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Liquidations

Phase 1 — 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 :
  1. 1.
    submit SOL deposits (equal to repay value : loan value + accrued interest which is on average at around 50% from current floor price)
  2. 2.
    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 — AMM liquidation

If there was 0 participants in Phase 1, the collateral NFT is being liquidated in Hadeswap pool or Hyperspace instant sell

Phase 3 — Public British Auction

If there is no ability to liquidate the collateral NFT in AMMs (no offers for this collection) then the NFT goes on Public British Auction, where liquidation price gets lower over time (potentially creating bad dept and loss of funds)