Searching for Alpha: Nifty Apes and Double Protocol

The NFT market is notorious for its illiquidity, including the NFT lending market. Many have deemed NFTfi, the largest peer-to-peer (P2P) lending marketplace, highly capital-inefficient for lenders and borrowers. The downside of NFTfi is that lenders must actively decide which NFTs to accept as collateral, which can be time-consuming. Our previous research discussed MetaStreet, an NFT credit market that seeks to improve the liquidity of the NFT lending market while abstracting away active participation. Nevertheless, MetaStreet only solves part of the issues concerning NFTfi. The following are two major pain points concerning NFTfi:

Therefore, Nifty Apes seeks to address these two major issues. To solve the first key issue, Nifty Apes requires lenders to deposit capital and make loan offers to available NFTs. While waiting for their offers to be accepted, Nifty Apes supplies the deposited capital to Compound to earn extra yield.