Pricing of NFT Loans

The most widely accepted way to look at NFT value is the floor price, which is the price that you could sell your NFT without much difficulty. Price discovery of NFTs takes time and customized solutions, so it should not be the goal of a permission mechanism unless there are enough NFT market makers, and each market maker is well aware of each NFT's intrinsic value. Therefore, in our view, a generalized price benchmark would be more appropriate for use as the anchor "value" for NFT loan pricing.
That said, using the spot floor price might allow hackers to attack the system as they could pump up a given project's floor price short-term and take NFT loans out from our protocol based on an inflated price. To avoid hackers gaming the system, we would advocate a time-weighted 30-day moving-average floor price to be the benchmark for the NFT loan pricing and thus smoothen out any outlier transactions from floor prices. For example, without this approach, if the floor price of NFT Project A increased 100% in a week to 100 ETH, using 100 ETH as the benchmark for the LTV ratio, the protocol would give out a loan of 60 ETH (compared to the NFT value of 50 ETH one month ago). On the other hand, if using a time-weighted moving average, the anchor price for LTV would be closer to the 50 ETH fair value before the short-term pump.
We partner with a third-party oracle company to apply a decentralized price feed to determine the floor price and time-weighted 30-day moving-average floor price for different NFT projects.