Liquidations
Phase 1 â Raffles for liquidated NFTs
If a liquidated NFT hasn't been repaid during its 12H Grace Period it will then automatically become eligible for the liquidation raffles in which Frakts stakers and Gnomies holders (later PFP & $FRAKT stakers) will be able to participate
How does it work?
Raffle tickets only for Frakts stakers & Gnomies holders (later PFP & $FRAKT stakers)
The amount of Player points you stake defines the amount of daily raffle tickets you refresh everyday
All tickets (used or not) are burned at the end of the day
New raffle tickets are automatically redistributed every day (24h after using them)
The raffle tickets are bonded to NFTs. So, if you use a ticket from 1 NFT, this NFT will be "empty" for the next 24 hours, regardless of which wallet holds it
Participating in the raffles
The upcoming liquidation raffles will be displayed in the Grace List on https://frakt.xyz/liquidations
At the end of the Grace Period, the collateral NFT gets taken from borrower and enters the raffle round which is 10 minutes. During this time our holders can :
submit SOL deposits (equal to repay value : loan value + accrued interest which is on average at around 50% from current floor price)
define thee amount of tickets they want to spend on this raffle.
After the 10 minutes time window ended, the protocol picks 1 winning ticket at random out of all. The user who submitted the winning ticket gets the collateral NFT, the other participants get their SOL back, all tickets are burn (refreshed in 24 as of now)
The raffle mechanism incentivises holders to use our app daily as only active users/holders actively participating in the raffles will be eligible to winning tickets
Phase 2 â Public Dutch Auction integrated with Hadeswap bids
If there was 0 participants in Phase 1, the collateral NFT will enter a Public Dutch Auction (also called a descending price auction) where the price start at liquidation price and then gets lower over time until it hits the best bid, either from a buyer on frakt.xyz/liquidations or from the highest Hadeswap bid for that collection. Note that this phase can potentially create bad dept for peer-to-pool loans or loss of funds for peer-to-peer loans
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