Overview

BAE Protocol enables NFT-backed loans, connecting borrowers and lenders.

• Borrowers can use HyperEVM NFTs as collateral to borrow WHYPE or kHYPE.

• Lenders can provide liquidity to earn yield on their own terms.

How It Works

Both borrowers and lenders can initiate loans on BAE:

• Borrowers create loan requests, which are listed on the Loans Market. Lenders can browse and fulfill these requests to start a loan.

• Lenders can create lending offers for specific NFT collections, listed on the Offers Market. Borrowers can view and accept these offers.

Both parties set their preferred terms when creating requests or offers, and the accepting party must agree to those terms.

Loan Process

• Once a loan is activated, the collateral NFT is held in the platform’s escrow.

• Borrowers must repay the loan, including interest, within the agreed loan term to avoid liquidation.

• Interest rates are set at the start of the loan and paid alongside the principal at repayment.

Loan Outcomes

• Repayment: Upon full repayment, BAE returns the NFT to the borrower and transfers the principal and interest to the lender.

• Liquidation: If the borrower fails to repay by the due date, the loan becomes eligible for liquidation. Lenders must manually confirm liquidation, after which the collateral NFT is transferred to the lender’s balance.