We are excited to share that we led Zharta’s $4.3 M seeding round, an NFT lending platform, together with other VCs like Shilling Capital and Possible Ventures, core Web3 industry players SpaceShipDao and Uniwhales Dao, as well as Clever, Olisipo Way, and other angel investors.
At Greenfield One, we are committed to the growth of the NFT industry. While the NFT space has grown to $19.6B trading volume in 2021 from $85m in the previous, it is still a nascent market that lacks a global large user base and trading liquidity compared to fungible tokens. We believe that loans utilizing NFTs as collateral will play an important role in NFT financialization and ultimately mass adoption of NFTs.
How does it work for borrowers?
Zharta connects borrowers and lenders. Borrowers can leverage their NFTs such as profile picture collectibles (PFPs) by using them as collateral to borrow funds and thus unlock liquidity for an otherwise illiquid asset. In order to do so, the Zharta platform will appraise the user’s NFT, allowing her to draw a loan at a given healthy loan-to-value (LTV) ratio. Borrowing on Zharta is overcollateralized, and the platform will handle liquidations in an automated manner on-chain.
How does it work for lenders?
Unlike other existing lending protocols, Zharta is a peer-to-pool lending platform that does not connect individual borrowers and lenders but draws from liquidity pools on the lending side. Lenders can choose from existing lending pools and choose the amount and time of the deposit flexibly. The great advantage of lenders is that they can bid for defaulted assets within their pools while generating yields depending on the pool’s performance.
Zharta aims at becoming a multichain, non-custodial, real-time platform for loans collateralized by NFTs.
- Peer-to-Pool Lending: We believe that rather than peer-to-peer transactions which require a single borrower and lender to agree on a loan contract, the Zharta lending pool will scale much faster than incumbent solutions since lenders provide capital via liquidity pools.
- AI- and data-driven NFT Appraisals: Furthermore, the team is working on an in-house NFT pricing algorithm that will appraise the value of the NFTs used as collateral using rich on-chain data. As all NFT transaction data, as well as its metadata (traits, etc.), is on-chain, the opportunities to analyze these and draw data-driven conclusions are vast. Currently, the collections that are included and can be collateralized are Doodles, Mutant Ape Yacht Club, Bored Ape Kennel Club, World of Women, VeeFriends, Cool Cats, Hashmasks, and Pudgy Penguins. The team is continually working on adding new collections and content to expand the borrower base. In the future, it will add categories such as Play-and-earn, gaming, metaverse, and crypto art.
- Non-Custodial Solution: Zharta never custodies NFT assets. Instead, collateralized NFTs are held in a smart contract escrow. Hence, assets are always subject to the pre-agreed business rules of the loan.
- Zharta Team: We were convinced that the founders team Nuno Cortesão (CEO), Diogo Pires (CTO), and Pedro Granate (COO) is a great team to execute this vision who have been friends for a long time. Previously, they have worked at world-class companies in blockchain, machine learning and project management roles such as Accenture, NTT Data, Bosch. They have recently attracted talent from leading fintech and consulting firms.
Register for early platform access here and stay tuned for the updates on the project!
Follow Zharta on Twitter and Medium.
Thanks to my colleagues from the deal team Gleb, Markus, and Nic for their contributions to this press release.