NFT lending
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Papr interest rates and the papr trading price are in a constant feedback loop. Interest rates are programmatically updated on chain as a function of papr's trading price on Uniswap (the lower the trading price, the higher the interest to borrowers), and interest rates in turn affect the trading price, as borrowers open and close loans in response to rates.

Loans have a max LTV of 50%. That means that the total debt owed — the principal plus interest — cannot exceed 50% of the collateral NFT's floor value. This is calculated based on the 30-day time-weighted average floor listing, which can change over the life of a loan.

Borrowers are free to borrow any amount up to the Max, but the higher the amount, the less room there is for the loan to accumulate interest before coming due, and less tolerance for the value of the collateral NFT falling. If loan crosses the liquidation threshold, a collateral item may be triggered for auction. Liquidation auctions are structured as exponential-decay Dutch auctions, which start at 3x the floor value of the NFT and decrease 70% per day, selling to the first willing buyer. The proceeds are credited to the Borrower, which may lower the loan's LTV to an acceptable level.