Lending Pools

Yield from Lending Pools is exponentially distributed to the earliest liquidity providers, incentivising lenders to provide the first liquidity to new tokens.

Fund Managers wishing to trade with leverage can do so by borrowing from Lending Pools (Margin Trading).

The tokens in Lending Pools are owned by Lenders who have staked their tokens (any and all crypto) in order to earn yield. Fund Managers can then borrow from these pools in order to open 'short' positions. If they believe ETH is going to go down in price, they can borrow ETH (using stablecoin as a collateral), and then swap that ETH for a stablecoin. Then when the price drops, they they buy back the ETH at the cheaper price, pay back the ETH loan, and they then their profit is realised with the excess ETH.

Using NFSTs as Collateral

Borrowers could use revenue generating NFSTs as collateral, not just for their present value, but due to their historic income generation—similar to how a lender may want proof of your income as part of their qualification process. Lenders could choose to allocate some of their funds to Higher Risk Lending Pools that accept income generating NFSTs as collateral. This obviously doesn't guarantee the loan in the same way staked collateral that is greater than the value of the loan, and so the greater risk to the lender means they can charge an appropriately higher interest rate. This means borrowers with no 'crypto cash' to put down as collateral can use their well performing, revenue generating NFSTs to take out loans.

NFST Leasing

Borrowers can effectively lease their NFSTs in exchange for cash. When this deal is made, rather than lenders accepting NFSTs as collateral for a loan, they effectively pay to temporarily receive the income from those NFSTs. This means NFST owners can get short term cash without having to sell their NFSTs, or borrow money that they have to pay back. NFSTs can be fractionalised so that NFST owners can easily get short term cash in return for giving up a temporary percentage of the their NFST earnings.