Raffles and Handling foreclosures.
Raffles for Foreclosed Loans: Maximizing Value for Holders
When it comes to handling foreclosed loans and their associated NFTs, our primary goal is to maximize value for our holders. We understand that sometimes circumstances lead to losses, while other times gains may be realized. In either case, we have devised a strategic approach to ensure fairness and profitability for all parties involved.
Loss Incurred from a Foreclosed Loan:
If we find ourselves in a situation where a foreclosed loan results in a loss, we carefully evaluate the NFT in question. Our first course of action is to assess the NFT's secondary volume and recent sales activity. If we determine that the NFT has high secondary volume or has been selling well recently, we may opt to sell it quickly on an exchange. By doing so, we aim to make a net profit or, at the very least, break even.
Low Secondary Volume/Recent Sells:
In cases where the foreclosed NFT has low secondary volume or has not been selling actively, selling it directly to an Automated Market Maker (AMM) might be a viable option. By leveraging the services of an AMM, we can reach a wider audience of potential buyers and increase the chances of selling the NFT at a favorable price.
Raffling the NFT to Holders:
If the foreclosed NFT has low secondary volume and selling it on an AMM is not a feasible solution, we may consider raffling the NFT to our loyal holders. Raffling allows us to offer the NFT at a discounted price, ensuring that our community members have the opportunity to acquire it at a reduced rate compared to the market floor.
Gains Incurred from a Foreclosed Loan:
In cases where a foreclosed loan results in a gain, our priority is to provide value to our holders while ensuring overall profitability for the project. We achieve this by raffling the NFT to our holders at a discounted price. This ensures that, even though the project earns a net profit, the community members who purchase the NFT through the raffle obtain it at a lower price compared to the market floor.
Lack of Interest in the Foreclosed NFT:
In the event that a foreclosed NFT fails to generate sufficient interest within 12 hours of the announced raffle, we will proceed to sell the NFT using an AMM. This approach allows us to optimize the value of the NFT by tapping into the broader market, thereby increasing the chances of a successful sale.
In some cases it may even be beneficial to borrow against the foreclosed NFTs if the offer amount is greater than the AMM.
Note: Raffles will exclusively be provided to holders, prioritizing their participation in these opportunities. This approach strengthens the bond between the project and its community, ensuring that our loyal holders receive added benefits and exclusive access to discounted NFTs.
By adhering to this comprehensive strategy, we aim to navigate foreclosed loans and their associated NFTs in a manner that is fair, profitable, and advantageous to our valued holders.
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