FAQ – Lending

What the FAQ?

What is Zharta?

Zharta is a DeFi, Web3 startup with two NFTFI protocols: an NFT-Backed Lending protocol and an NFT Renting protocol.

Zharta’s Lending Offer allows holders to get instant liquidity from their NFTs without selling them and for anyone to earn interest by providing liquidity to our lending pools.

Our Renting Offer enables LOTM players to rent assets, enhancing their gaming experience, while enabling Otherside asset holders to earn renting fees by renting out their idle assets.

What are Zharta's primary advantages for Borrowers?

Our borrower-friendly features are one of the key factors that set our protocol apart:

• No Auto-Liquidations – No need to worry about Floor Prices dropping

• Fixed APR – Once a loan starts, its APR is fixed

• Pro-rata APR – Repay early, pay less

• Trait Boosts - Get more for your rare NFTs

• Delegation – Retain NFT Utility

What are Zharta's primary advantages for lenders?

Providing liquidity to one of our pools allows you to automatically collect your share of interest generated by the loans over time, requiring no further action to continue accruing gains.

Moreover, you'll have the opportunity to acquire any defaulted assets within the pools you've invested in at a discounted rate. Sales are conducted on a first-come, first-served basis.

It's crucial to note that no investment is without risk. Ensure you thoroughly understand our protocol and risk management strategies before deciding to make a deposit.

Which browsers and devices are supported?

Currently, we only support desktop devices. We recommend Google Chrome or Firefox for a better experience.

Does Zharta charge Borrowers a fixed fee?

No. Borrowers will only be charged for the interest, which will be split between Zharta and the lending pool.

Can I borrow/lend directly from my Gnosis Safe and other smart contract wallets?

Yes. Our protocol supports EIP-1271, allowing for signature verification when an account is a smart contract. Zharta's smart contracts support Gnosis Safe multi-sig, but the dApp is not yet supported.

Does Zharta take custody of the NFTs I use as collateral for loans?

No. Zharta doesn't get custody of your assets. NFTs used as collateral are held in a smart contract escrow. This means that the assets are held by the smart contract itself, and are always subject to the pre-agreed business rules of the loan.

What are smart contracts? How do they work?

Smart contracts are programs stored within the blockchain that work as self-executing contracts. Once the two parties agree upon the terms, these are coded into the contract and deployed to the blockchain, thus rendering the transaction irreversible, traceable, and transparent.

If the value of the collateral I used for my loan decreases, could my assets be liquidated?

No. Our loans offer full protection from liquidation during the term of the loan. Your loan will only default if you fail to pay on time.

If I repay early, will I still pay interest for the full, original loan term?

No. Interest is charged pro-rata – it accrues on a per-day basis. After a 7-day minimum, you'll only be charged for the days that elapse until you repay the loan.

Can I use more than one NFT as collateral for the same loan?

Yes, you can bundle several assets into a single loan.

My asset is committed to an APE Staking position. Will using it to get a loan affect my earnings?

No. Our Smart Contract escrow is APE Staking compatible — your asset will continue earning APE normally. You will, however, have to wait until you repay the loan to claim your earnings or alter the asset’s staking position.

Is Zharta a DeFi company?

Yes. Zharta allows for non-custodial loans on top of decentralized smart contracts to take advantage of the strength, transparency, and security of the blockchain networks where your assets are located.

How does Zharta do appraisals?

In a nutshell, Zharta's Appraisal Model utilizes Floor Prices and Trait Boosts to appraise NFTs. This means that more common NFTs will be valued at their collection's Floor Price, while rarer NFTs will be valued using a multiplier of their collection's Floor Price.

Trait Boosts are only available for some collections.

Check out the Loan Conditions section of the app for more information about current Floor Prices and which collections are eligible for Trait Boosts.

Click here to learn more about how our appraisal model works.

How is the liquidation process handled?

Liquidations only happen when a borrower fails to repay their loan on time. Once their loan term is over, they'll still get a 48-hour Grace Period during which they'll have a chance to repay their loan plus a penalty fee to get their NFTs back.

Should the borrower still fail to repay within this Grace Period, the collateralized NFTs will proceed to a 48-hour Buy Now phase. Lenders from the respective pool will have the opportunity to purchase these NFTs at a discount on a first-come, first-served basis.

If no buyers emerge during this period, the NFTs will automatically be sold to a third party at their current market price.

Which collections can be used as collateral at Zharta?

You can check them out here. More collections coming soon!

How do I ask Zharta to list a new collection?

We are always evaluating the market and adding new collections according to our metrics. If you would like to see your favorite collection on our platform, please fill out this form and we will make sure to study it.

How can I get an instant loan against my NFT?

Go to Borrow -> Get a Loan. Once there, start by choosing which currency you want to borrow. The supported NFTs in your Wallet will appear automatically (each currency has different supported collections).

Next, choose the Loan Duration. Each duration tier(7, 30, and 90 days) has different LTVs and APRs. In a nutshell, the larger the duration, the lower the LTVs and APRs, and vice-versa.

Select the NFTs you wish to use as collateral (you can bundle several together for a single loan). Once you’re done picking, you can customize the loan amount.

You can check the Loan Summary and how it changes as you select different combinations. Once you’re happy with the conditions, click Get a Loan.

This begins the approvals phase. You’ll be prompted to approve the relevant NFT collections in your Wallet to give the protocol permission to move your NFTs into Smart Contract escrow and to choose whether you want to activate Delegation.

Finally, you’ll get a chance to review your Loan Conditions one last time before you approve the loan. Once you do, you'll receive the funds!

How can I become a lender?

You can deposit and withdraw funds through the Lending Pools page and the Lending Pool Details page. Just click deposit, choose the amount you wish to deposit, accept the conditions, and approve the transaction in your Wallet. That’s it!

Which wallets can you use to connect to Zharta?

We currently support MetaMask, Coinbase, and Rainbow Wallets. If you prefer to use a different type of wallet, you can use WalletConnect to do so.

On which networks does Zharta operate?

We currently only operate on the Ethereum Network, but we are working on changing that. Stay tuned!

Which cryptocurrencies does Zharta support?

At the moment our lending pools support ETH and USDC.

Is Zharta safe to use?

When building our blockchain protocol, we ensured our smart contracts were 100% secure so there was no possibility of obstruction. Even our programming language, Vyper, was chosen with efficiency, simplicity, and security in mind. Finally, because our users' peace of mind is our top priority, all of Zharta's smart contracts are audited.

Where can I find more information about Zharta?

Website | Discord | Telegram | Twitter | Medium

Does Zharta have Terms and Conditions?

Yes. You can find them here.