While the DeFi market is approaching $100 billion, several key players in the non-fungible space such as the number one NFT company in the world, Animoca Brands, is betting on Vera’s NFT DeFi protocol as the missing catalyst required to take the DeFi market to a trillion dollars and provide immediate social financing to billions of people in need around the world.
So how exactly is Vera accomplishing this? Let’s look at a few examples…
Social Financing for Developing Countries
Social financing is the act of giving loans to people in need with the goal of achieving social outcomes at scale such as the alleviation of poverty.
Alice is a gamer from Vietnam and due to the pandemic, her small business at the tourist areas has suffered. To make ends meet, she wants to generate income by playing Axie Infinity, a play-to-earn game, but she cannot afford to spend $1,000 to buy the three Axie NFTs required to start playing the game and making money.
Enter Vera. A marketplace selling Axie NFTs powered by Vera allows Alice to purchase $1,000 in Axie NFTs by paying only $100 today. The remaining $900 can be paid any time within the next six months.
After investing $100, Alice is thrilled to be able to immediately able to play the game and start generating income. In fact, she is so good at the game that she calculates she can earn enough in-game income to pay off her $900 within 60 days. With the average salary in her country being $150 per month, this is a life-impacting opportunity that she would not have been able to take advantage of if it were not for Vera.
Metaverse Mortgages for Investors
Billy is a millennial living in the European Union whose city is locked down due to COVID-19 pandemic. Fortunately, he has a job working for a technology firm that allows him to work remotely from home.
However, Billy has dreams to experience a lot more than living paycheck to paycheck and is frustrated that the pandemic has prevented him from exploring the world, meeting new people, and discovering new opportunities.
While surfing the web, Billy discovers a VR metaverse game called Netvrk that allows him to purchase virtual land, build and create things on it, and generate revenue from Virtual Land Sales if he decides to sell his real estate.
Thanks to Netvrk’s partnership with Vera, Billy also learned that Netvrk has launched a new feature where real estate can also be rented to others to generate passive income, just like in the real world. After checking the marketplace for what rental prices are for virtual land, Billy’s entrepreneurial lightbulb immediately lights up.
Billy identifies some of the best real estate locations in the metaverse and uses Vera’s Metaverse Mortgage to help him purchase some prime real estate with a limited budget. He then proceeds to build a digital billboard on one of his plots that has high player traffic and creates unique buildings on the other plots that have special mineral resources to increase their value.
Afterward, he rents out the ad space to an advertiser, and on the other plots, he also rents them out to other players that are eager to benefit from the mineral resources.
Due to Billy’s wise planning, the cash flow generated from his real estate rentals exceeded his monthly mortgage payments, and after a few months, he was able to fully pay off the loan. Thanks to Vera, Billy has generated enough income to relocate to his favorite coastal town along the Mediterranean coast and enjoy a significant improvement in his quality of life.
How Vera Metaverse Mortgages Work
Games that integrate Vera allow virtual real estate collectors that do not want to sell their cryptocurrencies or cannot afford the purchase to receive financing to buy their desired virtual real estate NFTs. Metaverse Mortgage is powered by Vera Finance, one of Vera’s core products that allow consumers to buy NFTs with alternative financing payment options. Note that Vera supports financing for any NFT, not just those in the metaverse.
Imagine an NFT for sale is listing for $10,000. Here are a few ways this NFT may be acquired using Vera’s Metaverse Mortgage:
Uncollateralized Seller Financing
Just like how you would buy a house today, you first make a down payment of say $1,000 to the seller. The remaining $9,000 plus optional interest must be paid back to the seller by a deadline as a single payment or in multiple installments.
What happens if the buyer defaults? In the case of default, the buyer loses all previous payments and the NFT is returned back to the seller via Vera’s smart contract-enabled Seller Protection feature.
How does Vera generate revenue? Vera charges the NFT seller a one-time service fee that’s taken from the buyer’s initial down payment.
Does Vera or the Seller take on any risk? No. In the case of default, the NFT is returned back to the seller via Vera’s smart contracts.
Collateralized Network Financing
At the time of purchase, Vera fronts $10,000 to the seller, and the buyer stakes $15,000 in ETH to be used as collateral on Vera. After the buyer pays off the $10,000 debt plus optional interest, she will get their collateralized ETH back in full.
How does Vera generate revenue? Vera lends out the collateral to others and keeps the earned interest. If the buyer defaults, Vera takes possession of the collateral and the foreclosed NFT which then be resold or auctioned for additional revenue.
What happens if the buyer defaults? In the case of default, the buyer loses both their staked collateral and the NFT to Vera.
Does Vera or the Network Lender take on any risk? No. The collateral covers Vera’s payment to the seller even if the buyer defaults.
Uncollateralized Network Financing
At the time of purchase, Vera acts as a bank and fronts $10,000 to the seller. The buyer makes the first payment of $1,000 to Vera and the remaining $9,000 plus optional interest must be paid by a deadline as a single payment or as installments.
What happens if the buyer defaults? In the case of default, the buyer loses their NFT to Vera. This is essentially like a real-estate foreclosure. Vera has the right to sell or auction off this NFT to pay back the loan.
How does Vera generate revenue? Vera earns revenue from the interest paid on these loans.
Does Vera or the Network Lender take on any risk? In the case of default, the NFT is returned to Vera and the network will need to sell or rent out the NFT in order to recoup liquidity from the loan.
About Vera
Vera is the most powerful open financial platform for non-fungible token (NFT) assets. Vera offers decentralized financing, leasing, lending, and other essential financial services for any NFT marketplace, game, or application. Founded in 2021 and backed by notable investors in the decentralized fintech space such as Animoca Brands (leader in blockchain gaming and NFTs; key investor in Axie Infinity, Open Sea, Dapper Labs, CryptoKitties, and much more) and the Web3 Foundation, Vera’s mission is simple: To build open, secure, and powerful NFT financial products that are equally available to everyone everywhere.
Original Article :
Author: Vera
Contact: https://vera.financial/
