“Being an avid user of blockchain products like NFTs we realised that the only way to leverage the value of assets is when we sell. This is a disservice to holders of certain assets that belong to communities that reward members over a certain period of time,” said founder Bankole Olayinka.
“So we came up with the idea of short-term loans for said assets, where holders can get the instant liquidity needed and don’t get to lose their assets as long as they keep to loan terms.”
Upon further research into the idea and possible similar solutions, the team found out that some services already existed that provided that solution, but were restricted to a handful of collections.
“So we developed a risk assessment algorithm that analyses live market data to determine eligibility of assets according to risk appetite configuration. This enables us to provide loan facilities to a larger user base of holders since we don’t have to pre-approve and they are judged against performance on the market,” said Olayinka.
Currently, the SPLIQ DEFI algorithm covers most collections on the Solana blockchain, and is able to provide loans to more collections than any other liquidity provider in the space.
“Our algorithm enables us to cover between 700 and 1,000 collections depending on market conditions,” Olayinka said.
The startup has an average loan volume of over US$300,000, and has processed over 3,000 loans with a default rate of 10 per cent.
“We have been able to optimise our algorithm to scale up with the Solana blockchain so it picks up new collections as they are minted and tracks in real time to cater to as many users as possible,” said Olayinka.
“We plan on expanding to the Ethereum blockchain in the nearest future. We currently provide liquidity for our loans which are available everywhere around the world, but we plan on migrating to an open market where we provide risk tiers where users can set up a comfortable risk tier and fund it. So when an asset that fits that risk criteria is analysed, the system matches it, and if the user agrees terms the loan is processed instantly.”
SPLIQ DEFI charges five per cent interest on loans, and has so far made around US$25,000 in revenues.