NFT Collateral Loan Origination Tool

WHAT IT DOES

This tool enables NFT holders to originate loans using their NFTs as collateral. NFT-backed loans allow users to borrow funds against the value of their NFTs without selling them. The NFT is locked in the lending contract as collateral and is returned when the loan is repaid. It connects to your wallet and reads the lending contract address, NFT contract address, token ID, loan amount, interest rate, loan duration, collateral value, loan status, loan history, and timestamps. The tool signs and submits transactions to originate NFT-backed loans, deposit collateral, set loan terms, record loan metadata, and emit loan events.

HOW TO USE

1. Connect your wallet using the wallet bridge (supports MetaMask, WalletConnect, and other EVM-compatible wallets).

2. Select the target network that matches your lending contract deployment.

3. Enter the lending contract address, NFT contract address, and token ID, then click "load contract" to initialize the connection.

4. Click "fetch loan status" to retrieve the collateral value, loan status, and loan history.

5. Review the collateral value — this is the estimated value of your NFT as determined by the contract.

6. Enter the loan amount you wish to borrow, the interest rate (APR), and the loan duration (in seconds).

7. Click "validate loan" to verify that the loan parameters are valid and you don't have an active loan.

8. Click "check loan history" to view your past loans.

9. Review the loan amount, interest rate, duration, and collateral value before executing.

10. Click "originate loan" to sign and submit the transaction that creates the NFT-backed loan.

TECHNICAL MECHANISM

The tool uses ethers.js v5.7.2 to interact with any EVM-compatible lending contract that implements a standard interface (getCollateralValue(address, uint256) view returns (uint256), getLoanStatus(address) view returns (uint8), originateLoan(address, uint256, uint256, uint256, uint256) external, getLoanHistory(address) view). The originateLoan function accepts the NFT contract address, token ID, loan amount, interest rate, and loan duration. The contract validates that the caller owns the NFT, transfers it to the contract as collateral, and disburses the loan amount to the borrower. The contract calculates interest accrual over time and tracks the loan status (none, active, repaid, liquidated). The getCollateralValue view returns the estimated value of the NFT based on the contract's valuation mechanism (e.g., floor price, oracle). The contract maintains a history of loans, storing timestamps and amounts for audit purposes. Transaction handling follows EIP-1559 gas price calculations using receipt.effectiveGasPrice for accurate cost reporting. Loan metadata is recorded both in the contract's history and locally for the user's reference.

WHAT IT CANNOT SEE

This tool operates purely on-chain and cannot verify off-chain NFT valuation — it does not check whether the collateral value is accurate or based on reliable data sources. It cannot validate collateral quality — the tool cannot confirm that the NFT is authentic, has no restrictions, or is not subject to claims. It cannot detect price manipulation — the tool cannot identify attempts to manipulate the NFT's perceived value. It cannot ensure loan repayment — the tool does not guarantee that the borrower will repay the loan. The tool also cannot guarantee collateral liquidation — if the loan defaults, liquidation may not occur or may result in losses.

PLEASE NOTE

This tool works exclusively with EVM-compatible blockchain networks (Ethereum, Polygon, Arbitrum, Optimism, Base, etc.). It requires the lending contract to implement the interface described above. All transactions incur gas fees paid by the connected wallet. The tool maintains no persistent storage — all state is refreshed from the blockchain on each session. Originating an NFT-backed loan is a significant financial decision — ensure you understand the loan terms, interest rate, and the risk of losing your NFT if you default. Consider the collateral value and loan-to-value ratio when determining the loan amount. Always verify the loan parameters before executing. If you default, your NFT may be liquidated and sold to repay the loan.