to all previous fraction buyers, essentially representing a Royalty payment. An example of one of the possible setups for a bonding curve and the respective formula and pricing are shown below.

The Price (P) on bonding curve above can be defined as a function of the fractions sold (F):


The platform will charge fees for various actions such as:

  • Unstaking

  • A % of the interest on all loans

  • Liquidation of collateral

  • Fractionalization

Platform participation

In order for listing partners to gain access to NiftyPays platform, they would be required to put up a stake of $NIFTY as a security deposit to ensure good behaviour. This would drive added utility to $NIFTY as an access token.

The above setup ensures high rewards for early adopters as the net tokens distributed are higher, and they are distributed amongst fewer users.

NFT renting

The platform will enable users to rent out their NFTs to other users which want to temporarily hold them. The rent will be paid in $NIFTY based on an agreement between the two parties and the platform will take care that the NFTs are returned automatically when the rent time expires.

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