The announcement comes directly after Decentraland’s mainnet launch earlier this week, opening up its blockchain-based virtual world to the public for the first time since its ICO back in 2017.
With Rocket’s virtual mortgages, Decentraland users now have a mechanism for purchasing land in a simple, intuitive fashion without having to put up a significant amount of capital to do so.
Introducing Decentraland Virtual Mortgage
— Rocket (@RocketNFT) February 20, 2020
Each of Decentraland’s LAND tokens represents a parcel of virtual land, which users can trade freely on the marketplace. LAND tokens have quickly become one of the most traded Ethereum NFT’s on the market today, where users are currently trading around 2,000 ETH of LAND per week.
It’s important to note that users who are looking to purchase LAND tokens via a Rocket loan will not have custody of the asset until the repayment of the loan has been completed. Instead, the asset is custodied in the RocketNFT.eth address. In the event the loan is no repaid, the LAND is auctioned on a secondary marketplace like OpenSea.
By leveraging a DAO, Rocket’s lending pool is fully transparent, meaning anyone can view its holdings and decisions. Custody of the NFT is still done manually, however there are plans to transition towards DAO-based custody in early-to-mid 2020.
Upon completing the loan application, qualified users will receive a borrower APR depending on the loan duration and the amount borrowed. Estimated APR is currently ranging from 10-20% annually.
Prospective borrowers are allowed to acquire up to $10,000 in LAND with up to a 6-month loan duration.
On the other side of the market, NFT holders looking to earn passive income on their unique assets are able to pool liquidity through the DAO, vote for which loans to fund, and share the collective profits made from interest payments.
RocketNFT has been progressing rapidly, dominating the NFT lending space.
While stablecoins and other crypto-assets comprise for the majority of all loans, the ability to lend and borrow NFTs is a novel use case in and of itself. Moreover, the fact that lending your NFTs is available to anyone provides a new paradigm in the lending market.
For anyone looking to take out a virtual mortgage on LAND tokens can begin by filling out this application here.
LAND token holders looking to earn yields on their NFTs can do so by joining the RocketDAO Telegram and begin discussions here.